Information for Businesses in response to Shelter in Place Order
March 17, 2020

In order to slow the spread of COVID-19 to the maximum extent possible, the Santa Clara County’s Public Health Officer, along with the Health Officers of the five adjacent counties and the City of Berkeley, issued a  shelter in place order . The order began March 17th and is expected to last through April 7 th .

It is important to know that some businesses and employee functions (refer to Page 5 Item f) can remain operational during this order.

We understand the County’s order to shelter in place for all of Santa Clara County and the impact of the COVID-19 is being felt by businesses and their employees within Morgan Hill. We are reaching out to provide information on resources which available for your business and employees. In response to the COVID-19 pandemic, both the Federal and State government’s have issued disaster declarations paving the way for Federal and State assistance.

Below you will find information on loan programs, tax assistance along with information for employees impacted by either the virus or the order to shelter in place.
For Businesses
Note that this situation remains fluid and information about programs is still evolving.  These are the known resources available to businesses currently. The information will start with the different loan programs that are available to Morgan Hill businesses along with SBA funding that has recently become available due to Federal and State disaster declarations.
Business Loan Programs:  
  • Grow Morgan Hill Fund: A small business loan program specific to business located in Morgan Hill.
  • California IBank: Program provides loan guarantees in support of small businesses. Small Business Finance Center
  • California Treasurers Office: The California Capital Access Program (CalCAP) is a loan loss reserve program supporting small business lending. 
  • Federal Disaster Loans for Businesses, Private Nonprofits, Homeowners, and Renters (Federal Declaration)-Injury SBA Loan

Information on SBA Economic Injury Loans

What is an SBA-approved Economic Injury Disaster Loan?
If your business or not-for-profit has suffered substantial economic injury in a declared disaster area, you may be eligible to apply for an SBA Economic Injury Disaster Loan . These loans generally offer up to $2 million in assistance to businesses experiencing temporary loss of revenue. The key terms of these loans are:
  • A 3.75% interest rate for small businesses without credit available elsewhere. (Businesses able to get credit elsewhere are not eligible.)
  • A 2.75% interest rate for nonprofits.
  • A maximum 30-year term, determined on a case-by-case basis, based upon each borrower’s ability to repay.

How does a business apply for an Economic Injury Disaster Loan?
A business should be able to apply to the SBA either online or by mail. The applicant must provide substantial financial detail to analyze the applicant’s creditworthiness. You can use the services of a CPA or a technical expert, but the SBA will not pay for these services.

Free advice can be sourced from local Technical Assistance providers.
Partners available to help prepare loan paperwork include:
  • Small Business Development Center SBDCMorgan Hill’s SBDC rep is Senior Business Advisor Allie Lopez- or 408.579.9943
  • Service Corp of Retired Executives SCORE
  • Minority Business Development Agency MBDA

What is the maximum loan amount limit?
Disaster loans generally max out at $2 million, but if a business is a major source of employment the SBA has the authority to waive that limit.

What can the loan be used for?
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The loans are not approved to refinance the long-term debts of a business.

What credit requirements does the SBA use to determine the application?
The SBA typically use the following criteria when considering an application:
  • An acceptable credit history
  • An ability to repay
  • Collateral is required for all loans over $25,000

Does the SBA take into account any insurance policy that may be applicable?
Yes. If a business has business interruption insurance, or other relevant claims, then the SBA may reduce the amount of the loan.

What evidence demonstrates economic injury?
Examples can include:
  • Financial statements from the bank and cash flow statements demonstrating the impact on the business prior to and since the onset of the disaster.
  • Written evidence of cancelled orders that have a material impact on the cash flow or profitability of the business since the onset of the disaster.
  • Proof of layoffs or reduced hours for staff as a consequence of a decline in income or cancelled orders. 

How long does it take for an Economic Injury Disaster Loan to be approved?
The SBA’s goal is to arrive at a decision on applications within 2-3 weeks. 

The Governor of California issued an executive order that outlines other programs to assist businesses and employees.
Payroll (State of California)
Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return. For questions, employers may call the EDD Taxpayer Assistance Center toll-free from the U.S. or Canada: 1-888-745-3886.

Sales Tax (State of California)
California Department of Tax and Fee Administration (CDTFA) has the authority to assist individuals and businesses impacted by complying with a state or local public health official's imposition or recommendation of social distancing measures related to COVID-19. This assistance includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund.
For more information please contact CDTFA

City of Morgan Hill |