Help for small businesses could arrive before Christmas


Lawmakers made encouraging progress in the race for approval on Wednesday a new round of coronavirus relief by the Dec. 18 deadline on federal spending.

Leaders from both sides continued to negotiate on Wednesday, working on a new framework for additional Covid-19 stimulus funding, which includes payments to individuals, unemployment assistance and renewed funding for struggling small businesses facing further blockages and an increase in Covid-19 cases. Two sticking points – state and local aid funding, which Republicans opposed, and additional corporate liability protections, which Democrats opposed – were dropped, leaving one package less $ 900 billion.

The leaders of the United States House and Senate must submit any agreement to their grassroots members for approval. Senator Bernie Sanders (I-VT), for example, had pushed for another round of economic impact payments of $ 1,200 to individuals. The latest reports show the amount would drop to $ 600 for “working class” individuals and their children, which Sanders seemed to approve of, over the course of an interview on MSNBC earlier Wednesday. “For a family of four, that would cost around $ 2,400, which I think will be very good news during this rather gloomy Christmas season,” Sanders said. It is not clear whether there will be a cap on total expenditure per household or whether there will be income limits for eligible beneficiaries. The latest deal would also provide $ 300 a week in improved unemployment benefits, which is half of what the Cares Act provided, but a better cushion than the paltry sum that many states are now able to muster.

As for small business owners, the prospect of a new round of Paycheque Protection Program The financing (PPP) is very good. The repayable loan program is on track to reach around $ 300 billion, which includes the remaining $ 138 billion from the Cares Act. This money is expected to be widely available for first-time PPP borrowers, as well as for previous recipients who suffered significant income losses from the pandemic and the resulting business closings.

If the last bill passed the legislative language that the “problem solvers caucus” presented on Monday, the relief for small businesses doesn’t end there. The Small Business Administration Flagship 7 (a) Loan Program could see the maximum loan amount increased to $ 10 million. In addition, fees would decrease and guarantees would increase to 90% of the loan value, compared to the 75% and 85% currently offered under the program. This bill also calls for the maintenance of the SBA’s Economic Disaster Lending Program (EIDL), due to the December 31 extinction, as well as an additional $ 13.5 billion for EIDL advances, which were exhausted in July.

The biggest problem for many existing borrowers will be the new forgiveness protocols, which would be significantly relaxed for smaller debtors. Those with loans of less than $ 150,000 would be asked to submit a new (upcoming) one-page forgiveness form with their lender. Borrowers would not be required to present the supporting documents or certificates described above for loans less than $ 150,000.

And accountants around the world will applaud the clarity offered by this bill, which quells numerous complaints from borrowers about the opacity of tax deductibility of canceled PPP loans. Although PPP money does not count as taxable income, the Internal Revenue Service had declared that any expense paid for the use of canceled PPP funds cannot be considered a tax deductible expense. Instead, this bill states that PPP expenses are deductible, as was the original intent of the Cares Act, says Bill Smith, general manager of the CBIZ MHM national tax office in Bethesda, Md. . In other words, this means that you can now enjoy the deductions that you are used to whether or not you have used remitted funds. “You will have the double benefit,” adds Smith.

What is the next step in the legislative calendar? Karen Kerrigan, chair of the Small Business & Entrepreneurship Council, a non-partisan advocacy group in Vienna, Virginia, says the likely scenario is that an amendment will be proposed in the House to add the Covid-19 relief plan to the draft. government spending law to be passed. Which could mean everything gets to the president by Friday.

After that, it’s unclear exactly when these aid programs will resume, Kerrigan says. She notes that program changes may require additional rules, guidance, and possibly internal process adjustments at the lenders themselves. The timing, just before the Christmas holidays, could also delay things or mean lenders and government workers will be working hard during the holidays.

Either way, it’s hard to overstate the importance of injecting additional stimulus into the economy. More than 70 percent of small businesses recently surveyed by the US Chamber of Commerce said they need more government help to be successful in 2021. Half of those polled said under current conditions they could continue to operate for a year or less before closing.


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