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Small Business Stimulus Programs

The Road to Economic Recovery

Small Business Stimulus Programs

What's in the small business stimulus package for small business owners? We've got the highlights of how the stimulus program will impact small business owners and entrepreneurs.

The stimulus package for small business owners that recently passed has a lot of small print.

If you own a small business and you're looking for practical takeaways on how the stimulus package might affect a small company, here's the Cliff's Notes version of the bill.

Help for Small Business Owners Who Need to Raise Money

Expanded SBA Microlending will come as good news to many entrepreneurs. The money allocated to microlending was increased by $6 million. This is for small business loans of $35,000 or less. They are available throguh SBA partners lending organizations.

If you are thinking of applying for an SBA loan, you will be happy to know that SBA 7(A) loan guarantees have been increased to up to 90% of a qualifying loan, no more than $150,000 but still a nice increase. The SBA will also temporarily eliminate or reduce fees on their loan guarantee programs, which is a nice added bonus.

Of course, SBA lenders have not been lending. The latest small business stimulus program attempts to crack that code by allowing the Treasury Department to spend up to $15 billion to buy pooled SBA loans. With this secondary market in place, expect banks to start lending again. Cross your fingers that it will happen!

Another great source of funding is government agency grants. Many start-ups get funding via programs like the Small Business Innovation Research (SBIR) grants and Small Business Technology Transfer (STTR) programs. Monies for these federal grants programs has been expanded and that money will filter down to small businesses as they win government grants.

Help for Small Business Owners Who Lost Money

Your accountant can explain this one better than us, but here's how it seems to work. If your business lost money, you can go back in time two years and apply a loss to taxes you've already paid. You can also carry forward a loss for two years, allowing you to reduce future taxes. You can only do this if your gross receipts are at or below $15 million.

Help for Small Business Owners Who Need to Buy Equipment

Through 2009, you can write off up $250,000 in spending for equipment (machinery, vehicles, computers, etc.). That's up from $125,000. Prior to the stimulus, you'd have to depreciate your spend over $125,000. Long story short, this can lower small business taxes for many business owners.

Help for Small Business Owners Who Hire New Employees

If you're in the mood to hire, there's some good news. The small business stimulus package contains some nice hiring tax credits. If you give a job to a new employee who falls in a targeted group of disadvantaged individuals , you can receive a $2,400 credit per worker . In addition, the Work Opportunity Tax Credit allows a 40% tax claim on the first $6,000 in wages paid to these new workers.

Two new categories of disadvantaged workers have been added to the new package. These include veterans who have been unemployed for at least 4 weeks and left the military within the past 5 years, and disconnected youth, with disconnected being defined as between the ages of 16-25 with no formal education and no work in the past six months.

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What's your opinion on the stimulus package as it relates to small businesses? Did we miss any key program elements? We welcome all comments, tips and suggestions.

David posted on 5/13/2009

This business stabilization funding is a farce, the money will never be made available to small businesses as intended, I have tried to get funding for my business through this program for 3 months now, I was finally told the money was only available through non profit organizations linked to the SBA. However after researching that I discovered that the SBA will flat tell you that they don't know how to implement the new programs and it is likely that they never will, since they can't figure out who does and does not qualify for assistance funding under this administrations rules. Since the money is just sitting there in limbo, the SBA will just merge it into the general fund and use it for pre existing programs that are of no benefit to struggling business. Based on this new information I have reluctantly elected to close my once prosperous business, since there is no help on the horizon as promised
[email protected] posted on 5/29/2009

Small business that say that the have applied are just trying to discourage you from taking advantage of this money. The Stimulus packages don't come out until June 15, 2009. David is a liar friends. Ask your local legislator or the SBA in your area for the truth!!!!!!
Fred posted on 8/4/2009

There is no real voice for the small business owner in this country. I'm talking about the businesses that make less than a million dollars a year which are numerous. We have no lobbyist no voice and no one who really cares because we cannot line the pockets of the politicians. If small business truly is the backbone of this country then why don't politicians take a responsible approach to policy and taxation of small business? Because there is nothing to be gained for them personally. This country can achieve so much more if we could get greed and personal gain out of the minds of politicians in Washington.
ME posted on 8/6/2009

Seriously, how do you know that David is lying? What he is saying sounds about right, however, I'll call the SBA myself to see what's available.
Ron J posted on 11/7/2009

Everybody has the the same issues.We thought that we were safe in the Maritime Industry. Wachovia recieved bailout money we bank with them for (4) years we started with $100.00 we have had deposits of $500,000.00 work is slow we tried to get a loan with collateral they told us to get f..ked.We sent letters to our State Senator/Congressman as well maybe that might work
dan posted on 2/2/2010

Ron and others: as a veteran owned small business, I have been profitable for 21 yrs. This year 2009 we were not, not much howeve., Wells Fargo/Walk all over you-Wachovia called our line of credit when we needed it the most. $100K and now they want 8% P&I now. We now are looking to replace W&W bailed out bankers, however, the hard part is that Wells and others have bought them all and then cried to the US FEd and got more money. Good luck all, in finding a decent loan. Good bye Wachovia - HELL O Wells Farce we go. VietNam Veteran Owned and proud of it. We will survive and pay back is a wonderful thing.
Kirk posted on 2/11/2010

All very interesting comments here. One of our very REAL frustrations is we are a NEW business and have foot the bill for all start up costs. All we need funding for is marketing and advertising. What they tell us is the Small Business money is only for business who have already "failed" on loans and the "bailout" is to do just that...rescue small businesses that have already defaulted. Whatever the reason for the defaults we can't say. But NOTHING for the new business looking to create jobs! Insanely enough, as a new business, with no credit history, they go off our personal credit which is impeccable and all debts paid on time...here's the catch, we don't have ENOUGH outstanding debt for their liking...AND too many "inquires" on our credit. Well, when searching for a business vehicle, like all good shoppers, we shopped around. Resulting on a small number of "inquiries". I believe about 8. Of course, for the Stage Coach bank that is too man in a YEAR! I am shocked! There is a credit inquiry these days to get a cell phone, rent, a job in some cases...almost everything we do. This shouldn't be a criteria. Face it...ALL of us in some shape or fashion is setup NOT to succeed, while the banks get OUR tax dollars to bail their non managed buns out of hock. Very frustrated! Keep an eye out on YouTube for our advertising coming in the next month. it's free...we have freedom of speech and it should prove QUITE interesting to some in the Banking Business.
Lisa posted on 3/6/2010

I was looking for some answers here, but I found some interesting and similar complaints. We were/are a small construction company (sole Proprietor) in a small resort/retirement community. And when the economy fell apart so did we. We tried to stay afloat by using our personal cridit which only led us to losing our house to a short-sale. We approached some banks to consider our options, consolidation, small business loan etc. Well that did not happen. No tax cuts for failed businesses even if you can carry forward the loss is not going to help. The debt is NOW, brought on by the irresponsible freedom of the BIG business, and the little guy is out. Why would any banking institution in their right mind give money to a business that is already indebt and do not see the light at the end of the tunnel? I think it is appalling that the SBA does not know who is qualified. And did you know that most self employed business owners are not eligible for unemployment benefits and are not even counted amongst the unemployed. further, as a small business we did not qualifiy for the $800.00 stimulus packagae of 2008, because we did not make the necessary $3,000 of earned income. We are not eligible for a welfare or health care in our county. NONE of the stimulus payouts have found its way to us. If anyone knows where or who to turn to, please comment here.
kent briwa Owner-kd gecko inc posted on 8/30/2010

The issue all of us are overlooking is that during the economic devastation we have seen for 2 to 3 years.....my ability to qualify for credit has gone from limited to unavailable even though we have numerous and comparative previous experiences with positive outcomes....bottom line....no one is willing to risk anything....
Rick posted on 9/20/2010

I have been reading many of the articles above and much to my delight I find that I am not alone with my frustrations within the economic realm of government and private control. I remember back 10 years ago when a credit score of 620 was pretty darn good and would get you about anything you needed. Nowadays, if you are not 700 or higher you cant even get an appointment with any financial institution. Who gave the (3) powers to be ( credit bureaus ) the right to govern who is a good risk or not. Half the time thier reports are B...S.... and wrong anyhow. These are the same people that judge all mankind in the United States. Worst of all the Government allows it to happen. As for a small business stimulus, are you kidding ? Try to find some stimulus. I have owned my own restaurant now for 4 years and I have struggled as so many others have. I have everything I own in this business. We have been very well rated aby most all of our customers and our biggest trouble is trying to get the word out to other people. Our customers do very well at spreading the word but it is going to take more. Advertizing rates are so outrageous who can afford it. Local newspapers won't really help you if you aren't linning their pockets weekly with your ads. Every penny I make has to go back into my business and even then that is sometimes not enough. How can the American government state that " Small Businesses are the backbone of our country" yet do all they can to make it impossible to obtain any hep at all?
lois posted on 9/21/2010

How and who do I apply to for a small business stimulus loan and to be up front my credit is not good. Last year was a disaster but i'm not willing to throw in the towel this year. I want to keep my store. Please some one out there give me a name and number to help me. Thanks.