Many of us remember the Financial Crisis of 2008. BIG businesses and banks received billions of dollars of economic relief from the tax payers for an economic crisis that they created. During this period millions of small businesses went under and millions of American workers lost their jobs. Government was not there to help small businesses…that has changed.
The Senate has unanimously approved a $2 trillion dollar stimulus package and this time they included small businesses! The bill is expected to be passes by the House later this week. Here’s what you need to know if you are a small business or individual…
***I intentionally left out the airlines and other big businesses to focus on who makes America work!***
- One-time direct payments of up to $1,200 for individuals and $2,400 for couples. Couples with children will get an added $500 per child based on 2019 tax returns for those who have filed and 2018 if they have not. Reduced payments for individuals making over $75,000 and couples earning over $150,000. No payments for individuals earning more that $99,000 and couples earning $198,000 or more.
- To help small businesses cover salary, wages, and benefits the government is giving $350 billion in loans.
- Tax credits for retaining employees worth up to 50% of the wages paid during this crisis. Tax credits will also be given to businesses that have suspended operations or have seen gross receipt fall by 50% or more over the previous year.
- For those receiving unemployment benefits, you can expect to add an additional $600 per week for up to four months on top of the current benefits you are receiving from the state.
- Suspended federal student loan payments through September 30th with no accrual of interest on the loans.
- Employers will be able to delay paying payroll taxes by deferring taxes to be paid by end of 2021 and the other half by the end of 2022.
Small Businesses will get help, but how?
The Small Business Administration (SBA) does provide federally backed loans, but if you have been through the process you know how tedious and time consuming the process is. They have not publicly announced how the loans will be given out, when they will be available, or the time frame to pay them back. Some government officials have said there is a possibility that loans will not have to be repaid if businesses don’t layoff workers. That is not official, and we need to wait on the House to pass the bill to see how they are going to treat these loans.
Many are predicting that the banks will help facilitate the loan process. They have the personnel and the knowledge to get the loans out quickly to businesses. If that is the case, businesses should have a commercial bank account setup at a locally or nationally like Bank of America or Wells Fargo.
This is a developing story and more news should be released daily until this crisis is resolved.
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