Small Businesses Get Tax, Financing Help from Federal Government

By Rieva Lesonsky

A new session of Congress is in full swing, and as spring approaches, several programs that will help small businesses with financial issues are beginning to sprout. Here’s a rundown:

New SBA Loan Programs to Launch: The SBA will launch a new loan program, called Community Advantage, this spring, the Los Angeles Times reports. The program targets underserved markets, including companies under 2 years old, those in low- to moderate-income communities and veteran-owned small businesses. The SBA will guarantee up to 85 percent of the loans, with maximum loans of $250,000. The loans will be made by nonprofit lenders that currently are not allowed to make SBA-guaranteed loans.

The new Small Loan Advantage program will also launch this spring, with the same loan limits and guarantees. The difference is that these loans will be made by larger, existing SBA lenders, and have fewer restrictions on who can receive the loans than Community Advantage does.

The SBA is hoping the higher guarantees in both programs will attract more lenders and convince them to make more loans.

Small Business Lending Fund Gets Ready to Roll: The Small Business Lending Fund has been a long time in the making, but the investments are set to begin this quarter, reports BusinessWeek. The program provides capital to community banks, and the more loans they make to small businesses, the lower their interest rate on the money (as low as 1 percent in some cases). Essentially, it’s a way for banks to refinance TARP capital at lower rates.

The program was part of the Small Business Jobs Act signed by President Obama in September, and the Treasury Department started accepting applications from banks in December. Program director Jason Tepperman told BusinessWeek he was “pleasantly surprised” by the number of banks that applied. Banks can apply through the end of March.

President Urges Business Tax Credits: When he submits his budget President Obama will ask Congress to permanently eliminate capital gains taxes on some types of investments in small businesses, says MarketWatch. The provision, which Congress has to approve, is part of the small business jobs act the President signed in September, but which expires at the end of 2011. The President is also expected to propose expansion of the New Markets Tax Credit, a credit that encourages investment in startups and small companies in low-income areas.

Image by Flickr user Andy Withers (Creative Commons)

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This entry was posted on Wednesday, February 16th, 2011 at 6:00 am and is filed under Capital Access, small business. You can follow any responses to this entry through the RSS 2.0 feed.


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