After Gov. Gavin Newsom announced last week the availability of financial assistance for businesses suffering from COVID-19 restrictions, he subsequently issued regional stay at home orders that include requiring Californians to stay at home as much as possible and that closes certain sectors of business.
“We believe the assistance was just a strategic means of softening the blow for what was to come the following day,” said John Kabateck, California state director for NFIB. “We do appreciate and welcome any relief, financial or otherwise, that will get small businesses the help and support they desperately need right now. We just wonder if it's too little too late for so many of them that have already been forced to close their doors.”
Some 4.1 million small businesses represent 99.8% of all businesses statewide, which employ 7.2 million workers or half the workforce throughout California, according to a statement online issued by Gov. Newsom’s office.
“These shutdowns could not come at a more difficult and horrible time,” Kabateck said. “It couldn't be more horrible timing for small businesses that were desperately depending on the heavy rush of the holiday retail season to make up for the massive deficit they faced these past nine months.”
Below are details on three new financial initiatives targeting small business owners..
A total of $12.5 million in low-interest loans to small businesses are available through the California Rebuilding Fund based on recommendations from the Governor's Task Force on Business and Jobs Recovery.
“We still believe that is an extremely small amount of money for small businesses needing to rebuild but for those who are slipping through the cracks and need that kind of help, we will never criticize any extra dollars that can help a small business capitalize and grow during these difficult times,” Kabateck said.
A $500 million COVID Relief Grant will be distributed to small businesses that are struggling from health and safety restrictions implemented as a result of the coronavirus but grants are limited to $25,000.
“Half a billion dollars is no chump change but we know that it can go quickly,” Kabateck said. “It does provide grant relief of up to $25,000, which as we have seen, can disappear very quickly during a crisis but twenty-five thousand dollars in free money to those who desperately need it to survive is welcome.”
An automatic three-month income tax delay for taxpayers filing less than 1 million in sales tax, which extends the availability of existing interest and penalty free payment agreements to companies with up to 5 million in taxable sales.
The measure is expected to widen opportunities so that businesses can opt for interest-free payment arrangements.
“Any life preserver that is thrown to a small business owner is not unwelcome but payment deferrals and extensions on sales taxes only have value when businesses are selling and businesses aren't selling much right now,” Kabateck said. “So, the sales tax help is appreciated, but more importantly, we need to get businesses selling again so they can take advantage of this even more.”