On Monday, Governor Gavin Newsom announced additional aid for businesses struggling because of the pandemic during a somber update on COVID cases surging across the state.
He warned the surge could bring on more restrictions in the coming days, “We have to be more mindful than ever about the economic impact and consequences of these further restrictions.”
The plan was detailed online where business owners can apply for grants, loans and tax relief.
Jason Schneider, a partner at Osborne Rincon CPAs, who specializes in business tax says this will help because anything right now will help businesses that are struggling to survive the pandemic, “They’re really having a hard time trying to pay their payroll, pay their rent, keep their doors open,” adding that this relief must be bolstered by more aggressive federal aid, “It really is putting a Band-Aid on a serious issue, I think there needs to be more monies that don’t need to be paid back kind of pumped into the system because ultimately in three months when this bill comes due if they don’t have the cash to pay it … it’s still going to be due at that point.”
Eric Morcus, the owner of Kaiser Grille in Palm Desert says the grants that will be offered won’t do enough for businesses like his that have been closed since the pandemic started, “I’ll take anything that can help with but it doesn’t go very far to open up a shuttered restaurant with all the bills that have been piling up … it’s like kicking the can down the road.”
Newsom himself said this was just the beginning of aid that was to come and more will be done during the next
For More information on how to apply click here: CA SMALL BUSINESSES
Office of Governor Newsom:
Tax Relief for Businesses Impacted by COVID-19
In April 2020, the Governor, through Executive Order, allowed taxpayers to apply for penalty and interest relief for 90 days for any taxpayer reporting less than $1 million in sales on their tax return. Through November 22nd, some 9,287 plans with almost $149 million in tax relief have taken advantage of this program.
The Governor will direct the California Department of Tax and Fee Administration to do the following:
- Provide an automatic three-month extension for taxpayers filing less than $1 million in sales tax on the return and extend the availability existing interest and penalty free payment agreements to companies (with up to $5 million in taxable sales)
- Broaden opportunities for more businesses to enter into interest-free payment arrangements.
- Expand interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.
$500 Million for New COVID Relief Grant for Small Business
The Governor announced the creation of a $500 million COVID Relief Grant administered by the California Office of the Small Business Advocate (CalOSBA) at the Governor’s Office of Business and Economic Development for small businesses that have been impacted by COVID and the health and safety restrictions. Funds would be awarded to selected intermediaries with established networks of Community Development Financial Institutions to distribute relief through grants of up to $25,000 to underserved micro and small businesses throughout the state by early 2021. Non-profits would also be eligible for these grants. CalOSBA is establishing the program and will make it available to small businesses as soon as possible – for updates on availability visit here.
Increase Funding for the California Rebuilding Fund by $12.5 million.
Last week, the Governor announced the opening of the California Rebuilding Fund which makes available $25 million to help impacted small businesses rebuild from the economic crisis and keep local economies strong. This program is built to be a resource in the market for the next year as businesses pivot and recover.
An increase of $12.5 million would allow the Fund to be fully capitalized. The additional funding will help the 3rd party administrator of the fund raise $125 million to make more low-interest loans to small businesses with less access to loans from traditional banking institutions.