California Stimulus Package Details
The California stimulus package to help struggling businesses in the state has been launched by Governor Newsom. It includes the California Rebuilding Fund, California Hiring Credit, and California Small Business Grant Fund.
California Rebuilding Fund
California Stimulus Package - Low Interest Loans for Small Business
The California Rebuilding Fund offers up to $100,000 and is separate and different than the Federal EIDL and PPP Loan programs. Loans offer a fixed 4.25% interest rate over 36-60 months. Eligible businesses must employee 50 or fewer employees, had gross revenues less than $2.5 million in 2019, must have suffered economically as a result of COVID-19, and must meet other operating criteria.
Applicants must submit a pre-application online. The CRF will review your application. Once matched with a lender, you will receive an email or call to begin the full loan application process.
California Hiring Tax Credit
California Stimulus Package - Main Street Small Business Tax Credit
The (California) Main Street Small Business Tax Credit was enacted with State Senate Bill 1447. This bill provides financial relief to small businesses who have faced economic disruptions and job losses in 2020. Taxpayers can apply a small business hiring credit against California State Income Taxes - OR - a credit for Sales and Use taxes. However, the tax credits are limited and business employers must apply for a tentative credit reservation. Funds are limited, and therefore, not all businesses will be allowed a tax credit.
California Small Business Grant Fund
As part of the California Stimulus Package, the government has set aside $500 million for the creation of a small business grant fund. This grant will be available through the California Office of the Small Business Advocate (CalOSBA). The amount of grant funding ranges from $5,000 to $25,000. Businesses are eligible based on their annual revenue as documented in their most recent tax return and Non-profit organizations are also eligible.
Eligible Businesses Annual Revenue | Grant Amount Available Per Business |
|---|---|
$1,000 to $100,000 | $5,000 |
Greater than $100,000 up to $1,000,000 | $15,000 |
Greater than $1,000,000 up to $2,500,000 | $25,000 |
Eligibility
A small business or small nonprofit must satisfy the following criteria to be eligible to receive a grant award:
- 1Must meet the definition of an “eligible small business”. An “eligible small business” means (i) a “small business” (sole proprietor, independent contractor, 1099 work, and or registered “for-profit” business entity (e.g., C-corporation, S-corporation, limited liability company, partnership) that has yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on most recently filed tax return) or (ii) a “small nonprofit” (registered 501(c)(3), 501(c)(19), or 501(c)(6) nonprofit entity having yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on most recently filed Form 990)
- 2Active businesses or nonprofits operating since at least June 1, 2019
- 3Businesses must currently be operating or have a clear plan to re-open once the State of California permits re-opening of the business
- 4Business must be impacted by COVID-19 and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic
- 5Business must be able to provide organizing documents including 2018 or 2019 tax returns or Form 990s, copy of official filing with the California Secretary of State, if applicable, or local municipality for the business such as one of the following: Articles of Incorporation, Certificate of Organization, Fictitious Name of Registration or Government-Issued Business License
- 6Business must be able to provide acceptable form of government-issued photo ID
- 7Applicants with multiple business entities, franchises, locations, etc. are not eligible for multiple grants and are only allowed to apply once using their eligible small business with the highest revenue
Ineligible Businesses
Businesses that do not qualify for this California Stimulus Package are:
- 1Businesses without a physical location in California
- 2Nonprofit businesses not registered as either a 501(c)(3), 501(c)(19), or 501(c)(6)
- 3Government entities (other than Native American tribes) or elected official offices
- 4Businesses primarily engaged in political or lobbying activities (regardless of whether such entities qualify as a 501(c)(3), 501(c)(19), or 501(c)(6))
- 5Passive businesses, investment companies and investors who file a Schedule E on their personal tax returns
- 6Churches and other religious institutions (regardless of whether such entities qualify as a 501(c)(3), 501(c)(19), or 501(c)(6))
- 7Financial businesses primarily engaged in the business of lending, such as banks, finance companies and factoring companies
- 8Businesses engaged in any activity that is illegal under federal, state or local law
- 9Businesses of a prurient sexual nature, including businesses which present live performances of a prurient sexual nature and businesses which derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature
- 10Businesses engaged in any socially undesirable activity or activity that may be considered predatory in nature such as rent-to-own businesses and check cashing businesses
- 11Businesses that restrict patronage for any reason other than capacity
- 12Speculative businesses
- 13Businesses of which any owner of greater than 10% of the equity interest in it (i) has within the prior three-years been convicted of or had a civil judgment rendered against such owner
- 14“Affiliated” companies (as such term is defined in 13 C.F.R. § 121.103)
- 15Multiple business entities, franchises, locations, etc. are not eligible for multiple grants and are only allowed to apply once using their eligible small business with the highest revenue
