Hours after President Donald Trump signed a new COVID-19 stimulus package on Sunday night, Brock Blake began to see a wave of new interest in Paycheck Protection Program loans.
“There’s definitely an appetite,” says the CEO of Lendio, a broker with small business loans that matches companies with lenders. “Small business owners are in a very difficult place.”
As the U.S. Department of Treasury and Small Business Administration works out the details on how to get more aid money out there, Blake hopes they will take time to get it right.
“I realize that every day right now is critical, with business owners needing capital,” Blake said. ‘But the last few days it was such a disaster that no one knew what they were doing, and there was very little guidance. … I hope that now that we have all been through it once, we have had some important doctrines, and I hope that they will portray all the guidance straight and forward, even if it takes a few extra days. ”
With the end of 2020 on hand, timing remains a major question over the $ 900 billion stimulus package, which will offer many Americans $ 600 checks and $ 284 billion in small business loans.
The law stipulates that the treasury distributes the funds as quickly as possible. In the case of payments of $ 600, this means no later than January 15th. Those who have signed up for direct deposits from the Internal Revenue Service can see it in the next week; those who received it by mail the last time will have to wait a little longer. (The IRS created a tool to sign up for direct deposit this spring, but it’s currently up for maintenance because the office is preparing for the rush of payments.)
Those who do not receive a payment, but believe that they were entitled to it, will be able to claim a “rebate on recovery” on their upcoming 1040 tax forms. This applies to both the payments from last spring ($ 1,200 per person, $ 2,400 per couple, plus dependents) and the new payments ($ 600 per person, $ 1,200 per couple, plus dependents).
For loans to protect the Paycheck program, the Small Business Administration has ten days from Trump’s signing to create and explain new clues and applications. It would be about January 6th.
According to Blake, Lendio is already collecting applications for first lenders and expects the first money to drip around January 10th. Those who want a “second draw” loan will have to wait even longer. Either way, companies will have to incorporate new federal requirements, including proof that their business has declined by at least 25 percent by one quarter from 2019 to the same quarter in 2020.
“Although we are collecting the applications, we are not yet submitting them to the SBA for approval,” Blake said. “We gather them and stand in line, and as soon as they give us the green light, we will hand it in.”
The new law also extends to 2021 with some time-sensitive provisions of the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act.
The CARES Act, for example, increased the limit on allowable tax deductions for charitable taxes during 2020, giving people the ability to deduct donations worth 100 percent of their adjusted gross income (compared to 60 percent in previous years). It also allowed non-itemizers to deduct up to $ 300 per person, a rule that did not exist before. Both rules have now been extended to 2021, which means that people who give before New Year and beyond must be able to claim these deductions this year and next.
“A lot of people do need $ 600, but there are a lot of people who don’t necessarily need it,” said Lutz financial planner Chuck Lewandowski. “Now, if you are charitable, you can use the money to get a deduction at the top of your tax returns.”
Even before the new incentive package, numerous charities paid dividends. American Stage Theater Company in St. Petersburg has tripled the number of charitable donors from 2019 to 2020, in part due to the provision of the CARES Act, artistic director Stephanie Gularte said.
“We are seeing significant increases compared to last year’s give,” Gularte said. “A lot of people want to give within the tax year.”