Last week, Governor Gavin Newsom and the California Legislature reached an agreement on the 2020-21 state budget. The budget focuses on offsetting the impacts of COVID-19, but includes significant assistance for economic development programs. Details are still forthcoming and we will let you know more when we know more. Below is a summary of small business provisions in the state budget.
- $75 million for the Small Business Expansion Fund, which provides loan guarantees for small business lending.
- I Bank options for providing financing assistance to small businesses will be expanded. I Bank will now be able to provide assistance in conjunction with financial companies or financial institutions, as well as establish programs necessary to help small businesses obtain capital.
- Creation of the “SEED” Initiative (Social Entrepreneurs for Economic Development) program. This program will support individuals of limited English proficiency regardless of immigration status with starting and growing small businesses, and will be implemented through nonprofit community-based organizations.
- Expanded eligibility to access California’s Earned Income Tax Credit (EITC) beyond individuals with social security numbers to include those with a federal individual taxpayer identification number.
- The existing $800 tax for new California businesses will be waived for three years (2021-2023).
For more information on the state budget, our colleagues at CALED have a summary of other economic development provisions.