Daniel P. Hannaher, Published November 07 2010
Jobs act offers tax reliefOn Sept. 27, President Barack Obama signed into law the Small Business Jobs Act, the most significant piece of small-business legislation in more than a decade. The law provides entrepreneurs and small-business owners with greater access to capital and more tax relief, so they can grow and create the jobs America needs.
First, too many small businesses still have trouble finding credit.
Already, enhancements first made under the Recovery Act to Small Business Administration loans – waived fees for borrowers and increased guarantees for our lending partners – dramatically increased SBA loan volume at a time when credit was frozen. They turned just $680 million in taxpayer dollars into nearly $30 billion in lending support to nearly 70,000 small businesses.
The Jobs Act extends those two successful enhancements and will support an estimated $14 billion in loans to small businesses.
The law also permanently increases the maximum size in SBA’s top two loan programs – 7(a) and 504 – from $2 million to $5 million, while increasing our microloans from $35,000 to $50,000. And, on a temporary basis, the law will increase the maximum size of our quick-turnaround Express loans to $1 million, and also allow some small businesses to refinance their commercial real estate into our 504 program.
Furthermore, a new Small Business Lending Fund – administered by the Treasury Department – will provide community banks with the capital they need (up to $30 billion overall) to increase lending to small businesses beyond their 2009 levels.
The second overall benefit for small businesses in the Jobs Act is eight new tax cuts totaling $12 billion.
This includes: higher deductions for investing in new machines and equipment, zero capital gains for those who buy and hold small-business stocks for five years, and a doubling of the maximum deduction for startups to $10,000. It also allows self-employed Americans to completely deduct health insurance costs for themselves and their families.
In addition, beyond the tax relief and increased access to capital, the Jobs Act has a number of additional benefits in key areas that help catalyze small-business growth.
For example, the Jobs Act provides a better playing field for small businesses interested in doing contracting with the federal government.
And, recognizing that 96 percent of the world’s consumers live outside the U.S., the Jobs Act provides more tools to help small businesses tap into export markets.
For more information about the new Small Business Jobs Act, go to http://www.sba.gov/jobsact or contact the North Dakota District Office at (701) 239-5131 or firstname.lastname@example.org.
Former Fargo business owner Hannaher is regional administrator of the SBA, with offices in Denver.