Business Requirements

To be eligible for a California Rebuilding Fund loan, a small business must meet the requirements detailed below. Please note that the pre-application should be completed and submitted by the owner of the business with the largest ownership interest, and that all owners with more than 20% ownership will be required to attest to the information provided.

The following criteria is the minimum required for a business to be considered eligible for a loan under this program:

  • The business must have employed 50 or fewer full-time equivalent (FTE) employees prior to March 2020; please note: any and all affiliates are counted in this total, including businesses with shared ownership;
  • The business must have had gross revenues of less than $2.5 million in 2019;
  • The business must have suffered a direct economic hardship as a result of COVID-19 which has materially impacted operations (as evidenced by at least a significant reduction in revenues since January 2020);
  • The business must have returned to or sustained, for at least one-month, at least 30% of pre-COVID revenues relative to a similar period in 2019;
  • The business must have demonstrated positive net income in 2019 (not including depreciation and amortization expenses);
  • The business must have been in operation since at least June 30, 2019 and be operating at the time of application;
  • The main office or headquarters for the business must be in California. The loan must be used to support only a business’s California operations

The community lender will review each business’s financial condition and underwrite based upon the following general credit criteria and based on financial information provided by guarantor(s) and/or beneficial owners, which may vary based on lender:

  • The guarantor’s ability to pay back the loan in full;
  • The ability to make debt payments from revenues earned (monthly business debt service, including this new loan, to 2019 revenues ratio must be less than 25%);
  • Neither the guarantor nor any of the beneficial owners is involved in an active bankruptcy
  • No 30+ day delinquencies in January or February of 2020;
  • No more than one 60+ day delinquency;
  • No charge offs and no discharged bankruptcies from March 1, 2019 through February 29, 2020;
  • Neither the guarantor(s) nor any of the beneficial ownerships has been the subject of a repossession or foreclosure in the past 36 months;
  • There are no outstanding tax liens or judgments against the guarantor(s) or beneficial owner(s), unless subject to an active payment plan for at least the past six (6) consecutive months; and
  • There is no outstanding unpaid child support owed by the guarantor(s) or beneficial owner(s).

There is no minimum credit score that is required under this program. Each community lender may set its own credit score limits for the loan applications it reviews.

INELIGIBLE BUSINESSES

Businesses that are NOT eligible include, but are not be limited to:

  • Firms engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted
  • Business engaged in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade
  • Facilities primarily used for gambling or to facilitate gambling
  • Businesses or firms engaged primarily in lobbying activities
  • Passive real estate investments