How Your California Business or Nonprofit Can Get Economic Help for COVID-19

Along with causing a public health crisis, COVID-19 is also causing an economic crisis. There are lots of resources out there, but it’s hard to know where to look for them. We’ve tried to do that work for you. If we’re missing anything, please leave a comment!

If you need help for yourself, your family, as an employee, click on this link.

Small Businesses

California Emergency Grants — Work Share Program

• Employers experiencing a slowdown in their businesses or services as a result of the coronavirus’ impact on the economy may apply for the UI Work Sharing Program.
• This program allows employers to seek an alternative to layoffs — retaining their trained employees by reducing their hours and wages that can be partially offset with UI benefits.
• Apply here.

Paycheck Protection Program

• The Paycheck Protection Program offers forgivable loans for various organization types, including small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) nonprofits with fewer than 500 workers and some 501(c)(19) veteran organizations, the self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply.
• Generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven. That means that once businesses receive their loans, a new clock will begin to tick. They’ll have to use the money within two months to avoid repaying it.
• The size of the loans would equal 250 percent of an employer’s average monthly payroll. The maximum loan amount would be $10 million.
• Loans covering salaries of over $100,000 a year wouldn’t qualify for forgiveness.
• See more information and apply here.

Small Business Administration (SBA) Economic Injury Disaster (EIDL) Loans & Grants

• Loans are generally available to businesses and nonprofits with fewer than 500 employees including sole proprietors and independent contractors.
• SBA will provide an advance of $10,000 to those that apply for a loan. The $10,000 does not have to be repaid.
• EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and up to 2.75% for nonprofits, as well as principal and interest deferment for up to 4 years. The loans may be used for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
• EIDLs can be approved by the SBA based solely on an applicant’s credit score.
• EIDLs that are smaller than $200,000 can be approved without a personal guarantee.
• Apply here.

Local Assistance

• MANY local governments are giving out grants and low-interest loans for small businesses and nonprofits. For example, check out this link for SF businesses and this link for SF nonprofits. Please go to your local city/county webpage or your local community foundation webpage for resources that might apply for you.

Mid-sized Businesses

Emergency Loans

• While not eligible for paycheck protection loans, mid-size businesses — those with 500 to 10,000 employees — are also eligible for direct loans. To be eligible, a business must make a “good-faith certification” that:
• It intends to re-store at least 90% of its workforce that existed as of February 1, 2020.
• It will not outsource jobs for the term of the loan plus an additional two years.
• It will not repeal an existing collective bargaining agreement for the term of the loan plus an additional two years.
• It will remain “neutral in any union organizing effort for the term of the loan.

Business Tax Breaks

• Businesses are eligible for an employee retention tax credit if 1) your business operations were fully or partially suspended due to a COVID-19 shut-down order; or 2) gross receipts declined by more than 50% compared to the same quarter in the prior year.
• Eligible businesses can get a refundable 50% tax credit on wages up to $10,000 per employee. The credit can be obtained on wages paid or incurred from March 13, 2020, through December 31, 2020.
• Businesses and self-employed individuals can delay their payroll tax payments. These payments, the employer share of Social Security tax owed for 2020, can instead be deferred and paid over the next two years. Fifty percent must be paid by the end of 2021 and 50% must be paid by the end of 2022. (Note: The ability to defer these taxes does not apply to a business that has a Paycheck Protection loan forgiven.)
• Businesses will be able to increase their business interest expense deductions on their tax returns. For 2019 and 2020, the amount of interest expense businesses are allowed to deduct on their tax returns is increased to 50% from 30% of taxable income.
• Businesses, especially those in the hospitality industry, will be able to immediately write off costs associated with improving facilities, increasing cash flow.

California Nonprofits

• California nonprofits can find a full list of resources here, prepared by California Association of Nonprofits.