Trade Groups Unite for EBITDA Standard

By Staff Writer June 18, 2021

The National Association of Manufacturers, the U.S. Chamber of Commerce and the American Investment Council recently launched the Coalition for America’s Interest, to unite trade groups in support of Congress to extend the current EBITDA (earnings before interest, taxes, depreciation, and amortization) standard.

This allows businesses to continue to access capital and have flexibility to meet their business needs, ensuring businesses have the flexibility and access to capital they need to remain competitive, continue adding jobs, and navigate the current economic and health crisis. 

 Under current law, the maximum deduction for interest on business loans is limited to 30 percent of EBITDA, a common financial accounting metric used to evaluate a business’s economic strength and ability to service debt. This standard will become far more restrictive in 2022, dramatically increasing the tax liability and financing costs for many capital-intensive businesses. This change will make it difficult for these businesses to raise capital for investment, while constraining their operating budgets and their ability to hire and keep workers – ultimately threatening small businesses, jobs and economic growth.

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Last modified on Saturday, 19 June 2021 14:20