California has announced a new relief grant program for small businesses affected by the COVID-19 pandemic. The program provides micro grants ranging from $5,000 to $25,000 to eligible small businesses (including independent contractors and sole proprietors) impacted by COVID-19 and the related health and safety restrictions. The grant amount will be based on the business’s annual revenue as documented in its most recent tax return:

• For annual revenue of $1,000 to $100,000, the available grant amount is $5,000.
• For annual revenue of greater than $100,000 up to $1,000,000, the available grant amount is $15,000.
• For annual revenue of greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000.

Please keep in mind that even if you meet all eligibility requirements, it is not guaranteed you will receive a grant.

Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. The list of partners, organized by location and by language services, can be found here.

The first round for applications opens on December 30, 2020, at 8 a.m. and closes on January 13, 2021, at 11:59 p.m. Approval notifications will begin on January 15, 2021. There will be a second round for application submissions and reviews, although the dates for that round have not yet been announced. Applicants who submit their application and submit all documentation in the first round should not reapply, since one complete application qualifies an applicant to be considered for both rounds.

A small business must satisfy the following criteria to be eligible to receive a grant award:

• Must be a sole proprietor, independent contractor, or registered “for-profit” business entity (e.g., C-corporation, S-corporation, limited liability company, partnership) that has yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on the most recently filed tax return.
• Must be an active business operating since at least June 1, 2019.
• Must currently be operating or have a clear plan to re-open once the State of California permits re-opening of the 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.
• Must be able to provide organizing documents including 2018 or 2019 tax returns or Form 990s, copy of official filing with the California Secretary of State, if applicable, 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.
• Must be able to provide acceptable form of government-issued photo ID.
• Applicants with 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.

Applications will be reviewed to determine whether the applicant meets the eligibility requirements. Eligible businesses will then be scored based on COVID-19 impact factors incorporated into the program’s priority criteria, 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). 

See the grant California Small Business COVID-19 Relief Grant Program website for more information.