Small businesses could 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

Taxes cut by small business bill

The small business bill is a combined bill that closes tax loopholes and renews tax cuts for small businesses. There would be $ 3.6 billion in tax breaks for small businesses to be implemented over the next decade. The tax breaks can be paid for by increases in tax for large businesses. Startup expenses for a small business could be deducted 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.

Small businesses to see extra money

The small business lending bill would 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 any of their farms and small businesses. There would also be $ 2 billion given to states to help increase state-funded loans to small businesses. Third, the Small Business Administration would be authorized to match $ 1 billion of private investment in startups.

Paying for the small business bill

In order to pay for the estimated $ 7 billion cost of the small business loans bill, the government will be increasing some taxes. Specifically, tax breaks for Grantor-Retained Annuity Trusts can be rescinded. Also, there can 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

The small business bill has passed the house on a 241-182 vote. 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 within the Senate. 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 a balanced approach to traditional and non-traditional lending for all of the new businesses.