California Small Business COVID-19 Relief Grant Program Applications Open on Dec 30, 2020

Brett Johnson, Tax Principal

December 29, 2020

The first of two application windows for the California Small Business Relief Grants opens December 30, 2020 and closes January 13, 2021. Eligible small businesses and non-profits that have been impacted by COVID-19 are able to apply for grants of up to $25,000 to help with expenses incurred due to COVID-19 and mandated health and safety restrictions. Approximately $237 million in grant funding is expected to be awarded in Round 1, with awardees notified in January 2021.

Overview

On November 30, 2020, Governor Gavin Newsom announced the creation of a $500 million relief fund to help California small businesses impacted by COVID-19. Businesses must be located in California and have gross receipts of less than $2.5 million on their most recent income tax return. Eligible small businesses may apply for grants of between $5,000 and $25,000.

The grant process will be administered by the California Office of the Small Business Advocate (CalOSBA) in partnership with Lendistry, a small business lender that will host and manage the application portal and make the grant payments to approved applicants.

Eligible small businesses and non-profits may apply for grants up to the following amounts based on gross receipts in their most recent tax return filed, (2019 or 2018).

Eligible Business or Non-Profit Gross Revenue	Grant Award Available per Business or Non-Profit
Annual gross revenue $1,000 to $100,000	$5,000 grant
Annual gross revenue greater than $100,000 up to $1,000,000	$15,000 grant
Annual gross revenue greater than $1,000,000 up to $2,500,000	$25,000 grant

Grant funding may be used for the following expenses in California –

Payroll costs, health care benefits, paid sick, medical or family leave, and insurance premiums
Working capital, overhead (including rent, utilities, current or past mortgage principal and interest, and debt payments incurred before March 1, 2020)
Costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety restrictions
Costs associated with complying with COVID-19 guidelines for reopening with required safety protocols, including but not limited to equipment, plexiglass barriers, outdoor dining, PPE supplies, testing, and employee training expenses
Any other COVID-19 related expenses not already covered through grants, forgivable loans or other relief through federal, state, city or county programs

Grant funding will be prioritized based on key factors, including the following –

Geographic distribution based on COVID-19 safety restrictions, looking at things like county status and the new Regional Stay at Home Order available at https://covid19.ca.gov/safer-economy/
Industry sectors most impacted by the pandemic
Underserved small business groups served by the State supported network of small business centers (i.e., businesses majority-owned and run on a daily basis by women, minorities/persons of color, veterans and businesses located in low-to-moderate income and rural communities).

Application Process

Between December 30, 2020 and January 8, 2021, eligible small business will need to complete a grant application via an online portal. As part of the application process, applicants will select a community development partner in their geographic area. In addition, applicants will need to –

Upload certain financial and organizational documents
Self-certify the accuracy of information by signing an Application Certification
Provide a copy of a government-issued photo ID
Provide acceptable evidence of minimum gross annual revenue of at least $1,000 per year

Applicants will need to provide information around the purpose of the grant and indicate if the grant will create new jobs. In addition, they will need to provide information regarding the number of both full-time and part-time employees and the number of jobs both created and retained as a result of the grant funding. In keeping with the stated desire of the Grant Program to assist underserved communities, applicants will need to provide business demographic information, as well as their NAICS code.

Application to Business Owners

The grant funding is meant to assist California small businesses that have been most greatly impacted by COVID-19. If you believe that these grant opportunities may apply to you, please contact one of the following HCVT state and local tax team members for assistance to evaluate their eligibility and to assist in preparing an application.

Tax Alerts

California Small Business COVID-19 Relief Grant Program Applications Open on Dec 30, 2020

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