$500M for California Small Businesses

California has more than four million small businesses, many of whom have suffered financially during the pandemic.  As of today, December 30, 2020, California’s small business owners can apply for their share of $500-million in grants as part of a state relief program.  This is a grant opportunity; not a loan or debt.  The maximum amount of the grant is $25,000.00, and the deadline for applications is on January 8, 2021 at 11:59 pm PST.  Approval notifications will be sent out on or around January 13, 2020.  [FN 1]

According to the CA Relief Grant website, "[a] small business or small nonprofit must satisfy the following criteria to be eligible to receive a grant award:

1. Must 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) 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)
2. Active businesses or nonprofits operating since at least June 1, 2019
3. Businesses must currently be operating or have a clear plan to re-open once the State of California permits re-opening of the business
4. Business 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
5. Business 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
6. Business must be able to provide acceptable form of government-issued photo ID
7. Applicants 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."  [FN 2]

Further, businesses must provide the following documents during the application process:

1. Application Certification: Signed certification used to certify your business
2. Business Financial Information:
3. Most recent tax return filed (2019 or 2018) – provided in an electronic form for online upload, such as PDF/JPEG or other approved upload format.
4. 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.
5. Government Issued Photo ID: Such as a Driver’s License or Passport.  [FN 2]

Finally, businesses must use the grant funds to pay:

1. All employee expenses including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums;
2. Working capital, overhead (including rent, utilities, mortgage principal and interest payments (excluding mortgage prepayments)), debt payments (principal and interest) incurred before March 1, 2020;
3. Costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety restrictions and business closures;
4. Costs associated with complying with COVID-19 federal, state or local guidelines for reopening with required safety protocols, including but not limited to equipment, plexiglass barriers, outdoor dining, PPE supplies, testing, and employee training expenses; or
5. Any other COVID-19 related expenses not already covered through grants, forgivable loans or other relief through federal, state, county or city programs.  [FN 2]

Businesses can apply through the lenders local to their county.  For example, San Francisco-based businesses can apply to the lenders listed here.  [FN 2]

Footnotes

1. See https://www.kron4.com/news/california/500-million-in-grants-available-to-california-small-businesses/
2. See  https://careliefgrant.com/

Smith Shapourian Mignano PC is available to answer any questions or concerns you may have regarding the CA Relief Grant.
​
This blog does not constitute solicitation or provision of legal advice, and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter in a timely manner, as statutes of limitations may bar your claim.