Financial Relief and Assistance for Businesses Affected by Covid-19
Additional assistance is available to California small businesses who have been affected by the Coronavirus pandemic. The assistance includes:
- Tax relief in the form of credits and deferrals
- Providing the California Rebuilding Fund with credit for small business loans
- Providing the Small Business Disaster Relief Loan Guarantee Program with $50 million in funding
- Offering existing SBA borrowers Small Business Debt Relief
- Providing $50 million to small businesses who would normally be ineligible for tradition loans through the Small Business Loan Guarantee Program via IBank
- Additional funding to stimulus programs, such as PPP and EIDL
- Access to local advisors from state-funded small business centers
- Local governments authorized to prevent evictions of commercial renters
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Small Business Relief Grants
Small businesses that have been impacted by coronavirus can apply for the Small Business Covid-19 Relief Grant between the 31st of December and the 13th of January. Go to CAReliefGrant.com to prepare your documents. $500 million worth of grants is available.
Additional Assistance for Small Businesses
- The Governor’s Office of Business and Economic Development have collated these Resources and services for small businesses
- The Department of Tax and Fee Administration have provided Tax relief and extensions
Labor and Workforce Support for Businesses
- The EDD has provided resources for employers with information about WARN Act requirements, workplace health and safety guidelines, potential layoffs or closure, tax assistance, and reduced work hours.
- Information about COVID-19 infection in the workplace can be found on the California Department of Fair Employment and Housing’s website.
- The California Labor and Workforce Development Agency have also released employer resources and assistance.
- Read the frequently asked questions collated by the California Department of Industrial Relations. It provides information about the Covid-19 reporting and recording requirements.
Policies and Resources for Employers
Reopening businesses need to ensure their premises are safe and offer low-risk of contracting Covid-19 for their staff and customers. If you are planning to reopen, read this employer playbook to ensure you are ready. Ensure you are aware of any industry-specific guidance applicable to your business.
Your business will need to review its policies and communicate changes to employees. For example, employees who test positive for Covid-19 must report their illness to you and stay home. These resources offer more information:
- Find childcare
- Support for working families (PDF)
- New Covid-19 specific government programs involving COVID-19 sick leave and workers’ compensation
- Family-friendly practices for employers (PDF)
Financial Assistance Provided by the Federal Government
Paycheck Protection Program
PPP is a federally funded program that provides nonprofits and small businesses with forgivable loans. A second round of PPP loans has been announced, and businesses who meet these criteria can apply for a second loan.
- Their gross revenue for one quarter in 2020 is at least 25% less than the same quarter in 2019.
- They employ 300 employees or less.
The government has capped the maximum loan amount of a second PPP loan at $2 million. These loans may be used to pay expenses such as supplier costs, rent, employee wages, utilities, qualifying property damage, and worker protection expenses. Up to $150,000 of a PPP loan may be forgiven as long as they are used for covered expenses.
Any expenses paid for with forgiven first round and second round PPP loans are also tax-deductible. The loans will also not be included in taxable income. Read more about PPP on the SBA website.
Economic Injury Disaster Loan
The SBA has released a second round of EIDL loans and applications are now open. For more information, visit the SBA’s Disaster Loan Applications website. Loan applications will be processed in the order they are received.
Covid-19 Paid Leave
Small businesses with less than 500 employees may apply to be reimbursed for Covid-19 paid leave costs. They may be credited for costs of paid leave between the 1st of April and the 31st of December 2020. Visit the Paid Leave section of the FFCRA website for more information. Also, read the paid leave frequently asked questions about tax credit reimbursement for more information.
Frequently Asked Questions
What is a loan guarantee?
A loan guarantee reduces the risk of the lender, allowing the borrower to claim more credit. Under the Small Business Finance Center’s Disaster Relief Loan Guarantee Program, IBank will guarantee 95 percent of the loan amount. This means that small businesses which might otherwise struggle to secure loans can access financial assistance.
Who Can Apply for a Loan Guarantee?
Any small businesses that meet the program’s eligibility requirements and have been negatively affected by the Coronavirus pandemic.
How Small Is a Small Business?
The business must employ at least 1 employee, but no more than 750. It must also be formed as an entity, such as:
- Sole Proprietor
An individual cannot apply for a loan from the program, but they may be a co-borrower or guarantor for the loan. There are no immigration status or citizenship requirements, as it is a small business loan.
Businesses must operate in an industry that appears on the North American Industry Classification System (NAICS) codes list, and conduct business activities that appear on the eligibility requirements. They must also be located in an area declared a disaster area. On March 22, 2020, the state of California was declared a Coronavirus pandemic major disaster area.
Are Any Businesses Excluded?
Passive real estate businesses, such as rental income businesses are not eligible.
How Much Can I Borrow?
The maximum loan amount of the Small Business Finance Center’s Disaster Relief Loan Guarantee Program is $1.25 million with a maximum guarantee of $1 million. Small businesses will be prioritized, particularly those from immigrant or low-wealth communities who require less than $50,000 of assistance.
What are the Terms of the Loan?
The guarantee lasts for up to seven years, but the loan terms will be negotiated with the lending institution.
How Can I Apply for a Loan Guarantee?
Follow these steps to apply for a loan guarantee:
- View the list of participating lenders
- Contact your nearest lender to apply
How Soon Will I Receive My Loan?
You can apply for the loan immediately and receive funding within a few days. Funding time will depend on the lender and size of the loan and is subject to you providing complete information.
Will the Loan Help Minority and Low-Wealth Communities?
Yes, the disaster relief program works with California CDFIs to provide relief to the most distressed communities. CDFIs will help us to provide investment where it will do the most good, especially in immigrant and low-wealth communities.
Are Faith-Based Businesses Eligible For the Loan Guarantee?
Faith-based businesses that conduct business activities aside from worship will be eligible if:
- They are legal business entities
- They have been affected by the Coronavirus pandemic
This applies to both nonprofit and other kinds of faith-based business entities.