The Small Business Jobs Act of 2010, signed into law by President Obama on Sept. 27, contains several provisions that take effect this year – intended to immediately benefit entrepreneurs and small businesses. If you’re thinking of expanding or starting a business, now is the time to do it.
Below are some of the major provisions of the bill and what they could mean for small business owners:
- Community banks will receive $30 billion to encourage small business lending.
(Since large banks haven’t significantly loosened up on lending (they say the demand for loans simply isn’t there), this provision could stimulate lending to small businesses turned down by big banks and other lenders.)
- SBA loan limits permanently rise from $2 million to $5 million for 7(a) loans and from $4 million to $5.5 million for 504 loans. Also permanently increases SBA microloans from $30,000 to $50,000. Temporarily increases maximum SBA Express loans from $350,000 to $1 million. Intended to give small businesses working capital to expand, and hopefully, start hiring again.
- No taxes on capital gains for angel and venture capital investors on small business investments. This is a temporary measure that applies for the rest of 2010. The idea is to encourage investment in small business immediately. If the investments are held for five years, the investors will be 100% exempt from capital gains taxes.
- Tax deductions of up to $500,000 for small businesses that purchase new business equipment. The deduction applies to 2010 and 2011 taxes. Previously, businesses would have been able to write off up to $250,000 in 2010 and only $25,000 in 2011. This makes it attractive for businesses to invest in their growth now, in the hopes that will immediately stimulate economic growth.
- Write off of up to $10,000 of start-up expenses for new businesses. A temporary measure that increases write-offs from $5,000 to $10,000 on 2010 taxes.
- Self-employed individuals can deduct 100% of their health-care costs on their 2010 taxes for themselves and their families.
- Landlords must fill out 1099 tax forms for major contractors. This provision is considered a major downside of the bill that will create more paperwork for some business owners. The measure is permanent, and there is no set expiration date.
About the author
Founded in 2006, Biz2Credit, is an online small business platform that creates access to a competitive environment of lenders to empower the entrepreneur. The online platform matches entrepreneurs with credit solutions based on their business profile and preferences in a safe and price transparent environment. Biz2Credit has a patented technology, which is used by over 100 major banks in the United States and by credit rating agencies like Dun & Bradstreet. Biz2Credit was ranked among 100 top emerging companies in the United States by KPMG and Stanford University in 2008, as well as the No. 1 financing resource by Entrepreneur magazine in the fall of 2009. With over $300 million in funding and over 25,000 SMB users in the United States, Biz2Credit is the market leader in this space. Have more questions? Please email at email@example.com.