Hello! Hope you all are getting some time to enjoy fun summer activities.
There are a handful of tax deadlines the second half of this month. And at the end of this email I am including a lengthy article about SBA(7) loans.
Please be sure to contact me if you have questions about services I can provide from Motsinger Tax and Accounting, LLC. And be sure to let me know if the content we provide in these monthly newsletters are helpful or if you have any other feedback!
Ubuntu!
Angela
News
Governor Kelly Breaks Ground on De Soto Road Project Near Panasonic
DE SOTO – Governor Laura Kelly today joined U.S. Senator Jerry Moran, U.S. Representative Sharice Davids, and other state, local, and private sector leaders for a groundbreaking ceremony to kick off construction of the De Soto Local Road Improvement Project.
The Kansas Department of Transportation’s (KDOT) 4.5-mile street improvement project will support the $4 billion, 4,000-job Panasonic Energy electric vehicle battery manufacturing facility currently under construction. The project, which represents the largest private investment in Kansas history, was announced last July. Read more (links to PDF).
Governor Appoints Calvin Reed as Secretary of Transportation
TOPEKA – Governor Laura Kelly today announced that she has appointed Calvin Reed as Secretary of the Kansas Department of Transportation (KDOT). Reed has served as acting secretary since the departure of former Secretary of Transportation Julie Lorenz in December 2022. Read more (links to PDF).
Small Business Weekly Forecast
The Latest Forecast: Weather for small business is a sunny, but remarkably unpleasant. It is humid, hot, and sticky with storm clouds on the horizon.
What it means: Small businesses are doing well, especially with wage hikes calming down. That sunny forecast is made unpleasantly humid, hot, and sticky due to high inflation, continued worker shortages, and expected interest rate hikes. Read more.
Can the Construction Industry Be Disrupted?
In 1910, the French artist Villemard created a series of illustrations imagining life in the year 2000. In one of his drawings, an architect sits in a booth pushing buttons on a console to manipulate a series of machines operating in the usual debris of a construction site. The various machines cut, shape, lift, and place stone blocks to build a house. There are no human laborers in his projection — mechanization has made them obsolete.
Villemard’s vision has not panned out, however. On the contrary, industry observers routinely deride the lack of technological sophistication in the construction industry, and have pigeon-holed it as old-fashioned and lagging behind more forward-looking and purposeful industries such as manufacturing.
This story has been told and told again. In the wake of the post-WWII housing boom, the editors of Fortune published a 1947 article titled “The Industry Capitalism Forgot,” in which they mocked homebuilding’s “feudal character” and “picayune scale.” In 2006, MIT Professor John Fernandez summed up the conventional wisdom when he wrote: “It is widely believed that construction is the slowest of all industries of such scale in implementing proven, scientifically sound technological innovation.” A decade later, McKinsey consultants continued the drumbeat, blaming limited productivity improvements on “poor project management and execution … underinvestment in skills development, R&D, and innovation.” In early 2023, University of Chicago economists Austan Goolsbee and Chad Syverson published an article titled “The Strange and Awful Path of Productivity in the U.S. Construction Sector” in which they concluded that aggregate data “demonstrate a large and decades-long decline in construction sector productivity.” Read more.
July 2023 Business Due Dates
July 17 – Non-payroll Withholding
If the monthly deposit rule applies, deposit the tax for payments in June.
July 17 – Social Security, Medicare and Withheld Income Tax
If the monthly deposit rule applies, deposit the tax for payments in June.
July 31 – Self-Employed Individuals with Pension Plans
If you have a pension or profit-sharing plan, this is the final due date for filing Form 5500 or 5500-EZ for calendar year 2022.
July 31 – Social Security, Medicare and Withheld Income Tax
File Form 941 for the second quarter of 2023. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until August 10 to file the return.
July 31 – Federal Unemployment Tax
Deposit the tax owed through June if more than $500.
July 31 – All Employers
If you maintain an employee benefit plan, such as a pension, profit-sharing, or stock bonus plan, file Form 5500 or 5500-EZ for calendar year 2022. If you use a fiscal year as your plan year, file the form by the last day of the seventh month after the plan year ends.
Weekends & Holidays
If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday.
Is an SBA (7) Loan Right for Your Business?
It’s safe to say that the millions upon millions of small and mid-sized businesses operating right now are the true foundation of the United States economy. But whether you’re a seasoned veteran or are a new entrepreneur looking to journey out on your own for the first time, it’s important to understand the options that are available for you in terms of funding and how to take advantage of them.
One of those is called the SBA (7) loan, which is a flexible form of business funding that is worth a closer look.
What is an SBA (7) Loan?
The SBA (7) loan program was designed to offer small businesses access to low-interest loans that can be used for a number of different things. They are fully backed by the United States Small Business Administration, hence the name.
That money can be used as working capital, it can help purchase new equipment that you need to continue to manufacture your products, or it can even go towards real estate. Under the SBA (7) loan program, funds are available up to $5 million to qualifying businesses.
How Do I Qualify?
To qualify for an SBA (7) loan, an organization must meet all the following requirements:
- The person applying for the loan (meaning the business owner) must have “reasonable invested equity” in the business itself.
- They must also have attempted to find alternative financial sources prior to applying, with the use of personal assets being a chief example.
- They need to be able to demonstrate a legitimate need for the loan funds. This can’t be a loan that you take out because you want it – it needs to be a true requirement to continue your operations.
- You need to play to use the loan for a sound business purpose.
- If you have any existing debt to the United States government, you cannot be late on those obligations in any way.
As you begin this process, you should first contact your preferred bank to see if it is qualified to give out SBA (7) loans. If it isn’t, don’t worry – the Small Business Administration has a helpful Lender Match tool that you can use to find one that meets your needs.
Additional Considerations About the SBA (7) Loan
Another common question that people have when it comes to an SBA (7) loan has to do with the total amount of time they have to pay back any money that is borrowed. Generally speaking, this will be based almost entirely on how you plan on using the money.
If you’re planning on using it to purchase real estate (like if you want to expand your business to include a new location), for example, the maximum term is up to 25 years. If that money is going to purchase equipment or towards inventory-related purposes, on the other hand, the maximum loan term is 10 years.
Finally, it’s important to understand what an SBA (7) loan is and how it functions from the point of view of a lender. Loans are partially guaranteed by the Small Business Administration up to 90%, although this will vary significantly depending on the type of loan you take out.
- A standard SBA (7) loan comes with a maximum loan amount of $5 million. Here, the SBA will guarantee 85% of the loan if the amount you’re borrowing is up to $150,000. For loans that are more than $150,000, the SBA will guarantee 75% of that amount.
- An SBA (7) “small loan,” on the other hand, has a maximum amount of $350,000. Here, the SBA will guarantee 50% regardless of the amount of money you’re taking out.
- If you take out an SBA (7) “express loan,” you get access to a maximum loan amount of $500,000. The SBA will guarantee 90% for loans up to $350,000 in value and 75% for all loans between $350,000 and a maximum of $500,000.
The major benefit of the program is that interest rates are capped by the SBA and the program also offers longer loan terms than a lot of alternative options. The application process can be time-consuming, and approval times are also long, however, so depending on how much you need and how quickly you need access to it, you may want to explore other options first if possible.
In the end, the SBA (7) loan can be an invaluable resource for small-to-medium-sized businesses everywhere. Having said that, it may not be right for everyone. Just because that may be true doesn’t mean that there aren’t still options available for you to peruse. So if you’d like to find out more information about the ins and outs of an SBA (7) loan, or if you’d like to discuss other financing options with a professional in a bit more detail, please don’t delay – contact us today.
