COVID Small Business Relief: Loans and Grants
Depending on the size of your small business, you may be qualified for certain loans and grants on both the federal and state level.
What is considered a small business?
Small businesses are defined based on what type of industry they belong to. To determine if your business is considered to be a small business by the Small Business Administration, visit the SBA Size Standards webpage.
COVID Federal Small Business Help
The Small Business Administration (SBA) is providing disaster loan assistance in all states. These low-interest loans are targeted toward small businesses and nonprofits that have experienced severe economic injury due to the coronavirus.
As part of the Coronavirus Aid Package (CARES Act), small businesses can also apply for forgivable loans under the Paycheck Protection Program (PPP) that can be used to pay employees and fund other day-to-day business operations. To learn more, visit our guide to the CARES Act or read about the Paycheck Protection Program in particular.
COVID State Small Business Help
California’s IBank has a disaster relief loan guarantee program currently open to small businesses and nonprofits affected by the coronavirus. This program offers up to $20 million in loans through private partners with a 95% guarantee for businesses with 1-750 employees.
IBank also offers $500-$10,000 in loans for startup businesses through their Jump Start Loan Program.
Both of these programs can be found on California’s Small Business Finance Center website. Businesses can also access California’s CalOSBA website to get in contact with various business specialists and advisors.
COVID Local Small Business Help
Some major California cities are also providing unique relief opportunities for local businesses.
The Los Angeles City Council approved $11 million in no-fee microloans between $5,000 and $20,000 for local small businesses. The relief program has no credit score requirements and a 100% Loan to Value ratio. You can find more information on the Los Angeles Mayor’s website.
The City of Sacramento has created a $1 million relief program for businesses directly impacted by the coronavirus. Businesses can receive zero-interest loans of up to $25,000. As of April 2nd, 2020, the city is suspending new applications, but they encourage interested businesses to check with the city's official website for additional funding updates.
The Oakland-based Working Solutions has announced a Small Business Emergency Grant Program, funded in part by the Oakland COVID-19 Relief Fund. This program aims to provide grants to local small businesses whose owners have an income below 80% of the Area Median Income. For more information, visit the City of Oakland's website.
The City of San Diego has created a $6.1 million Small Business Relief fund that provides both grants and loans to local small businesses. Grants and loans will range from $10,000 to $20,000.
COVID Small Business Relief: Private Sources
Some private companies and organizations have established grants for small business relief. Facebook is one such company. The Facebook small business grant was created to help small business owners amid disruptions that are being caused by the coronavirus.
Certain credit card companies and banks, like Bank of America, are also offering economic relief for their small business members.
For a larger list, visit our guide to private grants for small business relief.
The federal government has extended the payment deadline for all first-quarter tax payments from April 15th, 2020 to July 15th, 2020. Small businesses must file IRS Form 7004 to extend their tax payments, while individuals must file IRS Form 4868.
State Tax Relief
The California Department of Tax and Fee Administration has extended the first-quarter filing deadline to July 31st, 2020. This applies to any small business filing a return for less than $1 million and is an automatic extension. For more information, visit the CDTFA's website. First and second-quarter estimated payments are now due July 15th, 2020.
The California Employment Development Department is allowing a 60-day extension on state payroll reports and state payroll taxes for employers facing direct hardship as a result of the coronavirus. Requests for tax assistance must be submitted in writing within 60 days of the original delinquent date. For more information, call the EDD Taxpayer Assistance Center at 1-888-745-3886.
Local Tax Relief
Some major California cities are also providing unique tax relief opportunities for local businesses.
The City of San Francisco has deferred quarterly estimated tax payments for business taxes originally due on April 30th, 2020. These tax payments must instead be paid along with the 2020 annual tax payments by March 1st, 2021. To see what business taxes apply and if your business qualifies, visit the San Francisco Treasurer & Tax Collector website.
Changes to Federal Paid Leave
As of March 18th, 2020, the federal government is providing certain workers paid sick leave in the event that they are ill, quarantined, or seeking medical care.
This relief act applies to employees at small, midsize, and nonprofit companies so long as the employee has been employed for more than 30 days. For more information, you can read the Families First Coronavirus Response Act.
The Department of Labor also recommends that small business employers check if their employee’s sick leave is covered under the Family and Medical Leave Act (FMLA). If an employee or their family is incapacitated due to the coronavirus (or any pandemic illness), their employer is required to provide job-protected, unpaid leave.
So long as employers are covered, they are required to abide by federal FMLA and state FMLA laws. For more information on the FMLA, check out the Department of Labor’s website.
In the event that your small business undergoes financial difficulties during the coronavirus spread, consider implementing these guidelines for the good of your business and its employees:
- Consider putting employees on temporary leave instead of terminating them
- Communicate with customers regarding business closures, reduction of hours, or maintenance changes
- Diversify your suppliers or stock inventory with an adequate amount of supplies to last an extended period of time
- Contact your insurance agent to review any business interruption policies that your business may have in place
- Prepare a plan with your employees regarding present and future business actions regarding the virus
- Review your emergency business continuity plan. If you don’t have one, take a look at New York’s Emergency Planning Process Sheet.
- Determine whether your business is considered essential or nonessential. Visit our guide to essential businesses for more information.
For more business solutions, visit the SBA website.
The Coronavirus Aid Package (CARES Act) is providing extended unemployment benefits to workers who are ineligible for regular unemployment programs but are out of work solely because of the coronavirus pandemic. Unemployment compensation has also been extended by 13 weeks.
The California state government has temporarily waived the one-week unpaid waiting period for unemployment insurance, meaning that workers can collect benefits the first week that they are out of work.
Employers experiencing reduced or cut services due to the coronavirus may apply for the UI Work Sharing Program in order to avoid employee layoffs.
Workers that are temporarily unemployed due to the pandemic and are expected to return to work within a few weeks are not required to actively seek work. Eligible applicants can receive $40-$450 in benefits per week.
For more information, visit California’s EDD website.
NOTE: Workers cannot file for unemployment if they are receiving any kind of direct financial help from your business.
Small business employers should also establish strategies with their employees and customers to avoid spreading the virus:
- Encourage sick employees and customers to stay home
- Separate sick employees from the rest of the employees and encourage them to go home
- Practice good self-hygiene
- Avoid travel
- Clean all work environments routinely and thoroughly
For periodic state updates, visit the State of California’s business website.
NOTE: The State of California has issued a “stay-at-home” executive order shutting down non-essential businesses. To see if your business is considered essential, read the California governor’s executive order.
The best way to prevent the spread of the virus in your business is to create a “work from home” policy. If your business is able to provide remote work opportunities for its employees, consider the following strategies:
- Invest in new technologies and software
- Provide remote training for employees
- Establish a remote communication system
- Enforce a daily routine
- Trust in your employees’ ability to stay on track