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The Stimulus Plan and your business
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Our newly elected President Obama signed the American Recovery and Reinvestment Act on February 17, 2009. The goal of signing this into law was to stimulate our suffering economy. Although this document addresses various ways in which our economy can be stimulated from a governmental and state level, it has so many layers that is it hard to see how it effects our State.
Here in California, we have various challenges. We currently have one of the highest unemployment rates in the United States, and as of April 1, 2009, we will also be required to pay among the highest taxes. What options do businesses have to weather these difficult times?
What businesses should know is the U.S. Small Business Administration was allocated $730 million to assist businesses with financing. Of the total amount, they are charged with the responsibility of using $375 million to temporarily reduce or eliminate debts/loans due to them, as well as increasing guaranteed shares for loans. Furthermore, $255 million is to be used to create a new loan program to help small businesses meet existing debt payment. And, $30 million was allocated toward expanding the Small Business Administration’s microloan program to the degree where they can finance up to 50 million in new lending and $24 million in technical assistance grants to micro-lenders.
When it comes to taxes, tax breaks have been implemented to support businesses during this time of financial hardship. All companies will now be able to expense qualified assets in the first year of service. Businesses will also be able to take an additional bonus depreciation expense of as much as 50 percent of the total cost of fixed assets acquired within the last year. Vehicle depreciation has been increased from $2,960 to $10,960, for passenger vehicles in their first year of service. The depreciation for light trucks and vans was increased from $3,160 to $11,160. However, it is important to note the limit here is this only applies to vehicles put into service during the 2009 fiscal year. And, for those businesses with sales were less than $15 million, and incurred operating losses in tax years ending after December 31, 2007, they will have the opportunity to offset those losses against income earned in previous years to obtain a refund on previously paid taxes.
Don’t miss out on the opportunity to expand or rebuild your business, because you don’t have time or lack the knowledge of potential programs available in the market place. Now is the time for businesses to seek out professionals who have studied the American Recovery and Reinvestment Act, and discuss how your business might benefit from the monies being allocated by the Government. Loans, grants, tax breaks and more might be available to your business because of monies given to the State of California, as well. Seize your moment. Whether you are a large or small business, you can prepare yourself for conversations with the experts by visiting the U.S. Small Business Administration’s website.
For more info: U.S. Small Business and American Recovery and Reinvestment Act
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