The United States Senate has passed the “Small Business Jobs and Credit Act” (HR 5297).
SEMA urged quick ratification by the House of Representatives so that it could then be signed into law by President Obama.
The legislation creates a $30 billion fund to provide banks with less than $10 billion in assets access to capital to lend to small businesses while providing tax incentives to encourage business development, according to SEMA.
In addition, the bill includes $12 billion in tax cuts and stronger government loan guarantees.
“As the key to our nation’s economic recovery, small businesses must be given every opportunity to expand and prosper,” said SEMA President and CEO Chris Kersting. “A lessened access to capital has served to prolong this stagnant economy and resulted in unnecessary anxiety for businesses and consumers alike. SEMA members who qualify for this program will benefit greatly from this fund.”
In addition to providing loans, the legislation will also extend the bonus depreciation through 2010.
In 2008 and 2009, all businesses were permitted to immediately write-off 50-percent of the cost of new equipment (“bonus depreciation”). The depreciation expired at the end of 2009.
SEMA contends the depreciation write-off encourages companies to invest in newer, more efficient equipment and spurs sales and creates jobs.
The Senate bill would also expand and extend the Section 179 program, allowing companies to write off up to $500,000 in capital expenditures in tax years 2010 and 2011, double the current limit for 2010.
“SEMA is working at all levels of the lending chain to help make credit available to our members,” said Kersting. “Enacting H.R. 5297 into law is vital towards achieving this goal. We look forward to quick House passage of the bill.”