As the economic impact due to the coronavirus pandemic continues to be felt across California, Gov. Gavin Newsom announced a financial relief package for small businesses, as well as those who have lost work, during a news conference Thursday.
Three weeks ago, applications for unemployment insurance began to skyrocket in California with 1.9 million having filed in that time, while there has been an average of 111,000 claims filed daily over the last week, according to Newsom.
“The economic consequences are profound,” he said, adding there have already been a number of steps taken to assist those affected. “We will not be the beneficiary of that help unless we are aware of what it is exactly that has been provided and how we can access those supports.”
Newsom announced the state is allowing small businesses with less than $5 million in taxable sales to defer payment of sales and use taxes of up to $50,000 without fine or penalty for up to 12 months.
“In essence, it is a bridge loan,” he said. “The money that you’ve already collected, you will not have to pay the state for 12 months no penalties, no interest.”
This comes after Newsom signed an executive order earlier this week granting small businesses a 90-day extension to file returns and pay taxes, which is available to any businesses filing a return for less than $1 million in tax.
“The reality, though, is not everyone can take advantage of these programs,” he added.
Consequently, Newsom also announced that California is allocating $50 million to the California Infrastructure and Economic Development Bank for loan guarantees to create micro-lending opportunities for businesses that might not otherwise be eligible for relief via the federal funds that have been allocated.
For those who are out of work, Newsom announced that the state has partnered with Bitwise Industries and the Kapor Center to launch OnwardCA.org, which connects displaced workers with more than 70,000 job opportunities in critical industries, as well as other resources.
Beginning Friday, small businesses impacted by the COVID-19 crisis can apply for a loan from the federal government for up to $10 million as part of the $2.2 trillion financial relief package President Trump signed into law last week, called the Coronavirus Aid, Relief and Security, or CARES Act.
This is offered to small businesses that commit to keeping their employees and continue to pay them through the crisis.