Small business lending bill

When you are a small business, staying apprised of the current legislation that might affect you is wise. The past few years there has been a lending bill being fought and it was recently passed and signed by President Obama. Obama hoped that this lending bill, and the changes it will bring will help with economic growth by cutting taxes for small businesses and making more loans available to entrepreneurs. The small business lending bill offers a number of incentives and changes to make obtaining financing easier, and paying taxes less of a burden to the small businesses contributing to the economy.

Some of the highlights for the things the small business lending bill should do, the changes it has made, and what it means to small business owners are as follows:

- The largest part of the bill passing is that it simply opens up more money for small businesses. It does this because the bill included $30 billion of capital offered to community banks for making small business loans. Thus, it should make getting small business loans a little easier.

- Next, it changes how much of the loans are SBA guaranteed. This means even less risk to lenders, and thus once again easier loan approval for borrowers. It does this by temporarily raising the government guarantee on SBA loans to 90%. In addition, it makes getting these loans more affordable for borrowers by waiving the fees of 7 (a) loans and 504 loans. While this change is only temporary, it should make borrowing more affordable, and lending less restrictive.

- The small business lending bill also increased size limits on SBA loans, which means business can get larger loans. The 7 a loan maximum used to be $2 million, but will now be $5 million.

- It created a subsidiary 504 loan program which provides a refinance option for small businesses with unfavorable terms on their commercial real estate loans, a common problem since the real estate boom and subsequent collapse.

- One of the biggest helps, and most important to understand as a small business owner is the tax cuts and tax reliefs it provides. The bill provides relief to small business owners with $12 billion in targeted tax cuts, including the ability to write off health insurance premium costs for the self-employed, finally putting them on equal footing with the not-self-employed when it comes to healthcare. This change may not be long term, but small businesses can take advantage of it for at least one year (2010 income tax returns). This bill also increases write-off capital expenditures and extends the bonus depreciation break. It offers incentives for investment in C-corps, and more.

While there is still a debate in place over this bill, and some of the changes are only temporary, and may not be around long, small businesses should stay up to date on current legislation, and take advantage of it while it lasts.