CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 9, 2026 BUSINESS & LEGISLATIVE
SUBJECT: APPROVE A FUNDING AND SERVICES AGREEMENT WITH
CARAVANSERAI - ALLIANCE FOR ENTREPRENEURS FOR
IMPLEMENTATION OF THE SMALL BUSINESS SUPPORT PROGRAM
("BIZUP: PALM SPRINGS")
FROM: Scott C. Stiles, City Manager
BY: Flinn Fagg, Assistant City Manager
SUMMARY:
This item requests City Council approval of a Funding and Services Agreement (Attachment A) between the City of Palm Springs (“City”) and Caravanserai - Alliance for Entrepreneurs (“Caravanserai”) to implement the Small Business Support Program, operating under the name “BizUp: Palm Springs” (“Program”). The Program will provide business training, one-on-one consulting, and micro-grant capital to early-stage and under-resourced entrepreneurs in Palm Springs. While the program will be open to all small business owners and entrepreneurs in Palm Springs, priority outreach will be given to Section 14 survivors and their descendants. The initiative expands access to capital and business support services, advances economic empowerment for marginalized communities, and furthers the City’s Section 14 restorative justice commitments.
Under the proposed Agreement, the City will allocate $1,000,000 over five (5) years ($200,000 annually, disbursed in quarterly installments of $50,000) to Caravanserai. Of each year’s allocation, 75 percent ($150,000) will fund direct micro-grants to entrepreneurs and 25 percent ($50,000) will fund program delivery, consistent with the terms outlined in Attachment B.
RECOMMENDATION:
1) Approve a Funding and Services Agreement with Caravanserai - Alliance for Entrepreneurs for implementation of the Small Business Support Program ("Bizup:
Palm Springs"); and
2) Authorize the City Manager or their designee to execute all necessary documents.
City Council Staff Report
September 9, 2026 -- Page 2
Funding Agreement with Caravanserai
BUSINESS PRINCIPAL DISCLOSURE:
Caravanserai is a 501(c)(3) nonprofit registered in the state of California; thus, there are no owners. Their public integrity disclosure is included as Attachment D.
BACKGROUND:
In November 2024, the Palm Springs City Council approved a comprehensive framework for restorative justice and housing and economic development initiatives stemming from the Section 14 settlement discussions (Attachment C). This included a direct financial settlement of $5.91 million for verified former Section 14 residents and their descendants; $20 million over ten years for housing programs, including a First-Time Homebuyer Assistance Program and a Community Land Trust; and $1 million over five years for small business support, delivered in partnership with Caravanserai.
The small business commitment builds on a Small Business Entrepreneur Pilot Program that the City launched with Caravanserai in February 2024, prior to the settlement framework. The pilot opened a Caravan Small Business Development Center (“Caravan SBDC”) location at 2150 E. Tahquitz Canyon Way in Palm Springs, providing business training and access-to-capital support to early-stage entrepreneurs from historically underserved communities, including women, LGBTQ individuals, veterans, African American and Spanish-speaking populations, and persons with disabilities.
In April 2024, following community engagement on the City’s Section 14 commitments, the City Council directed staff to review the results of the Caravanserai pilot program and evaluate potential expanded funding. Across the two completed program years (2024 and 2025), Caravanserai served 70 entrepreneurs, funded 35 businesses, created 21 new jobs, and generated $1.18 million in revenue growth, contracts, and investments captured by participants.
The Program proposed in this Agreement applies the same training-and-micro-grant model at full scale over a five-year term, with continued priority outreach to Section 14 survivors and descendants alongside the broader Palm Springs small business community.
STAFF ANALYSIS:
Program Partner
Caravanserai - Alliance for Entrepreneurs is a nonprofit organization that operates Caravan SBDC, a small business development center affiliated with the Orange County Inland Empire SBDC Network. Through the center and its network, Program participants have access to more than 150 business consultants across finance, marketing, sales, operations, and compliance, at no cost to participants or to the City. Caravanserai is independently audited each year and holds a GuideStar Platinum transparency rating, placing it in the top 1 percent of nonprofits nationally.
City Council Staff Report
September 9, 2026 -- Page 3
Funding Agreement with Caravanserai
Program Design
The Program will run two cohorts per year of 20-25 participants each, training 40-50 entrepreneurs annually (200-250 over five years). Every cohort receives ten business group workshops and ten one-on-one coaching sessions, delivered in a hybrid format (in- person and online) and fully bilingual in English and Spanish. The curriculum covers business vision and planning, financial management, customer discovery and competitive analysis, marketing and sales, banking and financial systems, and technology and operations, tailored to the needs of each cohort. After graduation, participants retain access to ongoing Caravan SBDC consulting at no cost, for as many sessions as appropriate.
Selection is competitive and based on the strength of each applicant’s business. Priority outreach will be given to Section 14 survivors and descendants, and the Program remains open to all Palm Springs entrepreneurs.
Micro-Grant Eligibility
Graduates who complete the training program, the required Caravan SBDC coaching sessions, and a business plan qualify for a $3,750 micro-grant. Up to 40 grants will be awarded each year (200 over the life of the Program). Before funds are disbursed, each recipient must provide:
• Government-issued photo identification
• Business formation and registration records (fictitious business name statement, articles of organization or incorporation, EIN confirmation, as applicable) • An active City of Palm Springs business license, along with any other licenses or permits the business requires to be in compliance
• Business bank account verification (voided check, bank verification letter, or recent statement)
• Evidence of active business operations (sales records, contracts, leases, payroll records, or comparable documentation)
• Most recent business tax return, where applicable
Grant funds may be used for business licenses and incorporation, equipment, marketing, rent, inventory, and payroll (with restrictions). Funds may not be used for taxes, bonuses, severance, personal expenses, legal settlements, expenses reimbursed by insurance, or investment purposes, including but not limited to cryptocurrency, stocks, or other speculative financial instruments. Recipients must submit invoices and progress reports on the use of funds.
Outreach Plan
Caravanserai will promote the Program through email newsletters, text message campaigns, in-person information sessions, social media, and its established relationships across the regional small business community, including community organizations, financial institutions, and chambers of commerce. All outreach materials will be bilingual in English and Spanish.
City Council Staff Report
September 9, 2026 -- Page 4
Funding Agreement with Caravanserai
Outreach for each cohort follows a phased timeline that puts the Section 14 community first. The first recruitment period opens with a 90-day priority outreach window spanning the full first program quarter, allowing multiple rounds of information sessions and sustained relationship-building with Section 14 representatives before any citywide promotion begins. Each recruitment period after the first opens with a standard 30-day priority window. During each priority window, all outreach activity is dedicated to Section 14 survivors and descendants. Applications remain open to all Palm Springs entrepreneurs throughout, and selection remains competitive. After each priority window closes, outreach expands citywide. This cycle repeats before each cohort, twice per program year, consistent with the implementation timeline below.
Outreach Phase (each
recruitment period)
Activities
Section 14 priority
outreach: first 90 days of
the first recruitment
period, first 30 days of
each recruitment period
thereafter
All outreach (newsletters, text campaigns, etc.) is
dedicated to Section 14 survivors and descendants.
Community information sessions at trusted neighborhood
locations, including Ajalon Missionary Baptist Church and the James O. Jessie Desert Highland Unity Center, with
Section 14 representatives invited to co-host. Application walkthrough sessions and technical support webinars for Section 14 applicants. In-person application and technical assistance at the Unity Center and the Caravanserai office.
General recruitment:
following each priority
window
Outreach expands citywide through newsletters, text
campaigns, social media, and partner organizations.
Continued application walkthroughs, technical support
webinars, and in-person assistance at accessible
community locations and the Caravanserai office through the close of applications.
Ongoing Continued engagement with Section 14 representatives between cohorts to share program updates, report
outcomes, and gather community feedback. Year-round
outreach partnerships with community organizations and
financial institutions.
Caravanserai will engage Section 14 representatives throughout the Program, inviting them to raise awareness among survivors and descendants, co-host information sessions, and help keep the community informed between recruitment cycles.
Caravanserai staff will walk applicants through the application and required documentation step by step, in person and online, in English and Spanish.
Community Outreach To Date
In advance of this Agreement, City staff and Caravanserai representatives held a two- hour community information session with Section 14 survivors and descendants on July City Council Staff Report
September 9, 2026 -- Page 5
Funding Agreement with Caravanserai
22, 2026. The session provided an overview of the Program and its structure, as well as an overview of Caravanserai and the business training, consulting, and micro-grant services it will provide. This session forms the foundation for the ongoing, priority outreach to the Section 14 community described below.
Implementation Timeline
The Program timeline is organized around program quarters, with Quarter 1 beginning when the first quarterly disbursement is received from the City. In Year 1, the full first quarter is dedicated to Section 14 priority outreach before citywide recruitment begins.
Years 2-5 follow the same four-quarter cycle each year, aligned to the City’s disbursement schedule.
Program Quarter Milestones
Quarter 1 (begins
upon first City
disbursement)
Program launch. Applications open. The full quarter (90 days) is dedicated to Section 14 priority outreach, beginning with Section 14 representatives and community partners.
Quarter 2 Citywide general recruitment opens and closes. Cohort 1 selected and training begins.
Quarter 3 Cohort 1 completes training and micro-grants are awarded to eligible graduates (up to 20). Cohort 2 recruitment begins with a 30-day Section 14 priority outreach window.
Quarter 4 Cohort 2 trains and completes. Micro-grants awarded (up to 20).
Cohort 1 grant reporting and follow-up consulting. Year 1 evaluation and annual report to the City.
Years 2-5 The same four-quarter cycle repeats each program year: two cohorts, up to 40 micro-grants, and annual reporting. Outcome tracking continues for 12 months after each cohort.
Program Structure and Budget
• Funding: $1,000,000 over five (5) years ($200,000 annually), disbursed in quarterly installments of $50,000.
• Micro-Grant Allocation: 75% of annual funding ($150,000) is dedicated directly to entrepreneur micro-grants.
• Program Delivery Allocation: 25% of annual funding ($50,000) covers program administration, training, outreach, and evaluation.
• Roll-Forward Provision: Any micro-grant funds not awarded in a given program year roll forward into the following year’s micro-grant pool; they are never redirected to program operations.
• Caravan SBDC Consulting: One-on-one business consulting is provided at no cost to participants or the City, with an estimated added value of $40,000 per year ($200,000 over five years), bringing total estimated program value to $1,200,000 over five years.
City Council Staff Report
September 9, 2026 -- Page 6
Funding Agreement with Caravanserai
Category Annual 5-Year Total
Micro-grants to entrepreneurs (75%) $150,000 $750,000
Program delivery (25%) $50,000 $250,000
Total City investment $200,000 $1,000,000
Caravan SBDC consulting (no cost to City) $40,000 $200,000 Total program value $240,000 $1,200,000
Anticipated Outcomes, Metrics, and Reporting
Over five years, the Program is anticipated to train 200-250 Palm Springs entrepreneurs across ten cohorts and deploy $750,000 in micro-grant capital through 200 grants of $3,750. Caravanserai will track outcomes from the application stage through 12 months after each cohort, measuring businesses funded, businesses started, jobs created and retained, revenue growth, and additional capital secured, among other metrics.
Caravanserai will provide quarterly financial and program reporting to the City, including metrics and detailed financial receipts. In addition, an annual impact report will be provided to the City Council, detailing expenditures and program results.
ENVIRONMENTAL ASSESSMENT:
Approval of this Agreement is exempt from environmental review under the general rule in California Environmental Quality Act (“CEQA”) Guidelines Section 15061(b)(3). The activity is covered by the general rule which exempts activities that can be seen with certainty to have no possibility of causing a significant effect on the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Economic Development.
FISCAL IMPACT:
The Program will be funded at a total allocation of $1,000,000 over five (5) years ($200,000 annually), consistent with the small business support commitment approved by City Council as part of the Section 14 restorative justice framework on November 14, 2024. The program will be funded out of the Economic Development budget in account 1002100-40105 for fiscal year 2027 and appropriated in future Economic Development budgets. No additional General Fund impact beyond the amounts already contemplated in that framework is anticipated.
City Council Staff Report
September 9, 2026 -- Page 7
Funding Agreement with Caravanserai
REVIEWED BY:
Finance Director: Kristopher J. Mooney
Assistant City Manager: Flinn Fagg
City Manager: Scott Stiles
ATTACHMENTS:
A. Funding and Services Agreement between the City of Palm Springs and Caravanserai - Alliance for Entrepreneurs
B. BizUp: Palm Springs – Program Overview (Caravanserai) C. Palm Springs Section 14 Open Session/Settlement Framework Summary – Small Business Support Program (November 14, 2024)
D. Public Integrity Disclosure