INFORMATION FOR BUSINESSES AND EMPLOYEES
Last content update: 3/26/2021
Below you will find information on loan programs, tax assistance along with information for employees impacted by either the virus or the order to shelter in place. Note that this situation remains fluid and information about programs is still evolving. These are the known resources available to businesses currently.
The State of California Treasurer’s Office Small Business Resources Page has a great deal of information available for businesses including grants and other programs by County and City.
Business Grant and Loan Programs:
City of Gilroy Small Business Relief Program: Businesses operating within the city limits of Gilroy may qualify for a one-time business relief grant using federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding.
California Rebuilding Fund– 3 or 5-year term loans with a fixed annual interest rate that is currently 4.25%, businesses who employed 50 or less full-time equivalent employees (FTEs) and had gross revenues of less than $2.5 million or below in 2019 are eligible to apply.
Intuit QuickBooks and GoFundMe– Small Business Relief Initiative
Opportunity Fund- Supporting the Resilience of Hard-Working Entrepreneurs
CDC Small Business Finance- Low-interest loan with affordable terms.
Accion- Get access to the resources your business needs to grow: capital, advice, and a community of support.
Lift Fund- Provided over $300 million in small business financing loans to more than 20,000 business owners.
Access + Capital- Their mission is to grow businesses and jobs in underserved communities.
California Treasurers Office- The California Capital Access Program (CalCAP) is a loan loss reserve program supporting small business lending.
Federal Disaster Loans for Businesses, Private Nonprofits, Homeowners, and Renters (Federal Declaration)-Injury SBA Loan.
Information on SBA Economic Injury Loans
What is an SBA-approved Economic Injury Disaster Loan?
If your business or not-for-profit has suffered substantial economic injury in a declared disaster area, you may be eligible to apply for an SBA Economic Injury Disaster Loan. These loans generally offer up to $2 million in assistance to businesses experiencing temporary loss of revenue. The key terms of these loans are:
A 3.75% interest rate for small businesses without credit available elsewhere. (Businesses able to get credit elsewhere are not eligible.)
A 2.75% interest rate for nonprofits.
A maximum 30-year term, determined on a case-by-case basis, based upon each borrower’s ability to repay.
How does a business apply for an Economic Injury Disaster Loan?
A business should be able to apply to the SBA either online or by mail. The applicant must provide substantial financial detail to analyze the applicant’s creditworthiness. You can use the services of a CPA or a technical expert, but the SBA will not pay for these services.
Small Business Development Center SBDC. Gilroy’s SBDC rep is Business Advisor, Mary Castillo Avalos, email@example.com or cell (831) 535-3705. She can help you with an SBA Disaster Loan application.
Free advice can be sourced from local Technical Assistance providers.
Partners available to help prepare loan paperwork include:
What is the maximum loan amount limit?
Disaster loans generally max out at $2 million, but if a business is a major source of employment the SBA has the authority to waive that limit.
What can the loan be used for?
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The loans are not approved to refinance the long-term debts of a business.
What credit requirements does the SBA use to determine the application?
The SBA typically use the following criteria when considering an application:
- An acceptable credit history
- An ability to repay
- Collateral is required for all loans over $25,000
Does the SBA take into account any insurance policy that may be applicable?
Yes. If a business has business interruption insurance, or other relevant claims, then the SBA may reduce the amount of the loan.
What evidence demonstrates economic injury?
Examples can include:
Financial statements from the bank and cash flow statements demonstrating the impact on the business prior to and since the onset of the disaster.
Written evidence of cancelled orders that have a material impact on the cash flow or profitability of the business since the onset of the disaster.
Proof of layoffs or reduced hours for staff as a consequence of a decline in income or cancelled orders.
How long does it take for an Economic Injury Disaster Loan to be approved?
The SBA’s goal is to arrive at a decision on applications within 2-3 weeks.
IRS Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic (Federal Government)
The Secretary of the Treasury has been instructed “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency”. Please read the grant of relief offered to all taxpayers.
Notice 2020-17 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.
The Governor of California issued an executive order that outlines other programs to assist businesses and employees.
Families First Coronavirus Response Act (FFCRA)
Emergency Paid Leave and Expanded Family and Medical Leave: the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor announced that private small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act. Employers are encouraged to visit the U.S. Department of Labor website and IRS website for additional information on purpose, qualification, and frequently asked questions. (Currently not applicable to State and local governmental units).
2019 California tax returns (State of California)
This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes:
Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.
Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.
Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.
The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period. For more information visit: https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-2-more-time-to-file-pay-for-california-taxpayers-affected-by-the-covid-19-pandemic.html
Payroll (State of California)
Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return. For questions, employers may call the EDD Taxpayer Assistance Center toll-free from the U.S. or Canada: 1-888-745-3886.
Workshare Program (State of California)
Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.
The Work Sharing Program helps employees whose hours and wages have been reduced:
- Receive UI benefits.
- Keep their current job.
- Avoid financial hardships
More details and forms are available at: https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm
Sales Tax (State of California)
California Department of Tax and Fee Administration (CDTFA) has the authority to assist individuals and businesses impacted by complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19. This assistance includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund.
For more information please contact CDTFA: https://www.cdtfa.ca.gov/services/covid19.htm
Santa Clara County Property Tax
County Department of Tax and Collections understands and shares the public’s anxiety and concern about the impacts of the COVID-19 pandemic. While we cannot change the April 10 deadline for the Second Installment of Property Taxes because critical county services, schools, and local financial obligations are dependent on those scheduled revenues, we can waive penalties, costs, or other charges resulting from tax delinquency due to reasonable cause and circumstances related to this crisis.
Property owners can take advantage of the partial payment program and make multiple partial payments on the installment due.
Pacific Gas & Electric
PG&E has made service modifications for Impacted Customers.
Suspended service disconnections for non-payment and waive new service deposit requirements for residential and small business;
Implemented flexible payment plan options; and
Provided additional support for low-income and medical baseline customers.
If a customer is experiencing financial hardships and has trouble paying their bill due to the economic impact of COVID-19, they can help. Please call PG&E at 1-800-743-5000.
RELATED TO EMPLOYEES (FOR EMPLOYERS)
Employers can receive payroll tax relief for providing employees with up to 80 hours for paid sick leave for those unable to come to work due to COVID-19 illness. Employers are compensated through reduced payroll tax payments. In addition, compensation is available to allow employees to take care of a family member or their child due to school closure. Additional information about the caps on compensation amounts, the duration of additional leave, and potential for small business exemptions is available through the Department of Labor www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave.
Many providers of telework applications including local companies Cisco and Zoom are offering free or discounted access to their products which can be accessed through Open For Business. The State human resources website and Federal human resources website may provide good insights into the benefits and limitations of allowing employees to keep productive if they are unable to go to the job site.
The County of Santa Clara adopted an Eviction Moratorium that expired on August 31, 2020 when the State Eviction Moratorium took effect. For small business tenants who qualify for protection under the County’s ordinance, the County’s eviction moratorium has been extended through March 31, 2021. Small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent. Civil fines and penalties, monetary damages and injunctive relief may be imposed on landlords who seek to retaliate or deny small business tenants of their rights and protections under the ordinance.
If you are a small business tenant, you can use this form to provide your landlord with documentation of substantial income loss and/or substantial out-of-pocket medical expenses that is directly related to your failure to pay rent as a result of the COVID-19 pandemic as soon as possible.
For more information for small businesses and landords, please click here.