Economic Stimulus Impacts Small Business

Jan 25, 2008

Contact:
Molly Brogan
202-552-2904
press@nsba.biz

Elements of Bipartisan Economic Agreement Could Stimulate Small Business Growth

Washington, D.C. — The National Small Business Association applauds the efforts by the Bush administration and House leadership to invigorate the slowing economy. Beyond the key small-business tax incentives, the proposed economic stimulus agreement would provide small-business owners much needed relief in their search for affordable capital through the increased limits for “conforming” loans from the Federal Housing Administration (FHA), and Fannie Mae and Freddie Mac.

At first glance, the economic stimulus package appeals to small business through targeted tax incentives. However, the proposal to allow increased loan limits for the FHA, and Fannie Mae and Freddie Mac also could prove to be widely beneficial to small-business owners. The increased loan limits will enable banks to sell higher dollar amount mortgage loans to the secondary market, leading to lower interest rates for many of these loans. Perhaps most important, however, is that small-business owners, many of whom leverage their business finances using private assets, will be able to get increased financing based on the increased value of their homes due to the higher allowable loan limits.

“Interestingly, one piece of this proposal that won’t reduce federal revenues is also a piece that stands to benefit start-up small-businesses the most through lower interest rates and greater availability of loans,” stated NSBA President Todd McCracken

In addition to the lending implications, the economic stimulus package would give small businesses an immediate increase in Section 179 expensing up to $250,000, a critical tool in encouraging small-business owners to grow their companies and key tax priority for NSBA. Furthermore, restoring the bonus-depreciation write-off—allowing firms to deduct 50 percent of their capital investments—will be a significant help to businesses looking to purchase manufacturing facilities and other capital equipment.

Since 1937, NSBA has advocated on behalf of America’s entrepreneurs. Reaching more than 150,000 small businesses, NSBA is proud to be the first national small-business advocacy organization in the United States.


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