Coffee Break Chat

Small business proposals offered in State of Union address

In his State of the Union message President Barack Obama offered a series of proposals to Congress to help stimulate jobs and the economy by helping small businesses. Then he took his message to Nashau, New Hampshire. We'll report on that visit in another blog post to come.

"We should start where most new jobs do -- in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss," he said in his speech.

He offered the following incentives to the small business men and women:

• A new lending fund for entrepreneurs to get credit flowing again

"I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat."

• Tax credit for small businesses that hire workers

"I'm also proposing a new small business tax credit -- one that will go to over one million small businesses who hire new workers or raise wages."

• Eliminate capital gains taxes

"While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment."

• Double the market for exports

"We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security."

• Reform health care

"I also know this problem is not going away ... Small business owners will continue to drop coverage altogether.  I will not walk away from these Americans, and neither should the people in this chamber."

Will these ideas help your small business? Let us know by commenting below.

How will New Hampshire's small businesses do in 2010? Take our poll

In this end-of-the-year article from the New Hampshire Business Review, business owners proclaim that "Flat is the new up"--meaning if they don't lose money or business in the new year, it will be a good thing. The economic recovery is slow and sputtering. Housing sales in New Hampshire are up, a fact that most experts agree is a good sign. Will your business benefit this year? Take our two mini-polls, above and below, and let us know how you're feeling as 2010 opens.

Survey: New Hampshire business confidence up for 2010

Though they say their employment ranks are likely to stay flat, New Hampshire business owners are more confident than in the past about their prospects for 2010, according to a new survey.

The Business and Industry Association of New Hampshire collaborated with Portsmouth-based RKM Research and Communications for the sixth annual business outlook survey.

It showed:

• New Hampshire businesses expect overall economic conditions to improve in 2010;
• Despite an improved economic outlook, the majority of businesses don’t expect to add more workers;
• Future revenue expectations, which have diminished sharply since 2006, are slightly higher going into 2010;
• Expectations for future capital expenditures are similar to last year, suggesting businesses are still cautious and will probably not seek to grow much in 2010.

“The situation is still tough for most businesses. We’re still facing a very challenging economy and businesses continue to struggle to remain competitive and make payroll in the midst of diminishing revenues, well-below-normal business activity and high unemployment,” Jim Roche, BIA president, said in a statement. The full survey is available for downloading from the same page as the statement.

“Now, more than ever, it is crucial to maintain and support business-friendly policies and initiatives in our state.”

Access to financing key to small business growth

Small businesses needs access to financing. That's the key message delivered to President Barack Obama in a Nov. 3 report from the Small Business Financing Forum held earlier in November host by Small Business Administration’s Karen Mills and Treasury Secretary Timothy Geithner.

"With financial institutions tightening lending standards in this recent economic crisis, the small businesses that depend on them for credit have been hit particularly hard.," the report said. "We remain committed to working with Congress and the small business and lending communities to do more to help ensure that much-needed credit is flowing in a responsible way so that small businesses can once again lead the country out of recession and back to prosperity."

Attending the forum were large and small banks, micro-lenders and small business representatives who discussed the current lack of credit for the small business community.

The full report to the president (in PDF format) is available here. You can watch the forum in its entirety here: http://www.sba.gov/smallbusinessforum/index.html

Access to financing continues to be a major issue as the economy and country seeks to fully lift itself out of the recession. According to a Wall Street Journal story, a key provision in past stimulus legislation that was aimed at easing the credit crunch is running out of funds. The funds encouraged hundreds of banks to return to small-business lending, but those funds may now be depleted by the end of December.

The Obama White House has a plan that allows community banks to tap more stimulus funds for small-business lending and increases ceilings on SBA loans. But the problem, according to the Journal article, is that there isn't enough overlap between when the stimulus measures end and when the president’s new plan – scheduled to roll out by the end of the year – kicks in. Advocates worry that there could be a lag of several weeks to a few months.

Energy tax incentives provided for businesses

Businesses should be aware that there are many energy tax incentives provided by the American Recovery and Reinvestment Act. The complete list is available from the Internal Revenue Service. Most of the incentives involve renewable energy sources such as wind and solar. Here are some

examples:

 

 

New Clean Renewable Energy Bonds

Section 1111 increases the amount of funds available to issue new clean renewable energy bonds from the one-time national limit of $800 million to $2.4 billion. These qualified tax credit bonds can be issued to finance certain types of facilities that generate electricity from renewable source.

 

Qualified Energy Conservation Bonds

Section 1112 increases the amount of funds available to issue qualified energy conservation bonds from the one-time national limit of $800 million to $3.2 billion. These qualified tax credit bonds can be issued to finance governmental programs to reduce greenhouse gas emissions and other conservation purposes.

More information on all the provisions of ARRA can be found on the IRS Tax Provisions in the American Recovery and Reinvestment Act of 2009  webpage.

Obama focus turns to small business lending

President Barack Obama is shifting some of his bailout initiatives to small business.

In a speech Wednesday, the president proposed legislation to increase the maximum size of certain Small Business Administration loans. He also called for new steps to provide lower-cost capital to community banks.

He's hearing the message that small business entrepreneurs often can't get financing from banks.

" ... to spur lending to small businesses, it's essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on," he said.

Also, here's a Wall Street Journal story that outlines the president's proposals in more detail.

 

“Green” job development part of New Hampshire’s recently approved state budget

New Hampshire's Governor John Lynch and the Executive Council have approved $5.3 million towards the creation of green jobs in New Hampshire.

The money will act as the soil. How many green jobs actually grow will depend on the spirit of entrepreneurship of Granite State small business owners.

"This initiative is part of our strategy to create opportunities for more green jobs, lower energy costs and a more sustainable energy future for New Hampshire," Lynch said in announcing the plan for projects financed through the Greenhouse Gas Emissions Reduction Fund.

The money is spread around in a variety of ways, according to a  story on Seacoastonline.com

For example, $174,000 will go for classes at Lakes Region Community College and five other campuses across the state to develop and expand the training of energy efficiency contractors and auditors. The funds will be used to offer scholarships of up to 50 percent to ensure the program is affordable.

Two tax provisions for small businesses highlighted in the Recovery Act

The American Recovery and Reinvestment Act of 2009 (ARRA) provides at least one important tax provision that small business owners in New Hampshire should know about. In “Revenue Procedure 2009-26” of the act, taxpayers who are eligible small businesses may carry back a net operating loss for any taxable year after 2007 for 3, 4 or 5 years, instead of the normal 2 years carry-back timeframe. This is done by the taxpayer attaching a statement of the net operating loss to the original income tax return or by claiming the loss on the appropriate tax form (Form 1045, Form 1139 or an amended tax return). Here’s a PDF document that explains this section of the ARRA in more detail.

Secondly, New Hampshire small business owners should be aware of the new or expanded tax benefits available to them for expenditures to reduce energy use or to create new energy sources. This Fact Sheet gives a complete listing of the energy tax provisions in ARRA.

Check in to all the tax provisions of the ARRA here.

And New Hampshire's office of Recovery, which we'll probably be talking about often here in Coffee Break Chat, is online here.