Issue Brief: Assessing the California Rebuilding Fund

Report #268, June 2022


The California Rebuilding Fund has issued almost 1,200 loans in 39 California counties to help small businesses recover and grow from the COVID-19 pandemic, yet implementation challenges remain for this innovative program, the Little Hoover Commission explains in its new Issue Brief.

In the Brief, its resource for state policymakers that outlines current research without making policy recommendations, the Commission assesses the progress of the California Rebuilding Fund, a public-private partnership that provides loans to small businesses in underserved communities.

The Brief also presents findings from the Commission’s public hearing on the Fund held in March 2022, a follow-up to recommendations made by the Commission in its December 2020 report, First Steps toward Recovery: Saving Small Businesses. In that report, the Commission urged officials to further expand the Rebuilding Fund if initial results from the program were promising.

“Small businesses throughout California were devastated by the pandemic, and the California Rebuilding Fund is a crucial solution to helping these businesses – the cornerstones of our communities – recover and thrive,” said Commission Chair Pedro Nava.

The Commission found that while loans have occurred in 39 of California’s 58 counties, Bay Area counties, and especially San Francisco, have received a disproportionate share of the loans. This reflects, among other causes, specific local actions by San Francisco and Santa Clara County to invest in the Fund.

In the Issue Brief, the Commission also outlines other metrics about the Fund’s accomplishments:

  • Over 85 percent of loans have gone to businesses with ten or fewer employees.
  • More than 65 percent of loans have gone to businesses owned by women or people of color.
  • Nearly half of loans have gone to businesses located in low-to-moderate income communities.

Still, the Rebuilding Fund has faced numerous challenges since its launch in 2020:

  • California’s promotion of its small business grants programs has largely overshadowed the Rebuilding Fund’s outreach efforts.
  • Raising capital for the Fund has been slower than expected due to the unique structure of the program as well as hesitancy from state and private lenders to invest.
  • Leveraging local funding is an important factor in determining how the program’s funds are distributed, yet only San Francisco and Santa Clara counties have partnered with the Rebuilding Fund to better support businesses in their communities.

“We hope this Issue Brief serves as a valuable resource to state leaders as they consider establishing long-term structural supports for the underrepresented small businesses throughout California,” said Vice Chair Sean Varner.


First Steps toward Recovery: Saving Small Businesses
(Report #257, February 2021)



  • Implementation Review Hearing on the California Rebuilding Fund and Business Meeting
    Event: March 24, 2022
    Agenda / Testimony / Video