How Does the Economic Stimulus Bill Help Small Businesses?

With the passage of the $787 billion economic stimulus bill, everyone wants to know how and what they have coming to them. As many politicians struggled to read the more than 1,000 page document, journalists are having just as hard a time filtering through the most important measures the bill enacts. In the form of small business benefits, there's an argument on both sides on whether the bill does enough.

For starters, you can deduct business expenses up to $250,000 - up from $128,000. Small businesses, which the bill classifies as firms making $15 million or less in gross revenue, will also benefit from a net operating loss carry-back provision. This will allow you to use existing losses to offset taxes paid on profits in the previous five years.

One of the major issues the first stimulus bill was hoping to remedy - which was largely seen as a bank bailout - was to get banks to start loaning money to small businesses again. Right now, this stimulus bill authorizes the Small Business Administration to reduce or eliminate fees for banks participating it its new loan-guarantee programs, which will insure banks against default by small business borrowers.

Small business owners can get some immediate relief from the SBA in the form of loans up to $35,000 - which can be used to pay off up to six months of existing loans. Borrowers must repay the loan within five years and will also not have to make any payments for the first year. The allocated money by Congress is limited though; When the $630 million dollars begins to run out, borrowers will have priority over lenders, and small bank lenders will have priority over the larger ones.

While the SBA "applauds" the Stimulus Bill for the help it will give towards "unlock(ing) credit markets and begin economic recovery for the nation's small business sector," the American Small Business League says the bill offers "no specific provisions to direct even one dollar to those funds to America's 26 million small businesses.

Sincerely,
Community Relations

P.S. Be sure to participate in our forthcoming survey on whether you approve of certain elements of the stimulus bill. Thanks.

Finding Small Business Loans When Banks Won't Lend

Since a $700 billion bailout was approved and almost half of it has been dispersed among the banking industry, small business owners have yet to see any of this money in the form of loans. Despite warnings from congressional leaders, and even President Bush, to not horde cash and begin loaning again, the banks seem to be reluctant to do so.

In this CNNMoney.com story, titled 'Message to Obama: Send Loans Fast,' the author suggests President-elect Obama should do exactly what he promised to do during the campaign, which is: 'start cutting loan checks directly from the government.'

In October, Obama proposed temporarily suspending the fees the Small Business Administration charges for participation in its flagship loan-guarantee programs, which insure banks against losses on a portion of the money they lend to qualifying small businesses. But he also suggested making direct loans available through the SBA's Disaster Loan Program, which traditionally assists natural-disaster victims.

Well, until President-elect Obama takes office, it seems unlikely a President with less than 10 weeks left in office will be able to accomplish anything in a Democratic Congress. We've written before about Small Business Help, Resources, and Loans, but if you aren't having any luck and have been maxing out your credit cards, check out this article titled '5 Alternatives to Borrowing from Banks.'

Sincerely,
Kevin
MerchantCircle Community Relations

Small Business Help, Resources, and Loans

With many local businesses struggling due to the recent economic condition, we've launched a number of programs to help merchants save money and find more customers.

• Marketing Advisor Program - Pays you money for each merchant you sign-on to the MerchantCircle network.
• Merchant Marketplace - Saves you money on essential business needs and products from Fortune 500 companies.
• Instant Website - Instead of paying a company hundreds of dollars to build you a website, buy a domain name, and host the website - MerchantCircle offers all of this for as low as $6.99 a month!

There are many government organizations that are designed specifically to help out small businesses. With the $700 billion dollar bailout, some of that money is supposed to help out local businesses. Check out these sites:

• U.S. Small Business Administration (SBA) - You can find programs, services, and tools to help you grow your business.
• Business.gov - Find government loans and grants, licenses and permits, and links for many other resources.

Hopefully these links come in handy.

Sincerely,
Kevin
Community Relations