SACRAMENTO, Calif. (CN) --- California Governor Gavin Newsom on Thursday announced an expansion of the state's initiative to help hard-hit small businesses weather the financial storm from the Covid-19 pandemic as it seeks to reopen its economy in June.
California will offer $4 billion in business grants and put forward more than $6 billion in tax incentives. The relief measures are a component of a wider $100 billion initiative called the California Comeback Plan, which aims to put the state’s economy back on level ground during the recovery from the pandemic-induced recession.
The Golden State’s grant initiative provides up to $25,000 to small businesses negatively impacted during the pandemic.
Thursday's announcement adds another $1.5 billion from the state to a program that will reach a combined $4 billion once federal relief funds are allocated to the state.
The state will also provide more than $6 billion in tax incentives for the hardest hit small businesses. That initiative can deduct up to $150,000 in loans provided to businesses through the federal Paycheck Protection Plan. California received more than $97 billion in PPP loans, at an average of $96,000 per loan, and about $26 billion in other relief funding, according to federal data.
Newsom said in a statement Thursday the relief package is an investment in the state’s economic health and the largest such initiative in the nation.
“Our small businesses have faced unprecedented challenges over the past year, and we’re stepping up to meet the moment --- making historic investments to provide businesses with the support they need and jumpstarting California’s economic recovery,” Newsom said. “That’s why we’re implementing the largest small business relief program in the entire country, expanding the small business grant program to $4 billion and providing $6.2 billion in small business tax relief. This is money in the pockets of business owners to make payroll and cover the bills as we prepare to fully reopen California’s economy on June 15.”
State officials have said more than 88% of grants in the first two rounds of fundings have gone to businesses owned by women, people of color, veterans and businesses in impoverished communities.
About $475 million in grant funding has already been doled out to 198,000 small businesses and nonprofit organizations across all of California’s 58 counties, according to state data. More than 350,000 businesses have applied for relief with the state.
In other relief measures for businesses, the state has suspended alcohol and cosmetology licensing fees for the next two years. Hair salons, barbers, bars and breweries were among the hardest hit businesses as public health guidelines forced them to close during the worst phases of the pandemic.
Newsom has spearheaded the state’s $10 billion relief effort, which includes a “Golden State Stimulus” of $600 direct payments for some residents.
The governor recently announced a more than $75 billion state budget surplus in a period where he’s facing a recall election driven largely by groups who criticize his handling of the pandemic response.
In March 2020, California ordered all 40 million of its residents to stay home under a statewide public health order. More than 3.6 million residents have contracted the novel coronavirus and at least 61,350 have died from the disease.
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