What is in the Small Business Jobs Act?
Coming soon to a business near you: Money. Short of a merchant business loan, this recession has been extremely difficult for business owners to obtain credit. Now, the government has finally stepped in after noting record unemployment levels to try to give businesses the capital they need to start hiring again. The Small Business Jobs Act is headed back towards the house as the Senate version has passed. After that, it will be sent to the president’s desk to make it a law. It is set to release $42 billion targeted for lending for small businesses in the form of loans and grants.
It’s About the Job Numbers
Ultimately, the government hopes this business stimulus will provide enough money to create approximately $500,000 jobs in the private sector. Government jobs have been created under prior stimulus plans, but many were short-term positions, like the government Census workers. For a long-term recovery to take effect, the U.S. government has realized they must turn to the small businesses in America, who right now are unwilling to hire due to their inability to obtain credit.
Where Businesses Can Get Credit
It remains to be seen exactly how small businesses will qualify for lending, however, the emphasis is on providing the funds to community-oriented banks with assets that are less than $10 billion. They have historically shown more of a willingness to lend to small business owners, unlike the big banks which merely serve each other or large corporations.
There is also a provision for tax breaks for businesses that are supposed to help with capital expenditures and investments. In addition, incentives like the ability to deduct startup expenses on tax returns is another mechanism to put money back into areas that can help increase hiring. Finally, some programs will be administered through state agencies that will allocate grant money to support small business initiatives in their state.
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