California Extends COVID-19 Relief Grant for Small Businesses, Not-for-Profits
by
Gabriel Sermeno, Senior Manager, State & Local Tax Services, and
Georgia Green, Manager, Health Care Practice
This article was updated April 19, 2021.
On February 23, 2021, Governor Gavin Newsom signed a legislative package to provide further immediate assistance through the COVID-19 Relief Grant to help Californian families and businesses.
Part of this package includes a four-fold increase—from $500 million to $2.1 billion—in grant funding to small businesses and not-for-profit cultural institutions.
These funds and tax relief measures build on previous, ongoing efforts to support small businesses during the pandemic.
Previous relief included legislation signed November 30, 2020, which provided immediate assistance for small businesses, including not-for-profits, impacted by the COVID-19 pandemic.
Additional Rounds of COVID-19 Relief Grant Funding
With this increased funding, there are now additional rounds of funding to which small businesses can apply. Following are details for rounds one through six.
Timeframes and Criteria for Application Rounds
How to Apply for COVID-19 Relief Grant
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.
Eligibility
To apply, cultural institutions must be a registered 501(c)(3) not-for-profit entity that matches one of the 13 listed North American Industry Classification System (NAICS) Codes that can be found in the not-for-profit cultural institution application guide on the CalOSBA website.
All businesses—for-profit and not-for-profit alike—must have a physical address in California. Not-for-profit businesses must be registered 501(c)(3), 501(c)(6), 501(c)(19).
Apply Online
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.
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
Application Amount Is Based on 2019 Gross Revenue
In rounds five and six, there will be $729 million available in grant funding in each round for for-profit and not-for-profit organizations.
The amount that businesses can apply for is contingent on the applicant’s gross annual revenue as filed on their most recent tax return (2019). Those that have gross revenue between $1,000 and $2.5 million are eligible; this excludes arts and cultural organizations that have a different set of eligibility criteria, as described in the next section.
Application Criteria and Amounts
Different Application Process for Cultural Organizations
Previously, there was no designated amount allocated nor a separate application process specifically for not-for-profit cultural institutions. Under the expanded package, $47.5 million of the $2.1 billion is earmarked for these institutions.
Not-for-profit cultural organizations now have a separate application through which they can apply for grants between $5,000 and $25,000. Application dates are from March 16 to March 26.
Application Criteria and Amounts
Additional Tax Relief Measures
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.
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.
Additional Resources
Special thanks to Consulting Senior Pat Oungpasuk for her contributions to this article.
Additional Resources
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.