“Now, the true engine of job creation in this country will always be America’s businesses. But government can create the conditions necessary for businesses to expand and hire more workers. We should start where most new jobs do — in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides it’s time she became her own boss.”
-President Barack Obama in his 2010 State of the Union Address
President Obama has proposed that the government assist small businesses by increasing financing opportunities and reducing tax burdens on small businesses.
Banks have been less willing to take risks on small businesses and small businesses have been reluctant to expand during the recession. To address this challenge, President Obama has proposed the creation of a $30 Billion Small Business Lending Fund from money being repaid to TARP (Troubled Assets Relief Program) by large institutions rescued by the bailout.
- Money would go to banks with $10 billion or less, and banks would get tax benefits for lending to small businesses
- The maximum loan would be increased to $1 million
President Obama proposed several tax incentives to encourage small business activity:
- Tax credits for over one million small businesses that hire new employees or raise workers? pay
- The removal of all capital gains taxes on small business investment
- Additional incentives for small business investments
- Cash for caulkers, encouraging energy efficient homes
In summary, these developments could help your small business hire more workers, increase pay, and invest in new assets and projects. Initial concerns have been expressed about the bandwidth of the Small Business Administration and customer?s perceptions of receiving TARP funding. Stay tuned for more updates as Washington discusses other small business assistance in the coming months.
-Post authored by Bunny Tucker, ISD Nicholas School of the Environment Assistant