L.A. City Microenterprise Recovery Grant Program

L.A. City Microenterprise Recovery Grant Program

December 2023




The Microenterprise Recovery Grant will provide grants of up to $5,000 to eligible microenterprises located in the City of Los Angeles that need financial assistance to aid in their recovery from the COVID-19 pandemic. The grant is funded by Community Development Block Grant CARES Act (CDBG-CV) funding allocated to the City to prevent, prepare for, and respond to COVID-19.

Grants of up to $5,000 will be awarded to eligible businesses, prioritizing businesses that have yet to receive assistance through any City, State or Federal program. Funds can be used for operating expenses, including but not limited to payroll, lease payments, insurance, and inventory.

Applicants must submit complete applications before the deadline and provide documentation confirming that they meet the eligibility requirements, terms, and conditions. Applicants must explain how the grant funds will be used toward necessary COVID-19 recovery business expenses and make available documentation demonstrating that the grant funds were used toward those expenses.


Funding Priority


Grant recipients will be selected based on the availability of funds, program guidelines, submission of all required information, and supporting documentation. If requests exceed the available funding, precedence will be given during the grant allocation process to qualified applicants who meet the following criteria:

  • The business has not received any other financial assistance from federal, state, or local sources
  • The business is located in a CDBG census tract
  • Businesses with W-2 employees
  • Businesses located in commercial "brick and mortar" locations
  • The family income for the business owner is below 80% AMI prior to COVID-19, based on the previous year's tax returns
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Grant Eligibility


To be eligible to apply for the Microenterprise Grant Program, a business must demonstrate the need for financial support due to the impact of the COVID-19 pandemic.


  • Eligible Businesses
    Eligible Businesses

    • The business must be a for-profit business located within Los Angeles city limits. Home-based businesses are eligible if the owner is a Los Angeles resident; however, priority will be given to businesses operating from commercial locations.

    • Annual revenue cannot exceed $1 million.

    • The business must have an active Business Tax Registration Certificate (BTRC) with the City of Los Angeles that is current and in good standing.

    • The business has been legally operating in the City of Los Angeles on or before March 1, 2020.

    • The business must have five (5) or fewer W2 employees on their payroll, including the owner(s).

    • The business must demonstrate that the grant funds will be used for recovery from the COVID-19 pandemic.

    • The business must disclose whether they have received funding from other federal, state, or local sources (including PPP and EIDL). Applicants who have received funding are still eligible, provided the funds are not currently being spent on the same expenses covered by the Microenterprise Grant.

    • Applicant has not previously applied for this grant program, or been awarded a grant through this program.

    • If applicable, the business must be in good standing with the Secretary of State.

    • Grant funds must help create or retain at least one job held by or made available to low and moderate-income persons, as defined by HUD. The current income limits are provided in the table below.

      Low to Moderate Income (80% AMI) by Family Size
      1-person 2-person 3-person 4-person 5-person 6-person 7-person 8-person
      $70,650 $80,750 $90,850 $100,900 $109,000 $117,050 $125,150 $133,200
  • Ineligible Businesses
    Ineligible Businesses
    If you are not sure if your business is eligible or ineligible, please contact a local BusinessSource Representative for assistance. Examples of ineligible business include, but are not limited to:

    • Business/Owner that has previously applied for this grant program, or has previously received a grant award from this program
    • Nonprofit organizations
    • Businesses that were not in operation and were not located in the City of Los Angeles on or prior to March 1, 2020
    • Rideshare businesses
    • Landlords/Schedule E Passive Income
    • Businesses or companies held in trust
    • Businesses that do not have a physical location using P.O. Boxes as a business address
    • Businesses engaged in illegal activities, such as selling drug paraphernalia or operating a motel that permits illegal prostitution
    • Cannabis businesses or businesses that support cannabis businesses
    • Corporate-owned franchises (a corporation is responsible for operations, profit and loss, business decisions and quality control; corporate hires and oversees all store staff)
    • Publicly traded companies
    • Private social clubs that limit the number of memberships for reasons other than capacity
    • Payday loan stores, pawnshops and other firms involved in lending activities, such as banks, finance companies and any other firm whose stock in trade is money
    • Insurance companies, such as life, auto, home, bail bonds and other similar entities
    • Astrology, palm reading, tarot, etc.
    • Liquor stores and smoke shops
    • Night clubs
    • Adult bookstores
    • Businesses and Sole proprietors that provide massage services
    • Businesses that present live performances of a prurient sexual nature and/or derive revenue through the sale of products or services of a prurient sexual nature
    • Gambling businesses (i.e., track waging facilities, casinos, bingo parlors)
    • Trailer-storage yards and junkyards
    • Gun or ammunition stores
    • Multi-sales distribution
    • Firms involved in speculative activities (i.e., day trading, stock market exchange facilitators)
    • Dealers of rare coins and stamps
    • Lobbying firms or businesses that dedicate 50% or more of their time or resources to lobbying activities
    • Churches or other religious organizations
    • Government offices or agencies
    • Real Estate Agent
  • Funding
    Approved Funding Usage

    The grant may be used for working capital. Eligible expenses include, but are not limited to:
    • Payroll
    • Rent or lease payments
    • Utilities
    • Insurance
    • Payment of outstanding business expenses
    • Adaptive business practices needed in response to the pandemic
    • Technology and digital commerce expenses
    • Marketing/communication, or other similar expenses

    Ineligible Expenses
    The following is a list of business expenses that the Grant does not cover. This is not an exhaustive list. If an applicant is not sure if the intended use of funds is eligible, the applicant must contact a local BusinessSource Center representative for assistance.
    • Taxes (business, personal income, property, etc.)
    • Construction and tenant improvements
    • Credit Card Debt
    • Personal use of any kind

  • Documentation
    Documentation Requirements


    Eligibility
    BusinessSource Center staff will provide technical assistance to applicants selected for funding to collect all required documentation. The documentation will be used to verify the businesses meet program eligibility requirements, terms and conditions as provided in these guidelines.

    Complete applications must include:
    • 2019 and 2020 tax returns
    • Payroll tax form to verify microenterprise status
    • Copy of government-issued identification such as Driver's License or passport
    • 3-months of latest bank statements
    Additional documents may be requested if necessary to verify the business meets program eligibility requirements, terms and conditions, such as but not limited to pandemic financial impact documents, 4506 form, legal structure documents, etc.

    Funding
    Upon grant approval and prior to funds disbursement, successful applicants will be required to submit funding documents, including:
    • Executed Grant Agreement
    • Budget specifying the use of grant funds
    • Completed and signed W-9 form
    • Bank Information
    • Job retention forms

    Compliance
    Grant recipients will be required to submit the following documents to verify compliance with program requirements:
    • Job creation forms
    • Compliance certification
    Grant recipients will also be required to maintain grant funds expenditure records for five (5) years, which must be made available to the City or HUD upon request.

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Application & Program Administration


Step 1: Apply

The second round application period for this grant closed on December 10, 2023.


Applicants must self-certify that all funds will be used for expenses permitted under this program and that there is no duplication of benefits. Additional documentation will be required for the selected qualified applicants. Applications will be open for three weeks and prioritized until funds expire. A third round of applications may be launched if an insufficient number of applications is received by December 10, 2023.


Step 2: Application Review

City of Los Angeles staff will review and prioritize the applications. If the number of qualifying applications received exceeds the amount of grant monies available, staff will use a randomized-selection system to select and rank the applications using funding priorities listed above.


Step 3: Contact Selected Applicants

Selected applicants will be referred to their local BusinessSource Center to collect and upload the required documentation. The applicant will be given two weeks to provide the requested documentation. If documents are not received by the end of the two-week period, the applicant will be disqualified and their application will be withdrawn.


Step 4: Administrative Approval

EWDD will review all completed applications with required documentation and notify the applicant of the result of their application.


Step 5: Grant Agreement

Successful applicants must sign a Program agreement acknowledging the terms and conditions of their participation before funds are disbursed.


Step 6: Funding

Prior to fund disbursements, successful applicants must also provide a completed and signed W-9 and bank account information where funds will be deposited.


Step 7: Compliance Follow-Up

Grant recipients will be required to provide information to the City on how the grant money was spent and its impact on their businesses.



Technical Assistance


If your business requires assistance, contact your local BusinessSource Center for support with the application process, eligibility, and submission. BusinessSource Centers have qualified business counselors available to provide guidance and assist with the review of eligibility documents and the application. You may also email This email address is being protected from spambots. You need JavaScript enabled to view it. with any additional questions.
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