There has been much hype about the small business bill, but little actual fact reporting as to what this legislative action offers American small business people. Here are a few of the features of this much publicized bill as well as how they may help or hurt people just like you.
- Increase in Small Business Administration Lending Programs. This will make it easier for small business owners to get an SBA loan, which can be difficult. Owners will also have the option of obtaining an SBA loan to pay off other debt, which may keep floundering small businesses alive.
- Small Business Lending Fund. This offers a financial incentive for small banks to increase the amount of money they lend to small businesses. You likely won’t get any of this money, but it will encourage banks to lend to you. This indirectly may increase investment in businesses like yours.
- New Tax Incentives. New business expense dedications will triple in the next two years so small business owners can recoup some of their start up expenses. Further, investments in small business will be exempt from capital gains tax, encouraging larger corporations to get behind this vital part of the US economy.
- More Deductions. You will be able to write off large capital expenditures such as property all at once instead of over a period of years. Business owners can also deduct health insurance costs right off the top. However, you will have to file a 1099 for every supplier that receives more than $600 from you.
- Global Export Support. If you are thinking about taking part of your operations overseas, this will help out. New positions will be opened in government agencies that help businesses deal with foreign exports, such as the Office of the US Trade Representative. A new grant program will help small businesses begin trading on a global scale. While many people have criticized this provision as encouraging outsourcing, its true effects remain to be seen.
- State Small Business Credit Initiative. If you need a loan and this loan would create new jobs, you may be able to get preferential loans. This is expected to create more jobs in small businesses and in manufacturing.
- Increased tax penalties for small business owners. Someone has to pay for all these perks, and in this case it may be the owners who don’t get their taxes complete on time. Penalties will be doubled and calendar year penalties will be almost quadrupled. Because this bill will increase the number of documents to be filed, this may pose a burden for owners who fall behind.
Although the bill has little Republican support, it nonetheless has the support of several business and trade groups. Like many pieces of legislation, the language is complicated enough that it may be years before we can accurately see exactly how the bill affects small business owners who are struggling to make ends meet in this difficult economy.