2021 California small business relief programs: explained
Business owners in the state of California who have been hit hard by the pandemic may avail themselves of the resources that the government has made available to them. In this blog we will discuss the major California relief programs available for small businesses.
California Relief Grant Program
You may have heard that Governor Newson recently announced the creation of a $500 million COVID relief Grant for small businesses that have been impacted by COVID. Funds will be awarded in amounts up to $25,000 per recipient. This grant is not awarded on a first come, first-served basis, but instead is based on certain eligibility criteria.
Also please note this is a grant, not a loan. What is the difference between a grant and a loan? A loan must be paid back while a grant does not.
Here are the eligibility requirements and the application form. The deadline for the first round of applications has been extended to 1/13/2021.
Main Street Small Business Tax Credit
This is a hiring tax credit which applies to businesses that:
1) had fewer than 100 employees as of 12/31/2019 and
2) suffered a 50% or greater decrease in taxable gross receipts in the second quarter of 2020 versus the second quarter of 2019.
Qualified businesses may receive a credit of $1,000 for each additional qualified employee they hired between 4/1/2020 to 06/30/2020 as compared to 07/1/2020 and 11/30/2020. The calculation is based on employee head count.
For each additional employee the employer can claim a $1,000 credit toward state income or sales/use taxes.
Read more about the Main Street Small Business Tax Credit.
California Rebuilding Fund
If your business has less than 50 employees and had gross revenues of less than $2.5 million in 2019, you may be eligible to apply for a CA Rebuilding loan. This loan offers up to $100,000 per qualifying business. It needs to be paid back over a 3-5 year term with a fixed annual interest rate of 4.25%.
Learn about the California Rebuilding Fund.
Summary
We hope you will find this information helpful for you and your business. If you have questions on these programs or would like to discuss your and/or your business’s financial needs in detail, please contact us.