Supporting San Francisco’s Small Businesses

Small businesses are the lifeblood of San Francisco’s neighborhoods and a major contributor to our economic livelihood. Mayor Breed delivered change to make it easier and less costly to open and operate a small business in San Francisco. She focused in three main areas: cutting red tape, making government services for permitting more efficient, and investing direct support in small businesses to help them thrive.

When Mayor Breed first came into office, it could take between nine months and a year (and in some cases even more) to get City permits to open a small business in San Francisco. Thanks to reforms she made at the ballot and in City Hall, many of these permits are now delivered over the counter on the same day, or only in a matter of weeks. She has also cut red tape and burdensome rules that limited business owners from being able to be flexible to try new things to make their businesses successful to allow businesses to adapt without having to go through costly processes.

To make government more efficient, responsive, and customer friendly, the City opened the Permit Center in 2021, which offers 23 distinct service areas through the Planning Department, Department of Building Inspection, Department of Public Health, Department of Public Works, among others. By centralizing services in one place, customers can move between permitting departments efficiently, resulting in a better experience and improved government function. Since the start of this year, the Permit Center has served an average of 191 customers per day and provides on average 531 services daily.

Mayor Breed also led by reforming taxes for small businesses and providing direct support of over $115 million through more than 6,800 grants and loan awards to local small businesses since the pandemic. Tax reforms including cutting taxes by increasing the small business exemption so thousands more more businesses qualify for this benefit. Direct support for small businesses and filling vacancies Downtown include a range of new programs as part of Mayor Breed’s larger economic revitalization efforts that will help entrepreneurs launch new businesses and support existing business, while expanding on initiatives to fill storefronts.

Cutting Bureaucracy

Mayor Breed undertook permitting reform for small businesses immediately upon entering office. Her first attempt to pass legislation at the Board of Supervisors was watered down to the point of ineffectiveness. Instead of taking that defeat, Mayor Breed put together an even stronger measure then went straight to the voters to pass Prop H, which was the City’s most ambitious change to small business approvals in years. She followed this with two more major legislative efforts in City Hall, both passing to extend these landmark policies more broadly across the city.

• Prop H / Save Our Small Businesses Ballot Measure (Nov 2020): Authored by Mayor Breed and approved by voters in the November 2020 election, Prop H made many improvements to the small business permitting process. The initiative shifts the approval action for most small businesses to an over-the-counter administrative approval, streamlined the review and approval processes for more complex projects to within 30-days, eliminated neighborhood notification for most storefront land use changes and provided existing businesses with greater flexibility to adapt their operations. As of January 1, 2024, over 3,500 businesses have benefited from the program, which was implemented in January 2021.
• Small Business Recovery Act (April 2021): Mayor Breed authored the Small Business Recovery Act to build on Prop H and further reduce bureaucracy in the business permitting process, increase flexibility for small businesses, and support arts and culture in San Francisco. The Small Business Recovery Act expanded the measures included in Proposition H, including a 30-day turn around for City departments to sign off on an application, to apply to businesses citywide. Most notably, this expansion applied to businesses in Union Square, downtown, and SoMa, all of which were deeply impacted by COVID-19. The legislation made several other Planning Code changes to simplify processes for businesses throughout San Francisco, saving businesses time and money.
• 100 Small Business Planning Reforms Legislation (Dec 2023): In December 2023, the Board of Supervisors approved Mayor Breed’s small business reforms that moved forward 100 changes to Planning Code to improve the small business permitting process and will result in filling commercial vacancies faster.

In short, the core components of the legislation will ease restrictions across five main categories:

• Allow more business uses on the ground floor
• Lift restrictions on bars and restaurants
• Incorporate new liquor license for music venues
• Remove certain public notice requirements
• Enable priority processing for nighttime entertainment, bars, and restaurants

A New Centralized Permit Center

The City opened the Permit Center in 2021, which offers 23 distinct service areas through the Planning Department, Department of Building Inspection, Department of Public Health, Department of Public Works, among others. By centralizing services in one place, customers can move between permitting departments efficiently, resulting in a better experience and improved government function.

Since the start of 2024, the Permit Center has served an average of 191 customers per day and provides on average 531 services daily.

Tax Reform

In 2023, Mayor Breed launched a collaborative, comprehensive effort to reform the City’s business taxes. This broader reform included a major win for small businesses, while also focusing on a range of business areas, including attracting and retaining large business and supporting the hospitality industry.

In November 2024, the voters approved Prop M, a comprehensive tax reform measure that exempts more than 2,500 small businesses from the city’s business tax by expanding the Small Business Exemption to $5 million dollars. This key provision will help more small businesses be able to stay in San Francisco and thrive.

Landmark Investments and Support for Small Business

Prior to the pandemic, small businesses needed more support, which is why Mayor Breed began work to reform permitting processes prior to COVID. But the pandemic brought many small businesses into crisis mode to survive, and Mayor Breed responded by creating new opportunities for businesses to earn revenue and defray costs:

Shared Spaces: New Solutions to a New Challenge

Public Parklets began to transform public space since its inception in 2009, but when the pandemic required businesses to cease indoor operations, Mayor Breed quickly moved to expand the program. Due to widespread success throughout San Francisco’s neighborhoods, Mayor Breed announced legislation to transition Shared Spaces from an emergency response into a permanent program through and after the pandemic. Today there are over 500 parklets in San Francisco.

First Year Free Program

Mayor Breed launched “First Year Free” an innovative, new citywide program that waived the following costs to make it easier for small businesses in San Francisco to operate — (1) first-year permit fees, (2) initial license fees, (3) initial business registration fees. The program applies to new ground floor commercial locations, and has $2 million in gross receipts.

• Nearly 9,000 businesses enrolled in FYF in the first three years. In total, the City has waived more than $4.49 million in fees since the program’s inception.

Grants and Loans

Mayor Breed directed over $115 million in investment resulting in nearly 7,000 grants and loans to local small businesses in commercial corridors across San Francisco. These funds have contributed to a wide range of the Mayor’s recovery initiatives that have made it easier to open and run a business in San Francisco. Examples include:

• Storefront Opportunity Grant Program: This program helps San Francisco fill empty storefronts by providing entrepreneurs technical assistance and funding to secure new commercial leases. Small businesses that are eligible can apply to receive up to $25,000 for a first storefront location or up to $50,000 to expand to an additional location. Small businesses in neighborhoods that have experienced slower economic recovery or serve low to moderate income neighborhoods can receive training and assistance on how to secure leases with favorable terms.
• Business Training Grant Program: This program supports an equitable economic recovery by instituting programs and services to advance racial and economic justice. New and existing entrepreneurs who complete 14 hours of training and counseling under a pre-qualified program may be eligible to apply. Providing the training prior to the funding incentivizes businesses to devise ways to remain successful and profitable. The training topics include financial management, marketing, licensing and permitting, human resources, as well as business development. Small businesses that are eligible and apply could receive $5,000 to $50,000 in grants. The City is collaborating with funded nonprofit partners who provide culturally accessible programming. Since the launch of the Business Training Grant in June 2022, $4.7 million have been distributed among approximately 409 small businesses so far citywide. Approximately 90% of the awards went to women and minority-owned businesses.
• SF Shines Design Services and Construction (expansion) Provides design services from a licensed designer or architect worth up to $5,000 to include minor tenant improvements or logo design. Minor construction/equipment grants of up to $5,000. This adds $1 M to the existing program budget for a total of $2.6 M. This program is expected to support about 400 small businesses with this expansion.
• Vandalism Relief Grant
  This grant provides $1,000 or $2,000 grants for small business storefront damages related to vandalism. Examples of damages include broken windows, broken doors, broken locks, etching on windows, graffiti, and more. This program is expected to support about 300 small businesses.
• Low Interest Loans
  Due to rising interest rates this funding buys down interest to benefit our San Francisco small businesses while leveraging private loan capital. Loans provided generally range from $50,000-$100,000. This program is expected to support at least 85 small businesses at an average loan award of $75,000.
• Shared Spaces Equity Grant
  Awards to existing Shared Spaces permit holders for compliance-related expenses. Grants of up to $2,500 to reimburse for the cost of bringing their Shared Spaces into compliance.
• Entrepreneurship Training Grants
  This program provides grants for business expenses after the business owner attends a pre-qualified training. Grant awards will range from $5,000 to $50,000 to pay for startup, expansion and operating costs like: inventory, hiring, equipment, rent, and utilities.
• Shared Spaces Activation Grants
  Family programming and Arts and Culture Activation are essential ingredients for a lively, safe, and inviting public realm for local businesses and neighborhood residents. 2023 activation grants brought San Francisco artists out to Shared Spaces pop up plazas and lots.
• Outdoor Entertainment Permit Fee Waiver
  This program supports ongoing music and entertainment programming in shared spaces and one year of permit renewal for limited live performance permits for retailers, bars and restaurants.

Pandemic Recovery & Investment

During COVID, Mayor Breed provided direct assistance to struggling small businesses to help them navigate challenges around closures, reopening, and direct relief. These included:

• Resiliency Fund: Emergency grants of up to $10,000 for businesses with 5 or fewer employees. Funded by donations to the Give2SF COVID-19 Response and Recovery Fund.
• Neighborhood Mini Grants: Provided financial support of $1,000-$10,000 to family-run businesses, owner-operated businesses, entrepreneurs of color, women-owned businesses, and other enterprises in historically underserved communities who may not have qualified for other government aid programs.
• Women’s Entrepreneurship Mini Grants: Mini-grants of up to $5,000 to San Francisco women-owned small businesses for projects and upgrades that will have a transformative impact on the business’ ability to grow.
• SF Shines for Reopening: The program provides grants, design services, and project management for property improvements. The goal of the program is to help small businesses thrive and create vibrant and safe neighborhood commercial corridors.
• SF Relief Fund: Mayor Breed created the Small Business Relief Fund ($10.6M), which provides grants of $5,000, $10,000, or $25,000 to businesses that are “anchor” small business that uniquely contribute to the cultural and vibrancy of a neighborhood, or businesses that have been in business in San Francisco for many years.
• Venue Fund: This fund supports small, independent music and entertainment venues. Mayor Breed allocated $3M to the Venue fund, which supported 74 venues with costs like rent, mortgage payments, payroll, insurance and utility costs.
• Shared Spaces. During the COVID-19 shelter-in-place order, San Francisco made it faster and cheaper to open parklets for commercial use to allow businesses to serve more individuals while indoor dining was limited by the health order. Fees for Shared Spaces permits have been waived through June 2022, and you allocated $2.3M to help businesses build Shared Spaces parklets.. $12 M partnership with the State to leverage City dollars to provide zero percent interest loans to small businesses. These loans provide up to $100K to new and existing businesses. Applications still open for this.
• African American Revolving Loan Fund — Launched to address the perilous position of many Black-owned and Black-serving San Francisco businesses resulting from the disproportionate impacts of the pandemic. The loan program served Black-owned and Black-serving businesses, especially those most impacted by COVID-19, including hair salons, barbershops, restaurants, gyms, performing artists, and other personal services.