Small local businesses and nonprofits affected by COVID-19 can now apply for forgivable loans from the City

UPDATE: City Council approved on Tuesday June 30 an additional $5 million in CARES funding for the forgivable loan program bringing the total to $15 million.

The City of Sacramento is now accepting applications for its Small Business Recovery program to financially assist local businesses and nonprofits that have been impacted by the COVID-19 pandemic.

The program will provide up to $25,000 in forgivable loans to businesses and nonprofits located in the city of Sacramento to assist with financial needs and in the retention of employees.

“These forgivable loans are a crucial step towards helping out small businesses recover from the COVID-19 crisis,” said Mayor Darrell Steinberg. “We have carefully crafted the program using an equity lens so that the bulk of the resources will go to businesses in neighborhoods that need help the most.”

The Small Business Recovery Program is funded by $10 million of the $89 million the City received from the federal stimulus bill, known as the CARES Act.

“These forgivable loans will provide assistance to local small businesses and nonprofits affected by the COVID-19 pandemic to cover day-to-day expenses and to retain employees,” said Assistant City Manager Michael Jasso. “Our focus for this program is to help those most in need by dedicating a minimum of 75 percent of the funds to economically disadvantaged communities and at least 25 percent to micro businesses with 5 or fewer full-time employees.”

The application period will be from 9 a.m. Monday, June 29 through 5 p.m. Monday, July 13. Once the application window closes, applications will be screened using specific criteria followed by a lottery/random draw. Funding is expected to be disbursed to selected businesses in mid-August.

Loans will be forgivable after one year if the business submits a business plan within 6 months of receiving the loan and meets two of three of the following criteria: remains open, completes ten hours of technical training and retains 75 percent of the jobs it had in March 2020.

Awarded businesses that do not meet the forgivable loan requirements will be required to repay the loan with 0% interest and will pay $100 a month for every $5,000 borrowed.

Find more program details including eligibility and approval process here.

Applications will be accepted online at

Businesses interested in learning more about the loan program are encouraged to call the Small Business Hotline at (916) 808-7196 or