Small businesses are crucial to the overall health of the American economy and are responsible for the majority of new hiring. Because this sector is so important, but often overlooked by small business lenders, the U.S. Small Business Administration (SBA) and federal government are working to ease their capital strains through a variety of measures.
In fact, the Obama administration has passed 18 tax cuts for small businesses, along with other measures to improve their cash flow and make it easier for them to invest in supplies and hire more workers.
Some new provisions that were recently announced include an extension of Section 179, which would allow small businesses to write off $250,000 in new equipment costs throughout 2013. Another measure would speed up the payment process for government contracts, while a separate proposition aims to lift the cap on the SBA Small Loan Advantage program from $250,000 to $350,000.
"If we have more time to pay taxes and get quicker payment from the government, we have better cash flow," Ray Sjolseth, president of Seesmart, a direct contractor and a subcontractor for the government, told The Washington Post.
On top of that, the tax breaks for equipment costs "allow us (to) make some purchases that normally we might not make," Sjolseth added.
If small businesses need new machinery, but don't have the funds available for a large upfront payment, they might consider equipment leasing. To learn more about this flexible alternative, independent owners can contact an advisor from another resource, such as Five Point Capital.
