US 2011 budget and small businesses

American enterprise was always fuelled by the inspiration, ideas and drive of small businesses that aspire to become successful. In 2009 with shrinking economy and banks seriously limiting  access to credit, small and midsize businesses suffered the most. Healthcare legislation created more confusion because many business waited to see what it will actually cost. The new 2011 budget presented today by the government pays close attention to these matters and rightly so. But does it do enough?

 

I will highlight some of the budget articles that can have implications for US small and midsize business. 

 

Small Business Credit. Among the measures to spur economic growth is guaranteed access to credit for small business, defined at $17.5 billion. There is also $7.5 billion in guaranteed lending for commercial real estate development and heavy machinery purchases. The budget also proposed to increase the maximum business loan sizes to $5M.

 

Cancelled Capital Gains Tax on small business investments. Another part of the budget offers to eliminate Capital Gains tax on investments in small businesses. To create an incentive for long-term investments in the small business sector, the budget eliminates capital gains taxes on long-term investments in many small businesses. The Recovery Act temporarily increased the exclusion to 75 percent. The 2011 budget proposes to raise this exclusion to 100 percent, meaning that no income tax would be paid on the investments in our small businesses. This particular measure should make small businesses much more attractive to the potential investors.

 

These 2 items pretty much summarize any sizable action related to small business in this $3.8 trillion budget. Entrepreneurs are used to rely on themselves to be successful and it is not going to change. Let’s hope these initiatives make it a little easier. 

Comments: 0; Published: February 01, 2010; Permalink

Tags: small business,supliers