RANCHO CORDOVA, CA (MPG) - Assemblyman Ken Cooley (D-Rancho Cordova) announced that his Assembly Bill 820, which aims to spur lending to small businesses especially hit hard by the COVID-19 pandemic by allowing qualified lenders to receive a tax credit for loans distributed during this trying time, has passed the Assembly Committee on Revenue and Taxation with bipartisan support.

The 2019 COVID-19 Pandemic response upended the daily lives of all Californians. In an attempt to limit the spread of the virus, mandatory shutdowns were put in place. As the pandemic worsened and the shutdowns continued, the costs of operating a business without continued revenue became burdensome for many of California’s small businesses.

“During the pandemic public investment was offered from the federal and state governments but not nearly enough small businesses applied and received relief. It is clear that the demand for capital and financial assistance exceeds available public resources,” Cooley said. “It’s vital that we do everything we can to keep these businesses afloat in these trying times. They are the economic engine that will spur our recovery.”

AB 820 provides banks additional incentives to lend to small businesses by excluding the qualified interest income from calculation of the sales factor for taxable years starting January 1, 2022 and before January 1, 2027. These loans must be one million dollars or less issued to a qualified business on or after March 15, 2020, but prior to January 1, 2025. A qualified small business must have 50 or fewer full-time employees and demonstrated and annual loss in net income of 10% or more from 2020 to 2021. These definitions help to ensure that the aid is properly funneled towards supporting businesses that have struggled in the immediate throws of the pandemic.

AB 820 now moves to the Assembly Committee on Appropriations.

Assemblyman Ken Cooley represents the 8^th Assembly District which includes the communities of Arden-Arcade, Carmichael, Citrus Heights, Rancho Cordova, Rancho Murieta, Rosemont, Wilton and other portions of unincorporated Sacramento County. For more information, please visit http://asmdc.org/members/a08/