Small businesses will be able to qualify for new small loans

With an estimated cost of $ 7 billion over the last 10 years, Congress has passed a package of small business stimulus measures. This should be able to spur lending, increase tax cuts, and provide new equity financing. This bill is in response to the increasing costs that come from starting a business, and will be overseen by the Treasury’s inspector general.

Resource for this article: Small Businesses to qualify for new small loans Personal Money Store

Small business bill cuts taxes

The small business bill is a combined bill that closes a whole bunch of tax loopholes and renews tax cuts for small businesses. There would be $ 3.6 billion in tax breaks for small businesses to be implemented within the next 10 years. The tax breaks can be paid for by increases in tax for large businesses. Those with small businesses can deduct startup costs from their taxes. This provision of the bill began as a separate measure in Congress, but is being combined as it is sent to the Senate.

Additional money to flow to small businesses

The small business lending bill will likely create 3 major avenues for small businesses to get money. First, there would be a $ 30 billion fund of “preferred stock” that banks would be allowed to tap based on their lending to farms and all of the small businesses. There would also be $ 2 billion given to states to help increase state-funded loans to many different small businesses. Third, the Small Business Administration would be allowed to try and match $ 1 billion of private investment in startups.

Small business bill getting paid for

In order to pay for the estimated $ 7 billion cost of the small loan for businesses bill, the government can have to increase some taxes. Specifically, tax breaks for Grantor-Retained Annuity Trusts — trusts set up to stay away from taxes on gifts — can be rescinded. Also, there will be taxes on the sale of some stock that would be increased to the point of standard income taxes as opposed to capital gains taxes.

Vote on the small business bill

On a 241-182 vote, the small business bill passed. The bill is now being combined with the $ 3.6 billion tax-cut bill that is for small businesses and will go to the Senate. The bill is expected to pass the Senate, though not effortlessly. Some Senate Republicans are arguing that this bill is really “another bank bailout” masquerading as a small business stimulus package. Democrats counter that the bill takes an extremely balanced approach to traditional and non-traditional lending for new businesses.