COVID-19 Assistance Extended for California Small Business, Not-for-Profits
by
Gabriel Sermeno, Senior Manager, State & Local Tax Services, and
Georgia Green, Manager, Health Care Practice
This article was updated January 8, 2021.
The deadline for first-round applications for additional immediate assistance for California small businesses, including not-for-profits, impacted by the COVID-19 pandemic is now extended to January 13, 2021.
California Governor Gavin Newsom announced this assistance on November, 30, 2020. Following this, Newsom also proposed a comprehensive $4.5 billion funding package—which includes an additional $575 million on top of the $500 million previously allocated to the Small Business COVID-19 Relief Grant—on January 5, 2021.
These funds and tax relief measures build on previous, ongoing efforts to support small businesses during the pandemic.
An overview of the relief effort follows.
Assistance Provisions
The new assistance includes the following:
- Tax relief
- $475 million added to the Small Business COVID-19 Relief Grant program, with an additional $575 million proposed
- More funding for the California Rebuilding Fund
Tax Relief
Businesses filing less than $1 million in sales tax will receive an automatic 90-day income tax extension.
Penalty- and interest-free payment arrangements will be available to businesses with up to $5 million in taxable sales.
Additionally, larger businesses severely impacted by COVID-19 will have more opportunities to enter interest-free payment arrangements.
COVID-19 Relief Grant
The $475 million grant will be administered by the California Office of the Small Business Advocate (CalOSBA) via Lendistry, a technology partner and the intermediary that will host and collect applications as well as distribute grant funds.
Eligibility
Underserved micro- and small businesses—both for-profit and not-for-profit—may apply for grants up to $25,000 to be distributed by early 2021.
Businesses must have a physical address in California. Not-for-profit businesses must be registered 501(c)(3), 501(c)(6), 501(c)(19).
Application Amounts
The amount that businesses can apply for is contingent on the applicant’s gross annual revenue.
Two-Round Process
There will be two rounds of funding available. Each round will disburse $237.5 million in grant money. There are two stages to each round:
- Stage one. Confirms the applicant meets eligibility requirements.
- Stage two. Requires the selected applicant to provide additional documentation to certify that the information provided is accurate, including bank account information, for fund disbursement.
Timeline
Round one began accepting applications on December 30, 2020, and will close on January 13, 2021, at 11:59 p.m. PST. This timeline was extended from January 8, 2021.
Applicants will begin receiving approval notifications on January 15, 2021. The timeline for round two applications are forthcoming.
Required Documents
Stage One
- Application Certification
- Grant application, completed through the online portal
- Government-issued photo identification, such as a driver’s license or passport
- Business financial information
- Most recent tax returned filed—2019 or 2018
- Evidence of minimum gross annual revenue between $1,000 and $2.5 million
Stage Two
- Copy of official filing with the California Secretary of State, if applicable, or local municipality, such as:
- Articles of Incorporation
- Certificate of Organization
- Fictitious Name of Registration or Government-Issued Business License
- Not-for-profits must provide a copy of their most recent IRS tax exemption letter
- Verification of bank account
How to Apply
Eligible applicants will need to apply online through a Lendistry partner. You can select partners based on those available in your county or by language. Any partner you apply through is acceptable.
You must first complete the online application. Once complete, you’ll receive a confirmation email with log-in information to upload the necessary documents.
Additional Information
Below are resources for applicants should they require additional help and guidance:
California Rebuilding Fund
An additional $12.5 million will be added to the California Rebuilding Fund, a loan program to help small businesses impacted by COVID-19. This increases the total available funding to $37.5 million.
For this program, small business is defined as an organization with a gross revenue of less than $2.5 million in 2019 with less than 50 full-time equivalent employees.
We’re Here to Help
To learn how these relief opportunities could help your business or organization, as well as how to address compliance with applicable restrictions or requirements, contact your Moss Adams professional.
Special thanks to Consulting Senior Pat Oungpasuk for her contributions to this article.
Note on COVID-19
During this unparalleled time, we’re closely monitoring the COVID-19 situation as it evolves so we can provide up-to-date guidance and support to help you combat uncertainty. For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources:
Gabriel Sermeno has worked in economic development consulting since 2011. He consults clients on credits and incentives related to economic development activity such as job creation and retention, capital investment, and employee training. He can be reached at (310) 481-1215 or gabriel.sermeno@mossadams.com.
Georgia Green has worked in the health care industry since 2011. She provides strategic and operational consulting services to health care providers and payers and has extensive experience helping clients integrate value-based care models from start to finish. She can be reached at (916) 503-8251 or georgia.green@mossadams.com.