The Obama administration announced a series of actions Wednesday to aid small businesses and create jobs.
Five of the six initiatives are immediate executive actions that will accelerate federal payments, reduce paperwork, and make it easier for small firms to access loans and tax credits. The other is a legislative proposal to raise the amount of investment small businesses can expense next year.
Through the Office of Management and Budget, Obama will direct agencies to make contract payments along an accelerated timeline to all prime contractors for the next year (typically 15 days after receipt of proper documentation, as opposed to 30 days), with the understanding that those prime contractors will similarly accelerate payments to their small business subcontractors.
Obama is calling on Congress to let small businesses write off up to $250,000 in capital investments in 2013, such as machinery and equipment, to drive productivity. This builds on the President’s proposal for 100 percent expensing for all firms in 2012. Because an increase in Section 179 expensing was part of the 2001 / 2003 tax cuts, this proposal is included in Obama’s call for extending those tax cuts for the middle class next year. Without that extension, the expensing limit for small businesses is scheduled to decline to only $25,000 in 2013.
The Small Business Administration is re-launching Small Loan Advantage, one of its small dollar loan products, as SLA 2.0. The revamped program raises the maximum loan amount from $250,000 to $350,000, streamlines the loan process, and makes it easier for lenders to extend loans to small businesses across America.
The SBA is launching “QuickApp,” a streamlined application that will eliminate the need for contractors to complete five unnecessary forms to apply for surety bond guarantees under $250,000. Providing small firms, particularly in the construction industry, streamlined access to these bonds will make it easier for them to compete for and win additional business, which is important to allowing them to expand and create jobs.
Cutting the online application for the SBA’s Disaster Loan Program from 80 screens to three or four screens, depending on the loan type, will allow families and businesses faster access to support for rebuilding after a disaster.
The Obama administration is working on a set of regulatory reforms to the existing New Markets Tax Credit that will make it easier for community development entities to attract private sector funds for investment in startups and small businesses operating in lower‐income communities.
The forthcoming regulations are designed to encourage CDEs to invest in other types of small local businesses by relaxing the reinvestment requirements for CDEs investing in certain operating businesses. The Treasury Department is also considering regulatory reforms that would further simplify the requirements for these CDEs and intends to publish these for comment in the future.
