Per the Obama campaign, the purposes of this smart Small Business Rescue Plan are "to: help small firms obtain the loans the need to meet day-to-day operating expenses, make important short-term investments, and meet payrolls.""With small businesses responsible for more than two-thirds of new job creation, this plan is vital to stemming job losses and turning our economy around," observed Obama.
It's long overdue that the federal government stepped forward with a plan to support small businesses and owners, after all the billions given to bailout the largest U.S. corporations. The following are summarized specifics of Obama's plan.
BARACK OBAMA'S SMALL BUSINESS EMERGENCY RESCUE PLAN
Emergency SBA Lending Facility for Small Businesses -
Just as was done after 9/11 when businesses were facing economic injury, Obama is calling for the Small Business Administration to directly lend to small businesses that cannot access other sources of capital.
The facility will be run through the Small Business Administration’s (SBA) Disaster Loan Program, which is designed to offer affordable, fixed- rate loans to small firms to meet operating expenses, undertake needed short-term investments, or to refinance debt.
Expanding SBA Guarantees to Encourage Private Lending to Small Businesses -
Obama is calling for expanding the SBA’s key loan guarantee programs – 7(a) and 504 – by temporarily eliminating fees for borrowers and lenders and increasing the guarantee rate on private loans. These steps will give lenders new incentives to lend and help unlock credit for small firms.
Tax Incentives and Tax Cuts for Small Businesses -
Zero capital gains rate for small business - Obama will eliminate all capital gains taxes on investments made in small and start-up businesses. Unlike McCain, who wants to give $200 billion in new tax cuts to the largest and most profitable businesses, Obama wants to cut taxes for the small businesses that create jobs. Temporary tax incentives to encourage investment in jobs -Obama will give small businesses additional incentive to make investments and start creating jobs again by providing temporary business tax incentives through 2009. This will be accomplished, in part, by the extension of IRS code section 179 expense deduction to $250,000 which now expires in December 2008. New tax credits for employee health care costs - The Obama Small Business Health Tax Credit will provide a refundable credit of up to 50% on premiums paid by small businesses on behalf of their employees and to small businesses with no employees.
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