On September 27, 2010 President Barack Obama signed H. R. 5297, the Small Business Jobs Act of 2010 into law. Below are some key points of the bill that business owners should be aware.
Small Business Administration
- Fee reductions for SBA loans are in effect from the American Recovery and Reinvestment Act of 2009 have been extended until December 31, 2010 OR until the $505 Million in appropriated funds are used.
- SBA 7(a) loan guarantees have been increased from 75% to 90% and loan amounts raised from $2 Million to $5 Million. (Sec. 1111)
- SBA 504 loan amounts have increased to $5 Million or $5.5 Million for small manufacturers. (Sec. 1112)
- SBA Microloan program loan amounts have increased from $35,000 to $50,000. (Sec. 1113)
- Loan eligibility size standards have increased to a maximum net worth of $15 Million in tangible assets and 2 year average net income of $5 Million. (Sec. 1116)
- A two year moratorium on the job creation requirement for loans has been enacted as long as the loan amount does not exceed $65,000 multiplied by the number of company employees. (Sec. 1122)
- Congress has instructed the SBA to establish a website listing each SBA lender and their respective loan rates for comparison. (Sec. 1118)
Built In Gains Tax
- Temporary reduction in the recognition period for Built In Gains tax from 7 years to 5 years in 2011. (Sec. 2014)
- Read our 2009 blog article “Selling an S Corporation – New Tax Rules for 2009 and 2010” to find out why this is important.
Section 179 Expense
- Allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year.
- The maximum write-off increases to $500,000 as long as the total equipment purchase does not exceed $2 Million (If total purchase is greater than $2 Million then write-off is subject to a dollar for dollar phase out). (Sec. 2021)
Small Business Development Centers
- $50,000,000 in grants was provided to SBDCs “to provide targeted technical assistance to small business concerns seeking access to capital or credit, Federal procurement opportunities, energy efficiency audits to reduce energy bills, opportunities to export products or provide services to foreign customers, adopting, making innovations in, and using broadband technologies, or other assistance.” (Sec. 1402)
Check back over the next few weeks to read why each of this points is important to the business owners.
To read the entire bill please click H. R. 5297, the Small Business Jobs Act of 2010.