Laws & Legislation

 

04 12 2013

04 12 2013

New Tax Credit Proposed for Small Businesses

Many small business owners seek funding through a small business loan so they may build their company and hire employees. Now, small business owners who hired workers or gave a raise to their team last year may benefit from a new tax break, if recent budget proposals from the Obama administration are passed. The president recently proposed to offer tax relief to small businesses as part of his $3.8 trillion budget plan, according to the Associated Press.

The tax credit would be available to businesses that paid less than $20 million in wages last year, and participants would get a one-time 10 percent credit on the sum the owner paid to new employees or gave in raises to current workers. An organization that grew its payroll by $2 million, for instance, would see a $200,000 income tax credit. The tax credit would have a limit of $5 million.

The goal of this incentive is to encourage hiring and improve staff members’ pay to boost the economy. Government officials also expect the proposal to streamline the application process for Small Business Administration (SBA) loans as well as strive to bolster the number of lenders that work with the SBA. The president’s budget would allocate $810 million in funds to the SBA, a 12 percent decline from the $109 million of last year’s budget, according to ABC News.

The budget plan also underscored several other components that would affect small businesses. For example, SBA 7(a) loan fees will be waived for loans under $150,000, and small business owners will once again be allowed to refinance 504 loans – financing typically used to acquire or expand property.

Analysts are uncertain whether this proposal will be able to win over Republicans in Congress, the New York Times reported.

Spokesman for the National Federation of Independent Business, Kevan Chapman, said in an e-mail that the tax credit may not be “a big help to small businesses that are struggling or treading water.”

Small business owners who need a small business loan or merchant cash advance to help with hiring employees or raising current workers’ pay should contact National Funding, a leader in the industry, about securing the appropriate financing.

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US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

 

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I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

 

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