President Obama Wednesday announced five policy changes designed to boost small-business growth and job creation.
The changes—immediate executive actions—will accelerate federal payments, reduce paperwork and make it easier for small firms to tap into loans and tax credits. Here’s a summary of the announced changes.
1. Bigger capital-investment deductions. Allowing businesses to deduct 100 percent of the cost of significant investments, such as the purchase of new equipment. (Currently, the write-off of those costs is capped at 50 percent.)
2. Paying government contractors. Another initiative announced would accelerate payments to government contractors, “with the understanding that those prime contractors will similarly accelerate payments to their small business subcontractors,” Obama says. Payment time will be cut to 15 days from 30 days (after submission of proper paperwork).
3. Raising loan amounts. Obama also calls on the Small Business Administration to increase access to capital by relaunching Small Loan Advantage, raising the maximum loan amount from $250,000 to $350,000, and streamlining the loan process, making it easier for lenders to loan to small businesses.
4. Cutting red tape. The SBA will launch “QuickApp,” which slashes the paperwork for surety bonds under $250,000—letting contractors ditch “five unnecessary forms,” according to The White House. Another effort to streamline: The online application for the SBA’s disaster loan program will be cut from 80 screens to three or four screens (depending on the loan type).
5. Opening up tax credits. Finally, there would be regulatory changes made to the New Markets Tax Credit, making it easier for community development entities to attract private funds for investment in startups and small businesses operating in lower‐income communities.
Source: OPEN Forum – Obama Orders Help for Small Businesses