In addition to the relief provided to nonprofits by the Federal Government, discussed in more detail on our COVID-19 resources webpage and in earlier blogs, Governor Gavin Newsom has unveiled new resources to help small businesses, including nonprofits, in California.
Loan Guarantees for California Nonprofits
California is allocating $50 million for loan guarantees to small businesses and nonprofits that do not qualify for federal loans. The loan guarantee program assists nonprofits with obtaining loans to use for business continuance expenses or to cure economic injury resulting from the COVID-19 pandemic. The Small Business Finance Center will administer the program to qualifying small businesses.
To qualify for this loan guarantee program, a nonprofit organization must:
- Be located in California,
- Have between 1 and 750 employees, and
- Experience disruptions as a result of or be negatively impacted by, COVID-19.
If your nonprofit organization would like to apply for a loan, reach out to a participating lender and submit their application. Additionally, the IBank Small Business Finance Center website has resources to help organizations with the applications.
If your organization qualifies for the loan, the California Infrastructure and Economic Bank will guarantee the loan for up to 7 years. The guarantee will cover up to 95% of the loan balance. Each individual lender will determine interest rates and qualifications.
Sales Tax Extensions Available to California Nonprofits
California nonprofit organizations that are required to file sales tax returns automatically have an additional 3 months, beyond the original return due date, to file with the California Department of Tax and Fee Administration (CDTFA) for returns due before July 31, 2020. For example, the first quarter Sales and Use Tax return for 2020, originally due on April 30, 2020, will now be due on July 31, 2020.
Additionally, nonprofits have an additional 3 months to make sales and use tax deposits, beyond the original deposit due date, for deposits due before July 31, 2020. Nonprofits can also take advantage of a 12-month, interest and penalty-free payment plan for up to $50,000 of sales and use tax liability. For a full list of due dates, visit the CDTFA website.
For additional information regarding COVID-19 resources available to nonprofit organizations, please see our previous blog posts on relief available to nonprofit employers and federal loan programs that nonprofits are eligible for. The Law Firm for Non-Profits is here to assist you if you have any questions about resources available to your organization.