The 2024 federal tax season has reached its end…  well, unless you joined the other 19 million taxpayers and filed for an extension. 

That’s something we anticipate every year here at Sawyer Accounting & Tax. And we’ll be working away the next few months on the extensions we filed for our Orange County clients… albeit after a little rest from our round-the-clock filing labors. And I’m proud to say my team worked their tails off to serve you this year.

I’m not the only one proud of their tax season work. The IRS is too… and I have to say, the beefed-up efforts in Washington, thanks to increased funding, worked in our favor too. This was one of the most uneventful tax seasons in the last five years.

And as I think on that, I’m also moved with gratitude for the opportunity to serve clients like you. Trusting your business’s financial details and your tax burden in our hands to work on your behalf is something I don’t take for granted.

Trust is in short supply these days.

And that makes me keenly aware of the gravity of you giving us yours. Thank you for choosing Sawyer Accounting & Tax for your tax and accounting needs.

And just because tax season’s at an end, doesn’t mean we won’t continue to labor on your behalf. One way we’ll keep looking out for you is by delivering these weekly conversations on topics that affect you and your business.

For example, I shared with you recently about some new small business loan requirements that are coming to a local bank near you (pending litigation). The verdict on whether this will make getting a business loan more difficult, in the short-term or long-term, is yet to be seen.

So in the name of keeping you informed about what’s coming, here’s a brief on why these changes are happening and what it means for your La Habra business…

CFPB Small Business Loan Requirements & Your Orange County Biz
“There are known knowns, there are known unknowns, and there are unknown unknowns.” – Donald Rumsfeld

The new small business loan requirements for lenders which have been mandated by the Consumer Financial Protection Bureau (CFPB) are supposed to go into effect later this year (October to be specific). But the controversy and litigation surrounding the new rule has put compliance and enforcement on hold. 

Why all the fuss? 

Well, let’s start first with what exactly is being asked of lenders.

Section 1071 of the Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that lenders begin gathering additional information on small business loan applications, including:

• Geographic location
• Demographics (business ownership – race, gender)
• Loan details (amount, type, terms)
• Lending decisions (approved, denied, withdrawn)
• Price of credit

Implementation of these small business loan requirements will be phased in for lenders, with larger lenders required to collect and report data earlier (October 2o24) then the smaller lenders (January 2026).

The intention here, purportedly, is to provide a more comprehensive view of small business lending to the public, with the main intent being to make sure lenders are serving small businesses “fairly.”

There is currently very limited data on small business entrepreneurs’ access to credit, and this is the government’s attempt to combat unlawful discrimination in who gets access to those loans (and the better terms available).

Of course combatting discrimination in lending is a good thing, especially if it makes it easier for businesses like yours to get loans. But some argue that these new rules may actually do the reverse, saying it could slow down and make it harder to get small business loan approvals.

Small Business & Entrepreneurship Council president and CEO Karen Kerrigan said it would “bury small businesses and financial institutions with costly and time-consuming paperwork.”

That remains to be seen. So unless the rule survives litigation, nothing will officially be changing – yet – when it comes to meeting small business loan requirements during your application process.

But since there is a larger trend toward greater regulatory scrutiny over commercial lending, the likelihood is that 

Our hope is that they can make the data collection process painless for business owners like you and that the long-term result is that financing your business becomes more accessible. 

Knowing the government like I (we) do, I have my doubts about that, but time will tell.

Should this pending rule impact your decisions about timing the financing of your next business investment? I’m happy to sit down with you to look at your current financials to help you time things according to the most accurate projections we can make.

Please feel free to reach out to us through your account or leave a voicemail, and our team will respond and get back to you.

Looking out for your best interests,

Raymond Sawyer