On Sept. 27, President Barack Obama signed the Small Business Lending Fund Act (H.R. 5297) into law, creating a $30 billion fund to help small businesses expand and hire. The bill also includes eight separate tax breaks for small businesses and a boost for Small Business Administration loan programs.
The legislation reinstates the 50 percent depreciation bonus for 2010 and also creates a lending fund to provide capital for small businesses and increases Sec. 179 expensing levels to $500,000 (and the phase-out threshold amount to $2 million) for 2010 and 2011.
Obama said the incentives will help small businesses create jobs in the short term.
The credit provisions of the bill include an extension of the fee waiver for SBA 504 loans, a Small Business Administration financing program, first enacted as part of the American Recovery and Reinvestment Recovery Act and a permanent increase of the maximum loan amounts to a range of $5 to $5.5 million.
Larger projects are now eligible for 504 loans and borrowers who already have loans with the SBA can now return for additional funding. Also included is a new temporary program that helps small businesses refinance existed debt.
Increase of Section 179
To motivate companies to spend money on equipment, Section 179 of the tax code allows businesses to write off capital expenditures immediately. Due to the Recovery Act, businesses could write off up to $250,000 worth of equipment through 2009. This bill extends the benefit through 2011 and the maximum increases to $500,000.