California has increased support for California small businesses through grants, hiring tax credits, automatic sales tax extensions, and access to capital.
The California Small Business COVID-19 Relief Grant Program
This program provides grants to small businesses and nonprofits impacted by COVID-19. Click here to begin preparing your documents. Applications open beginning Wed 12/30 and through Wed 1/13.
"Main Street" Small Business Hiring Tax Credit
Qualified small businesses adversely impacted by Covid-19 can reserve tax credits for hiring full-time employees. There are a limited number of credits available.
To qualify for the credit, taxpayers (employers) must:
- Have 100 or fewer employees on December 31, 2019 (all employees, including part-time employees).
- Have experienced a 50% decrease in gross receipts from April to June 2020, compared to the gross receipts in April to June 2019.
- Apply for a tentative credit reservation from CDTFA December 1, 2020 through January 15, 2021.
For more information or to reserve your credit, click here.
Sales Tax Relief
There is also an automatic three-month tax extension for taxpayers filing less than $1 million in sales tax, an extension of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales, and expanded interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on Covid-19 transmissions. For more information, click here.
Access to Capital & Technical Assistance
The California Rebuilding Fund is now taking loan applications to support California's small businesses—especially those located in economically disadvantaged and historically under-banked areas. Businesses with 50 employees or less and revenues less than $2.5 million or below in 2019 are eligible to apply. For more information and to apply for capital, click here.
Additional Support for Business Owners
During this unprecedented economic time, California has taken multiple actions to support small businesses. This includes:
- Expanding eligibility for the California Earned Income Tax Credit to self-employed and small business owners.
- Waived $800 minimum franchise tax for small and medium-sized businesses during their first year of business creation.
- Exempting Paycheck Protection Program (PPP) loans provided to California small businesses under the CARES Act.
For a complete list of programs to support California businesses, click here.
Resources to Help Businesses Maintain Their Operations
- The California Office of the Small Business Advocate is available to help businesses identify resources and obtain answers to key questions https://business.ca.gov/advantages/small-business-innovation-and-entrepreneurship/how-we-can-help/
- Small businesses looking for advice about business operations during the COVID-19 emergency can rely on the 70 business assistance centers operating throughout California. These business assistance centers offer free one-on-one business counseling, including the discussion of options for accessing capital: https://static.business.ca.gov/wp-content/uploads/2019/12/2019-TA-Providers-Guide.pdf
- At California's Small Business Finance Center, small businesses can access a range of financial products, including loan guarantees and direct loans: https://www.ibank.ca.gov/small-business-finance-center/
- California maintains two credit enhancement programs to help small business obtain loans from traditional and nontraditional lenders, including the Small Business Loan Guarantee Program and a Small Business Loss Reserve Program.
- Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return. For questions, employers may call the EDD Taxpayer Assistance Center. Toll-free from the U.S. or Canada: 1-888-745-3886
- GO-Biz main COVID-19 resource webpage with links to the IBank, Small Business Advocate, State Treasurer, Labor and Workforce Agency, Franchise Tax Board, and Department of Tax and Fee Management: https://business.ca.gov/coronavirus-2019/
Employer Guidance from California Labor Agency
- Guidance on how to protect workers from exposure to COVID-19: https://www.labor.ca.gov/coronavirus2019/
- Guidance on reduced work hours, potential closures, and layoffs: https://www.edd.ca.gov/about_edd/coronavirus-2019.htm
Employer Guidance from the Federal Government
- The federal Center for Disease Control and Prevention provides guidance for businesses and employers: https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html
- The federal Small Business Administration is opening its Economic Injury Disaster Loan Program, among other resources. More information is available about loans, contracting opportunities, and other resources available at https://www.sba.gov/page/guidance-businesses-employers-plan-respond-coronavirus-disease-2019-covid-19?utm_medium=email&utm_source=govdelivery
Resources Available to Employees
- Summary chart with links to benefits available to workers: https://www.labor.ca.gov/coronavirus2019/#chart
- Labor and Workforce Development Agency's primary website for COVID-19, including information on support services for workers and interim guidelines for protecting workers: https://www.labor.ca.gov/coronavirus2019/
- Governor has waived the one-week waiting period for unemployment. Workers can receive unemployment the first week of missed work: Governor's Executive Order
Reduced Work Hours
Employers experiencing a slowdown in their businesses or services as a result of the coronavirus impact on the economy may apply for the UI Work Sharing Program.This program allows employers to seek an alternative to layoffs — retaining their trained employees by reducing their hours and wages that can be partially offset with UI benefits.Workers of employers who are approved to participate in the Work Sharing Program receive the percentage of their weekly UI benefit amount based on the percentage of hours and wages reduced, not to exceed 60 percent.
Visit Work Sharing Program to learn more about its benefits for employers and employees, and how to apply.
Potential Closure or Layoffs
Employers planning a closure or major layoffs as a result of the coronavirus can get help through the Rapid Response program. Rapid Response teams will meet with you to discuss your needs, help avert potential layoffs, and provide immediate on-site services to assist workers facing job losses. For more information, refer to the Rapid Response Services for Businesses Fact Sheet (DE 87144RRB) (PDF) or contact your local America’s Job Center of CaliforniaSM
Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.
For questions, employers may call the EDD Taxpayer Assistance Center.
- Toll-free from the U.S. or Canada: 1-888-745-3886
- Hearing impaired (TTY): 1-800-547-9565
- Outside the U.S. or Canada: 1-916-464-3502
California Small Business COVID-19 Relief Grant Program
Where can small businesses and nonprofits get help on how to apply?
The CA Relief Grant website: https://careliefgrant.com/tips/
Over 500 Statewide Partners in every county and in 18 languages: https://careliefgrant.com/
Where can a small business and nonprofits get help once they have started an application or are having challenges with completing their application?
First, small businesses need to check their emails, including their junk mail folders. Lendistry sends information by email for small businesses to login and take additional steps, if needed. Many small businesses have applied more than once, creating confusion with the emails they are receiving and their application status, so they should look for both entries if that is the case.
Next, small businesses can call Lendistry. Wait times are significant in these final days as businesses and nonprofits are rushing to complete their applications and there is a more than 4 times great volume of calls.
As a result, Lendistry has significantly increased staffing and call center hours to as late as 11pm for the remainder of ROUND ONE through Wednesday. Applicants can elect to have a call back (which only occur during legally allowed call center hours). Applicants must be ready to pick up the call as there will only be one call back.
New expanded hours:
Monday, January 11 - 7am - 11pm
Tuesday, January 12
Wednesday, January 13, 6 am - 11 pm - NOTE: Application closes at 11:59pm
Thursday, January 14, 7 am – 7 pm
Friday, January 15, 7 am - 7 pm
* Call Center: 888.612.4370
*If an applicant MISSES the call (or their phones screen 800/888 numbers as spam), they will not receive another call back!
Next, small businesses can contact their partner directly. Many partners are offering one on one consulting and webinars to help applicants.
Finally, they can email firstname.lastname@example.org if they would prefer.
When will small businesses and nonprofits be notified of the status of their applications and receive their awards, if qualified?
Businesses should begin receiving notifications of their award status (approved, waitlisted, or not selected) beginning January 15th and continuing in the coming weeks. Applicants should add Lendistry to their safe senders list in their emails to ensure they receive the notification. Once approved, application will be subject to additional verification requirements before grant funds will be disbursed.
Businesses that do not receive a grant in Round 1 will automatically be put in the pool for Round 2 funding.
If approved after additional verification requirements are provided, businesses will begin receiving ACH transfers starting January 22nd through early March.