March 2011 Newsletter

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Positive Changes for Small Business!
It’s that time of year – again. Corporate tax returns are due March 15th. As Kansas City Business Brokers, we are continually asked to provide tax and accounting advice, which we happily refer to our experienced and knowledgeable partners. Tax laws are too complicated, and some might say a little illogical, for us to give advice. However, recently there was some good news for entrepreneurs in the Small Business Jobs Act relating to taxes and loan programs that we are more than willing to forward on.

Check out the SBA website for details of the Act. Some of the more interesting benefits for small business are (excerpts from the White House blog):

  • A More Than Doubling of the Maximum Loan Size for The Largest SBA Programs: The bill will permanently raise the maximum size for SBA’s two largest loan programs, increasing the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing related loan from $4 million to $5.5 million.  In addition, it will temporarily increase the maximum loan size for SBA Express loans from $350,000 to $1 million.
  • A New $30 Billion Small Business Lending Fund:The bill would establish a new $30 billion Small Business Lending Fund which – by providing capital to small banks with incentives to increase small business lending – could support several multiples of that amount in new credit.
  • An Initiative to Strengthen Innovative State Small Business Programs – Supporting Over $15 Billion in Lending:The bill will support at least $15 billion in small business lending through a new State Small Business Credit Initiative, strengthening state small business programs that leverage private-sector lenders to extend additional credit – many of which have been forced to cut back due to budget cuts.
  • New Small Business Tax Cuts – Effective Today, Providing Immediate Incentives to Invest:
    • Extension and Expansion of Small Businesses’ Ability to Immediately Expense Capital Investments: The bill increases for 2010 and 2011 the amount of investments that businesses would be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million. Prior to the passage of the bill, the expensing limit would have been $250,000 this year, and only $25,000 next year.  
    • Extension of 50% Bonus Depreciation
    • Tax Relief and Simplification for Cell Phone Deductions: The bill changes rules so that the use of cell phones can be deducted without burdensome extra documentation – making it easier for virtually every small business in America to receive deductions that they are entitled to,beginning on their taxes for this year.
    • Limitations on Penalties for Errors in Tax Reporting That Disproportionately Affect Small Business:The bill would change, beginning this year, the penalty for failing to report certain tax transactions from a fixed dollar amount – which was criticized for imposing a disproportionately large penalty on small businesses in certain circumstances – to a percentage of the tax benefits from the transaction.

An area that has been of great concern for those wanting to buy a business in Kansas City is the ability to get acquisition loans approved. Now that the government has approved the enhancement of loan programs, we anticipate that even more banks will start to slowly re-enter the market for small businesses.

We look forward to assisting in your business sale or acquisition plans.  Call and talk to an Apex Business Advisor today!

Doug Hubler
President

“Professionals in Business Acquisitions and Sales”