Stimulus Money for Small Businesses

Definition: The Economic Stimulus Package provided money for small businesses. The FY 2011 budget allocated $64 billion, broken out as follows:

• $33 billionin tax credits for small businesses that add new workers or give raises beyond a cost-of-living increase.
• Raise the limit on SBA loan guarantees from $2 million to $5 million.
• $30 billion from the TARP program for 8,000 community banks (assets under $10 billion), which do half of all small business lending.
• $700,000 to eliminate capital gains taxes for investors in small businesses.

In 2009,stimulus money was made available to small businesses for the following:

• Deductions for machinery and equipment, such as computer and office equipment, signs, and vehicles was raised to $250,000 (except SUVs which were limited to $25,000). Property that didn't qualify for the tax credit coulc be depreciated by 50%.
• Investors in small, publicly-held businesses who held their stock for more than five years received a capital gains tax cut. Small businesses could delay paying the 3% withholding tax on goods and services sold to governments.
• Small businesses that hired unemployed veterans and students who looked for work for more than six months received tax credits.
• The Small Business Administration 7(a) loan guarantee was raised from 75% to 90% of the value of the loan. Fees were eliminated on the SBA's 504 program, which guaranteed $4 million worth of economic development loans to small businesses.

For more, see Benefits of the Economic Stimulus Package for Small Business from the About.com Guide to Business Finance, Rosemary Peavler.