In recent years, it’s been no secret the difficulty small businesses have faced just to stay afloat in the strained economy. Yet, a recent bill signed by the House of Representatives might be exactly what is needed to give these companies a new lease on life.

 

The National Restaurant Association has been watching closely as the Small Business Jobs and Credit Act was first introduced to President Obama as a way of providing assistance to ailing restaurants and other small companies through financial recovery. In laymen terms, the approved bill enacted September 27, 2010, will extend tax reliefs and incentives for renovation purposes as well as to provide access to additional capital. 

 

Under Section 179 of the tax code, businesses are now permitted to write off $500,000 of capital expenses as opposed to the current $250,000, through 2011. “That means restaurant operators could write off $500,000 of equipment costs, such as new point-of-sales systems the year they bought the equipment, rather than recovering all of the cost over a multi-year depreciation schedule”, according to The National Restaurant Association. In addition, as part of the proposed $500,000 limit, a restaurateur can expense $250,000 of the improvement costs the same year they were completed or purchased, through December, 2011.

 

The Small Business Jobs and Credit Act will also provide incentives to small, local banks who provide capital to small businesses by way of a proposed $30 billion Small Business Lending Fund. The bill includes the expansion of SBA, or Small Business Administration loans, by increasing loan amounts from $2 million to $5 million while reducing or even eliminating the fees incurred when applying for them, through 2010.