FACT SHEET: How Small Businesses Can Benefit From the Small Business Jobs Act
President Obama to visit Rhode Island Monday, highlight small business investments
WASHINGTON -- On Monday, President Obama will tour and make remarks at American Cord & Webbing Co. Inc, a small business in Woonsocket, RI. American Cord & Webbing is a manufacturer that makes cords, buckles and plastic and metal hardware for sporting goods, outdoor goods, and travel gear.
Though American Cord & Webbing was hit by the economic downturn and forced to lay off some workers in 2009, they invested in new product development to pursue new customers and over the course of the past year they have brought all of their former laid-off employees back. American Cord and Webbing currently has 47 employees and plans on hiring more. And last month, the company was approved for an SBA loan that will help the company expand its Woonsocket facility, going from 30,000 sq. ft. to 43,000 sq. ft. by next spring.
At the event on Monday, the President will discuss American Cord & Webbing’s success story, and highlight how businesses like this one can benefit from the Small Business Jobs Act that the President fought to pass and signed in September. Below is a list of specific ways that businesses like American Cord & Webbing can benefit.
How Small Businesses Like American Cord & Webbing Benefit from Administration Tax Cuts and Lending Initiatives
· American Cord & Webbing Is Saving More than $9,000 from SBA Loan Provisions: Thanks to fee waivers extended by the Small Business Jobs Act, American Cord & Webbing was able to get approved for a SBA 504 loan and save over $9,000 in fees. The Small Business Jobs Act allows small businesses across the country to take advantage of an extension of Recovery loan provisions that increase 7(a) guarantees and temporarily eliminate certain fees on 7(a) and 504 loans. Already, SBA has approved over 3,600 Jobs Act loans representing $1.4 billion.
· Small Businesses Like American Cord & Webbing Can Benefit from Eight New Small Business Tax Cuts Signed Into Law Just Last Month: The President signed into law a Small Business Jobs Act in September that included eight new small business tax cuts, all of which apply this year. These are on top of eight earlier small business tax cuts signed by the President, and will provide or accelerate $55 billion in tax relief through the end of 2011. For example:
o Small businesses that invest in new capital and equipment can immediately write off more of these expenses. The new law increases the amount of new investments in capital and equipment small businesses can immediately expense to $500,000, while raising the level at which the write-off phases out to $2 million. This provision means 4.5 million small businesses and individuals will be able to make new investments and earn a larger break on their taxes for this year.
· American Cord & Webbing has indicated its intention to invest in new machinery and equipment. If it does so, it could become one of millions of small businesses and individuals that will benefit from this new tax cut.
o Small business owners can deduct health insurance costs from their self-employment taxes: The new law allows self-employed small business owners to deduct the cost of health insurance for themselves and their families from their self-employment taxes this year – a tax cut that could benefit 2 million self-employed.
· As a self-employed small business owner, Mark Krauss of American Cord & Webbing may be eligible for this deduction that will cut his self-employment taxes.
o Small businesses can deduct the use of cell phones without burdensome extra documentation: The new law changes tax rules so that small businesses like American Cord & Webbing can receive a tax deduction for company-provided cell phones without burdensome extra documentation, making it easier for them to get deductions that they are entitled to, beginning on their taxes for this year.
o Small businesses can benefit from other provisions that support them as they expand and create jobs: Small businesses can also benefit from other tax cuts like the elimination of capital gains taxes on key small business investments, the extension of bonus depreciation rules that allow businesses of all sizes to accelerate the rate at which they can deduct new investments, an increased deduction for start-up expenses, a “carryback” provision for general business credits, and limits on tax penalties that can disproportionately affect small businesses.
· Small Businesses Like American Cord & Webbing Are Eligible for New Tax Credits for Hiring Unemployed Workers: As a result of the HIRE Act, small businesses like American Cord & Webbing that hire unemployed workers can get tax exemptions and credits. From February to August, businesses across the country hired 8.1 million new workers who had been unemployed for 60 days or longer, making them eligible for HIRE Act tax incentives.
· Small Businesses Like American Cord & Webbing Can Now Take Out for Larger SBA Loans: Small businesses like American Cord & Webbing are now eligible to take out larger SBA loans – with the maximum 7(a) and 504 loan size more than doubled from $2 million to $5 million and the maximum 504 manufacturing related loan size increased from $4 million to $5.5 million.
· New Treasury Programs Will Help Provide Credit for Small Businesses Like American Cord & Webbing That Are Seeking to Expand: Treasury is setting up two new programs designed to support private-sector lending to small businesses like American Cord & Webbing that are seeking credit to help them expand and create new jobs:
o The Small Business Lending Fund will make available $30 billion in capital to small banks with incentives to increase small business lending, potentially supporting several multiples of that amount in new credit.
o The State Small Business Credit Initiative will support at least $15 billion in new lending by strengthening state small business programs – many of them facing budget cuts – that leverage private-sector lenders to extend additional credit.