Small Business & Economic Stimulus Progam

April 17th, 2009 by Elizabeth Beskin | Share Blog

This is a post by my dear friend Shirley Moulton. http://www.etuckshop.com She has a way of making everything seem simple and easy to understand. Hope it is helpful for small business owners-Elizabeth

Economic Stimulus progam-High Level understanding for small businesses

This 787 billion dollar program addresses 3 primary areas:

1) Spending….industries and projects money will be spent on
2) Tax Provisions
3) Aid

Small Businesses  can and will benefit from all three areas:
1) Spending:
-Bars, restaurants and other retailers are counting on increased
business from consumers who will start getting their tax rebate checks
in May. “That’s where small businesses will benefit the most,” said
Barbara Weltman, a lawyer and small-business tax specialist in
Millwood, N.Y.
-SBA Loans: As announced in a Treasury Department press release, to
help loosen this log jam the government will purchase $15 billion
worth of securities backed by SBA guaranteed loans. This will
hopefully allow lenders, freed from some of the old SBA loans, to make
new SBA backed loans to small businesses.

To entice lenders to make those new SBA backed loans, the plan
temporarily increases the portion of Section 7(a) loans (the most
common type of government backed small business loan) to 90%.
Normally, the SBA backs up to 85% for loans at or below $150,000 and
up to 75% for larger loans. To further entice lenders, the plan also
temporarily eliminates SBA loan fees.

2) Example of Tax Provisions:
- A small business like Dahm Trucking, which has annual revenue over
$5 million, the most valuable provision is the increased expensing.

The legislation helps businesses in two ways. It gives companies a 50
percent bonus deduction on new equipment that would normally be
depreciated over many years. And it increases — to $250,000 from
$128,000 in 2008 — the limit on expenses that small businesses can
deduct from annual income, with a total cap of $800,000.

-The U.S. Small Business Administration welcomes you to this new
resource center, which connects America’s entrepreneurs with tax
management tools and strategies to maximize savings from the 2008
Economic Stimulus Package.http://www.sba.gov/stimulus/

3) Aid
e.g of an aid program will be $17 billion incentive payments to
hospitals and physicians who computerize medical-records systems.
This will be great for companies who deliver information technolgy
solutions in the medical records area.

For more information,This link will outline full details of where the 787 billion spend in the
three areas:
http://online.wsj.com/public/resources/documents/STIMULUS_FINAL_0217.html