There’s certainly no disagreement that 2020 has been a real kick in the behind. And with renewed “lock-downs” and continued uncertainty over how the promised vaccine will be rolled out and what impact it will ultimately have, financial instability remains the current “norm.”
The US Congress has just passed a $900 billion COVID aid package. The President has complained about the bill and is pushing for larger direct stimulus payments. The current package, which among many other things, includes $600 “stimulus” checks to individuals and $1,200 checks to families. Trump, however, wants that figure raised to $2,000 per individual.
And though either amount is a mere drop in the bucket for most folks, Treasury Secretary Steven Mnuchin, predicts these payments will begin landing in bank accounts next week. Assuming the President doesn’t derail the process with a veto.
In the meantime, the State of California is mercifully granting some additional relief. The latest lifeline comes in the form of a $500 million aid package aimed at helping keep small businesses stay afloat. The state has also rolled out income tax-deferments, tax breaks, and further aid programs aimed directly at small businesses.
Here’s a brief overview of what the aid programs currently available…
Grants For Small Businesses + Non-Profit Organizations
Small businesses are the engine that makes California go! In fact, over 98% of California’s commercial enterprises and small businesses. And they employ more than 45% of the state’s workforce.
Unfortunately, small businesses have also been hit hardest by the COVID-19 pandemic. And with the latest round of restrictions, the economic woes of small business owners are likely to grow that much worse.
In an effort to at least curb the bleeding, Governor Newsom and the California legislature have authorized $500 million in financial aid to help the state’s 4.1 million small businesses. This comes in the form of $25,000 grants to small businesses and certain non-profit organizations in need.
Massive Income Tax Payment Deferrals
As the fiscal year draws to a close, businesses are faced with the grim prospect of ponying up the cash to pay their tax bills. To assuage concerns over depleting their already strained cash flow to pay taxes, the state has granted a 3-month income tax payment extension to businesses with sales tax receipts of less than $1 million.
And the businesses hardest hit by the COVID restrictions — bars, restaurants, hair + nail salons, among others — can expect additional deferments and breaks to support them as they cling to their sputtering enterprises.
The state is also offering interest-free tax payment plans to larger businesses with up to $5 million in sale tax receipts.
California Rebuilding Fund
A private-public partnership, the CA Rebuilding fund has amassed $125 million in lending capital available for low-interest loans to California small businesses.
The program officially launched at the beginning of December and is continuing to accept applications.
$100 Million Main Street Hiring Tax Credit
Obviously, many of California’s millions of struggling small businesses have been forced to slash their workforces.
To prompt rehiring and stimulate new hires, the state is granting qualified small businesses a $1,000 tax credit for each new hire (capped at $100,000 per individual business).
Tax Relief to Encourage Entrepreneurial Investment
In hopes of spurring new business growth and development, the state is waiving a variety of tax fees associated with launching new businesses. The state is also excluding PPP funds from tax income taxes.
$100 Million in Small Business Relief Loans
Governor Newsom already guaranteed $50 million in disaster relief loans for small businesses. The legislature has since added another $50 million, bringing the available funds to $100 million. And $75 million of this allotment is still available.
More Relief is Coming
The state has made it clear that the $500 million aid package and related support programs are only a start. When the legislature reconvenes in early 2021, they plan to work on orchestrating additional aid for California’s many struggling small businesses.
Looking to Take Advantage of California’s Small Business Aid Programs?
As you can see, the state is offering a myriad of support for small businesses. But most of these programs are only available for a limited time. And those offering direct financial aid are operating with limited funds, which will most definitely disappear sooner than later.
So, if you’re looking to take advantage, now is the time to act. And I’m here to help! Let’s chat ASAP.