On Monday, California Governor Gavin Newsom announced a new set of measures designed to aid small businesses impacted by COVID-19 and its related restrictions. These measures will tackle the ongoing challenges posed by the pandemic through three fronts: grants, additional funding for the California Rebuilding Fund, and tax relief. Thanks to the leadership for their aid to small businesses.
COVID Relief Grants
In partnership with the Legislature, the California Office of the Small Business Advocate (CalOSBA) will administer a new $500 million COVID Relief Grant for small businesses that have suffered the impacts of COVID and the health and safety restrictions. A network of CDFIs will distribute the grants of up to $25,000. The goal is to reach underserved micro and small businesses by early 2021. CAMEO and our partners have been advocating for grants for small businesses for months. We are very appreciative of the Governor and the Legislature for understanding the need for grants.
California Rebuilding Fund
Earlier this month, the California Rebuilding Fund launched as a public-private partnership to make available $25 million in low-interest loans to help impacted small businesses rebuild and thrive. This week’s new measures will provide an increase of $12.5 million in funding. The move will capitalize the Fund in full. It will also make even more loans available to small businesses with less access to loans from traditional banking institutions.
Governor Newsom will expand the Executive Order that he signed last April. The order allowed taxpayers to apply for penalty and interest relief for 90 days for any taxpayer reporting less than $1 million in sales on their tax return. The new guidance empowers the California Department of Tax and Fee Administration to:
- Provide an automatic three-month extension for taxpayers filing less than $1 million in sales tax on the return.
- Extend the availability of existing interest and penalty free payment agreements to companies (with up to $5 million in taxable sales).
- Broaden opportunities for more businesses to enter into interest-free payment arrangements.
- Expand interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.
“By providing potentially billions in immediate relief and support, our small businesses can weather the next month as we continue partnering with the Legislature to secure additional funding and investments in small businesses in the new year.”Governor Gavin Newsom
Aside from these new measures, the state government is also supporting small businesses through the Main Street Hiring Tax Credit. This initiative will provide a credit that is equal to $1,000 per qualified employee, up to $100,000 for each small business employer. Applications for this tax credit opened this week.