Los Angeles is expanding a financing program designed to help small businesses cover the upfront costs of government contracts before they get paid.
Winning a government contract can be a big deal for a small business.
But there is a catch that can be easy to miss: you may have to spend the money before you get paid.
A contractor might need to cover payroll, buy materials, rent equipment or hire workers to get a project started. The government may not pay until later.
For a small business with limited cash, that wait can make a good contract difficult or even impossible to take on.
That is the problem Los Angeles’ Contract Financing Program is designed to address.
The program is intended to help eligible small businesses get financing for those upfront costs so they can actually perform government contracts.
Now, with Los Angeles preparing for the 2028 Olympic and Paralympic Games and other major events, Mayor Karen Bass’ administration is expanding the program to cover more types of contracts.
But there is an important question behind the expansion:
Will more businesses actually get the financing they need and turn contract opportunities into real work?
First, what this program actually does
Think about it this way.
Say your business wins a $200,000 government contract.
That sounds great.
But before you receive the money for the work, you may have to pay your employees, purchase supplies, rent equipment and cover other costs.
You have the contract.
You have the opportunity.
But you still need the cash to get the job done.
That is where this program comes in.
The City says its Contract Financing Program provides access to competitive loans that can help cover direct contract costs such as materials, equipment and hiring employees. City explanation of how the Contract Financing Program works
It is important to understand what the program does and what it does not do.
It is not simply a program that gives businesses Olympic contracts.
It does not guarantee that a business will win a contract.
Instead, it is meant to help eligible businesses deal with the cash-flow gap between taking on the work and getting paid for it.
That distinction matters.
For a small business owner, the question may not be, “Can I win this contract?”
It may be:
“If I win it, can I afford to do it?”
Los Angeles is heading into a period of major public and private spending tied to sports and entertainment, including the 2028 Olympics and Paralympics.
The City says the expanded program will cover Los Angeles businesses fulfilling contracts with any government entity, as well as contracts tied to upcoming sports and entertainment events in Los Angeles County. Mayor’s Office announcement on the expanded eligibility
That is broader than the program’s original focus on City contracts.
For businesses that are still trying to understand how Olympic-related contracting works, we have already explained how Los Angeles small businesses can prepare for LA28 contracts.
And if you are just getting started with government contracting, our guide to how California small businesses can compete for government contracts California government-contracting guide breaks down where to begin.
The important thing is that contract readiness and contract financing are two different pieces of the puzzle.
You first need to be ready to compete.
Then, if you win qualifying work, you may need enough working capital to perform it.
The City launched the program with $1 million from Banc of California through a public-private partnership.
The program’s first year gives the public a baseline for judging what happens next.
As of September, the City reported 58 inquiries and three applications. The three eligible applications were still pending because the underlying City contracts had not yet been fully executed.
Those numbers do not tell us that the program failed.
They also do not tell us why businesses did or did not move forward.
But they do give us something important: a starting point.
The question now is whether the expanded program can reach more businesses and lead to more financing and completed contracts.
The original program was funded with the $1 million Banc of California contribution.
The City reported that $474,000 remained from that original funding when it sought to expand the program.
The City also authorized a new contract of up to $425,000 with Merriwether & Williams Insurance Services for program services from October 2026 through September 2027, with a possible one-year renewal.
That number needs some context.
The $425,000 is not $425,000 in loans going directly to small businesses.
It is the maximum amount authorized for program services.
That means there are really two money questions worth watching:
How much does it cost to operate the program?
And:
How much financing actually reaches businesses?
Both numbers matter if the public is going to understand whether the program is doing what it was created to do.
What small businesses should understand
If you are a Los Angeles business owner, the simplest way to think about this program is:
It is for the cash you may need after you have a qualifying contract opportunity — not a shortcut to getting the contract itself.
You still have to compete.
You still have to meet the buyer’s requirements.
And you still have to do the work.
The financing is meant to help with the part that can be especially hard for a smaller company: paying the bills before the contract payment arrives.
That may sound like a small detail.
For a business operating on a tight cash cushion, it can be the difference between saying yes to a contract and having to walk away.
Los Angeles now has a chance to see whether expanding the program changes the results.
Parriva will be watching more than attendance at procurement events or announcements about future opportunities.
We’ll be watching:
- How many businesses apply?
- How many qualify?
- How many receive financing?
- How much financing is provided?
- How many contracts are connected to that financing?
- How much contract work do those businesses complete?
- How much of the program’s funding is spent on administration?
Those numbers will tell us much more than a headline about economic opportunity.
Because the promise behind the program is pretty simple:
A small business should not have to turn down a government contract because it cannot afford the upfront cost of doing the work.
Los Angeles is expanding the program to give more businesses a chance to overcome that problem.
Now the results will show how many businesses actually get across that gap.
