Provided By Senator Bill Emmerson
There are many challenges to starting and running a successful small business. According to the Small Business Administration, nationwide only about half of all new small businesses survive five years or more and about one-third survive 10 years or more. Many small business owners find themselves needing help in the first few years of their business – whether it’s to obtain financial assistance or start the business in the first place.
This briefing report is intended to spread the word about many of the programs and services offered in California, so that current small business owners, and those interested in starting a business, are able to compete, succeed, and “be a part of” the small business culture in California.
What’s Out There?
For potential and current small business owners, there are a variety of programs available from the state and federal governments. The table below lists whether the programs are available to potential or current small business owners. A description of each program available is detailed below.
Available to Potential Small Business Owner?
Available to Current Small Business Owner
|California Small Business Certification Program||
|California Small Business Loan Guarantee Program||
|California Small Business Development Center Program||
|California State Trade and Export Promotion (California STEP) Project||
What are these Programs?
California’s Small Business Certification Program
The Small Business Certification Program was established to increase business opportunities for the California small business community. The program is administered by the Department of General Services’ Office of Small Business and Disabled Veterans Business Enterprise Services.
To be eligible for certification, a small business must meet the following criteria:
- Must be independently owned and operated;
- Cannot be the dominant business in its field of operation;
- Must have its principal office located in California, and its owners or officers must live in the state; and
- Together with its affiliates, it must either be a business with 100 or fewer employees and gross receipts of $12 million or less over the previous three years, or a manufacturer with 100 or fewer employees.
There are a number of incentives available for businesses participating in the certification program, including, but not limited to, the following:
- State law allows certified small business to receive a 5 percent bidding preference on applicable state solicitations. The effect of the preference is to help small businesses be more competitive in the bid process.
- Certified small businesses are eligible for the state’s Small Business Participation Program. The program sets a goal for the use of small businesses in at least 25 percent of the state’s overall annual contract dollars.
More information on California’s Small Business Certification Program can be found at:
(See also: “Briefing Report: Certification Opens Doors for Small Businesses,” published on January 15, 2009.)
California’s Small Business Loan Guarantee Program
The California Small Business Loan Guarantee Program (SBLGP) is administered by the Business, Transportation and Housing Agency and is designed to help small businesses owners who are having problems getting a loan through the normal process or do not have a favorable credit history. To be eligible the business must be located in California and be classified as a small business. The loan can be used for any purpose such as hiring new employees, buying new equipment, expanding into a new facility, etc. Loans can be in the amount of up to $500,000. Interest is negotiated between the borrower and the lender, and the loan term may be extended up to 7 years. Small businesses owners that employ 500 people or less may apply for a SBLGP loan by contacting a Financial Development Corporation (FDC). To locate the nearest FDC, or to find out more information on the SBLGP, visit http://www.bth.ca.gov/sblgp.htm.
California’s Small Business Development Center Program
Small Business Development Centers (SBDC) are part of a U.S. Small Business Administration partnership program uniting private enterprise, government, higher education and local nonprofit economic development organizations. In California there are 35 SBDC’s, including six regional centers throughout the state. Centers provide assistance at no cost to anyone interested in expanding or improving an existing business or starting a business for the first time. SBDC business clients work with business advisors to achieve a variety of goals: securing patents for intellectual property, launching upgraded websites, successfully bidding on contracts with federal or state government, financial analysis and restructuring of debt and many other projects. In addition, local and regional centers regularly hold free and /or low-cost seminars on a variety of topics including, but not limited to, starting a small business, growing your business, contracting with the state, and how to become a state certified small business. A complete listing of California’s SBDCs can be found at http://www.asbdc-us.org.
The Governor’s Office of Business and Economic Development’s Permit Assistance Unit helps new business owners identify all of the permits needed to start a new or expand an existing business. The unit schedules pre-application meetings between businesses and the appropriate regulatory agencies to help streamline the permitting process, and acts as a neutral facilitator between state regulator agencies and businesses to resolve permitting issues. Their services are confidential and free. In some cases, a project manager may be assigned to personally guide an applicant through the permit process. Individuals may contact a Permit Assistance specialist by calling (877) 345-4633 or by visiting http://www.business.ca.gov/Programs/Permits.aspx.
In addition, in 1997 the CalGOLD program was established to assist businesses in finding the information they need to comply with environmental and other regulatory and permitting requirements. CalGOLD provides direct Internet links and contact information to state, local, regional, and federal permitting authorities. In addition, a number of current forms and permit applications are available on the site. To use CalGOLD visit www.calgold.ca.gov.
California State Trade and Export Promotion (California STEP) Project
The California STEP project is a three-year pilot trade and export initiative authorized by the federal Small Business Jobs Act of 2010. The STEP Program is designed to help increase the number of small businesses that are exporting and to raise the value of exports for those small businesses that are currently exporting so they can grow and create jobs. Services offered through the program include, but are not limited to, customized product/promotion localization assistance, matchmaking services connecting small businesses to potential customers, and follow up support to assist firms in closing deals.
In order to take advantage of the services provided under the STEP program, businesses must meet the following guidelines:
- Comply with the U.S. Small Business Administration size standards
- Have been in business for not less than the 1-year period ending on the date on which assistance is provided under a STEP grant
- Operating profitably, based on operations in the United States
- Demonstrated understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs brokers, packing and shipping
- Have in effect a strategic plan for exporting
More information on the California STEP project can be found at:
Helpful Websites for Small Businesses
In addition to the programs and services mentioned above, there are a number of other websites that provide helpful information to small business owners, including, but not limited to, the following:
|Business USA||Provides comprehensive information about government grants and programs available to small business owners.|
|California Small Business Assistance Center||Provides a variety of tools to help small businesses understand and plan for their tax responsibilities.|
|SCORE||Provides access to business planning and financial templates, as well as links to relevant business webinars. Offers access to local small business seminars located at offices all over the United States.|
|Small Business Administration||Provides valuable tips, grant information, suggestions and help growing small businesses.|
|California Association of Independent Business, Inc.||Includes information on a range of small businesses’ issues, including information on small business legislation.|
|California Chamber of Commerce|
|California Small Business Association|
|National Federation of Independent Business|
|Small Business California|
Representing half of America’s workforce, small businesses are the backbone of our economy. As such, it is important that we start spreading the word about available programs and services that are in place to help businesses survive and thrive in California. Doing so may encourage entrepreneurship, and prevent long-standing small businesses from leaving the state.
California needs to remain a place where small business owners feel “if I can make it there, I’ll make it anywhere.” Educating the public about these programs, and continuing to make them available to current or future entrepreneurs, will ensure the success of California’s Small Business population.