Now that the Small Business Jobs and Credit Act of 2010 is finally law, it’s time to take a look under the hood and see what-all is in there.
Carol Tice in a story for Entrepreneur magazine says some have noted that calling it a jobs bill is kind of a stretch. There’s nothing that explicitly creates a job in here. The hope is that more funding will allow businesses to do more hiring. We’ll see how that pans out.
In the meanwhile, here’s a look at the rest of the Job Act provisions…some of which offer at least a glimmer of hope of getting more funding into small business owners’ hands. Higher SBA loan limits. The maximum size of an SBA-backed 7(a) loan rises from $2 million to $5 million, and 504 loans rise from a maximum of $1.5 million to $5.5 million. Loan fees for these stay gone for the 2010 tax year now, after earlier being eliminated for ’09.
State venture funds have been drained in the recession. The bill allocates $2 billion in new funds for established and new state small-business loan programs. This one’s a savvy move, as the state funds are public-private partnerships that use their own money to leverage bank guarantees and additional funds. So this $2 billion is expected to help catalyze $20 billion in lending.
Once again, I think these help more medium-sized than really small businesses. There’s a 100 percent exclusion from capital gains tax for angel and venture-capital investors on small business investments. This is intended to get more investors putting money into companies again. The Administration says over 1 million small businesses may benefit, receiving investments that won’t bring the investors any capital-gains tax as long as they stay invested in a company for five years.
Continue Reading: “What’s In The Small Biz ‘Jobs’ Bill?”
Photo by Entrepreneur.