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California Small Business Covid-19 Relief Grant Program

December 31, 2020

On November 30, 2020 Governor Gavin Newsom announced the creation of a $500 million Covid-19 Relief Grant for small businesses that have been impacted by covid-19.

$500 Million in Covid-19 Relief Grants for Small Businesses

There will be two rounds of funding, the application period for Round 1 opens on December 30, 2020 at 6:00am and closes on January 8, 2021 at 11:59pm, The dates for Round 2 have yet to be released. Applicants will start receiving notification of approval from January 13, 2021.

Applications are not approved on a first come first served basis, so there is no rush to get an application submitted earlier in the application window. Applications will be reviewed after the application window has closed and scored based on Covid-19 impact factors including the following:

  • Geographic distribution based on Covid-19 health and safety restrictions following California’s blueprint for a Safer Economy and county status and the new Regional Stay At Home Order;
  • Industry sectors most impacted by the pandemic; and
  • Underserved small business groups served by the State supported network of small business centers (i.e., businesses majority owned and run on a daily basis by women, minorities/persons of color, veterans and businesses located in low-to-moderate income and rural communities).

Any applicants from Round 1 will automatically be rolled over into Round 2 for consideration.

Grant Amounts:

The grant amounts range from $5,000 to $25,000, with businesses being eligible based on their annual revenue as documented from their most recent tax return (2019 or 2018 as applicable).

 Eligible Businesses Annual RevenueGrant Amount Available
$1,000 – $100,000$5,000
$100,001 – $1,000,000$15,000
$1,000,001 – $2,500,000$25,000

Eligibility:

This Covid-19 Relief Grant Program is intended to benefit small businesses and non-profits. To be eligible for the relief grant program the entity must satisfy the following criteria:

  1. Must meet the definition of an “eligible small business” i.e. A sole proprietor, independent contractor, C-corporation, S-corporation, limited liability company or partnership that has yearly gross revenue of at least $1,000 but less than $2.5 million.
  2. Active businesses or non-profits in operation 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 documentation as required with the application.
  6. Applicants with multiple business entities, franchises, locations, etc. are not eligible for multiple grants and are required to apply for the business with the highest revenue only.

Ineligible Businesses:

  1. Businesses without a physical location in California.
  2. Nonprofit businesses not registered as either a 501(c)(3) or 501(c)(6).
  3. Government entities other than Native American tribes) or elected official offices.
  4. Businesses primarily engaged in political or lobbying activities (regardless of whether such entities qualify as a 501(c)(3) or 501(c)(6)).
  5. Passive businesses, investment companies and investors who file a Schedule E on their personal tax returns.
  6. Churches and other religious institutions (regardless of whether such entities qualify as a 501(c)(3) or 501(c)(6)).
  7. Financial businesses primarily engaged in the business of lending, such as banks, finance companies and factoring companies.
  8. Businesses engaged in any activity that is illegal under federal, state or local law.
  9. Businesses of a prurient sexual nature, including businesses which present live performances of a prurient sexual nature and businesses which derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
  10. Businesses engaged in any socially undesirable activity or activity that may be considered predatory in nature such as rent-to-own businesses and check cashing businesses.
  11. Businesses that restrict patronage for any reason other than capacity.
  12. Speculative businesses.
  13. Businesses of which any owner of greater than 10% of the equity interest in it (i) has within the prior three-years been convicted of or had a civil judgment rendered against such owner, or has had commenced any form of parole or probation (including probation before judgment), for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state or local) transaction or contract under a public transaction; violation of federal or state anti-trust or procurement statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property, or (ii) is presently indicted for or otherwise criminally or civilly charged by a government entity, (federal, state or local) with commission of any of the offenses enumerated in subparagraph (i) above .
  14. “Affiliated” companies (as such term is defined in 13 C.F.R. § 121.103).
  15. 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.

Required Documents for Application:

  1. Signed Application Certification used to certify the business.
  2. Most recent tax return filed (2019 or 2018 as applicable) to be provided in an electronic format.
  3. Copy of official filing with the California Secretary of State, 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.
  4. Government issued photo ID, such as a driver’s license or passport.

To read more about other California assistance relief programs for small businesses click here.