Small Jobs Bill Signed Into Law

On Monday, September 27, President Obama signed the Small Business Jobs and Credit Act into law. The bill includes a series of small business proposals designed to make it easier for small businesses to get access to capital.

On Monday, September 27, President Obama signed the Small Business Jobs and Credit Act into law. The bill includes a series of small business proposals designed to make it easier for small businesses to get access to capital. The legislation is expected to create 500,000 jobs, according to CNN Money.

"This [legislation] is important because small businesses produce most of the new jobs in this country," the president stated. "They are the anchors of our Main Streets. They are part of the promise of America – the idea that if you’ve got a dream and you're willing to work hard, you can succeed. That’s what leads a worker to leave a job to become her own boss. That’s what propels a basement inventor to sell a new product – or an amateur chef to open a restaurant. It’s this promise that has drawn millions to our shores and made our economy the envy of the world."

Among the many provisions in the bill, according to WhiteHouse.gov, some of the benefits to small business are:

• Extension of SBA Recovery Loan provisions – immediately supporting loans to over 1,400 Small Businesses. With funds provided in the bill, SBA will begin funding new Recovery loans within a few days of the president’s signature, starting with more than 1,400 businesses – with loans totaling more than $730 million – that are waiting in the Recovery Loan queue. In total, the extension of these provisions provides the capacity to support $14 billion in loans to small businesses. The SBA Recovery loan provisions have already supported $30 billion in lending to more than 70,000 small businesses.
   
• An increase in the maximum loan size for the largest SBA programs. The bill also more than doubles the maximum loan size for SBA loan programs, which in the coming weeks will allow more small businesses to access more credit to allow them to expand and create jobs. The bill will permanently raise the maximum size for SBA’s two largest loan programs, increasing the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million. In addition, the bill will temporarily increase the maximum loan size for SBA Express loans from $350,000 to $1 million, providing greater access to working capital loans that small businesses use to purchase new inventory and take on their next order.
   
• A new $30 billion small-business lending fund: The bill would establish a new $30 billion Small Business Lending Fund that, by providing capital to small banks with incentives to increase small business lending, could support several multiples of that amount in new credit.
   
• An initiative to strengthen innovative state small business programs – supporting over $15 billion in lending. The bill will support at least $15 billion in small business lending through a new State Small Business Credit Initiative, strengthening state small business programs that leverage private-sector lenders to extend additional credit – many of which have been forced to cut back due to budget cuts.
   
• A five-year carryback of general business credits. The bill would allow certain small businesses to “carry back” their general business credits to offset five years of taxes – providing them with a break on their taxes for this year– while also allowing these credits to offset the Alternative Minimum Tax, reducing taxes for these small businesses.
   
• Eight new small business tax cuts – effective immediately, providing incentives to invest. In addition to theeight small business tax cuts already signed into law by the president, the law provides another eight new tax cuts that go into effect immediately:
  
  
  • Zero taxes on capital gains from key small business investments. Under the Recovery Act, 75 percent of capital gains on key small business investments this year were excluded from taxes. The Small Business Jobs Act temporarily puts in place for the rest of 2010 a provision called for by the president – elimination of all capital gains taxes on these investments if held for five years.
    
    
  • Extension and expansion of small businesses’ ability to immediately expense capital investments. The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million.
    
    
  • Extension of 50 percent bonus depreciation. The bill extends a Recovery Act provision for 50 percent “bonus depreciation” through 2010, providing two million businesses, large and small, with the ability to make new investments today. Businesses can receive a tax cut for this yearby accelerating the rate at which they deduct capital expenditures.
     
  • A new deduction of health insurance costs for self-employed. The bill providestwo million self-employed people with a deduction for the cost of health insurance for themselves and their family members when calculating their self-employment taxes. This provision is estimated to provide over $1.9 billion in tax cuts for these entrepreneurs.