New data from payroll companies suggests that small businesses are slowly beginning to add employees, even as the most recent Labor Department report shows the unemployment rate held steady at just under 10 percent. Some economists believe these numbers indicate the recession is bottoming out.

Based on data gathered from Intuit’s online payroll service, companies with less than 20 employees have added jobs since June 2009, said Business Week Additionally, data from SurePayroll shows the average paycheck for workers at businesses with fewer than 100 employees has stabilized, said Business Week.

President Obama has put forth a number of measures intended to get people back to work, including tax incentives for businesses that hire new employees and pushing banks to free up more credit for small businesses.

John Bishop, a labor economist at Cornell University, told Business Week that temporary incentives like tax credits could create more than 2 million jobs in a year.
“It potentially has a huge effect, and small business would be the primary beneficiary of that,” Bishop told Business Week.

Tax time can be scary for small business owners. If you’re a busy entrepreneur and haven’t kept the best accounting records throughout the year, there’s still time to save yourself some grief and make next year a little easier. Also keep in mind that if you don’t have a good handle on your business’s finances, the more likely it is to fail.

Associated Press business columnist Joyce Rosenberg has these tax tips for small business owners:

* Get organized. Invest in accounting software that will keep you organize. You can input information from all those receipts and invoices into the program and send a file to your accountant at the beginning of the year, saving yourself a whole lot of time and grief.

* Hire a bookkeeper. If you can’t afford to hire a bookkeeper, consider getting an intern, such as a student studying accounting at a local college and have them set up a ledger system. Also consider putting all business expenses on one credit card.

* Read your mail. This sounds obvious, but again some business owners are so busy, sorting through mail can be a chore that gets pushed to the back burner. Not opening important mail from the IRS can lead to penalties and fees down the road.

* Listen to your CPA. Start talking to your accountant now. If you don’t understand what he is saying, ask. Remember, there are no stupid questions, only stupid mistakes.

Despite pressure from the Obama administration to pump up small business lending, the country’s biggest banks cut small business lending by $1 billion in November, according to a Treasury report released Jan. 15.

The 22 banks that got the most help from the Treasury’s bailout programs have cut their small business loan balances $12.5 billion since April, when the Treasury began requiring them to file monthly reports, according to CNNMoney.com.

Bankers defend the cuts, saying small business loans are too risky and fewer entrepreneurs are seeking credit because of the recession.
But many small business owners say lending standards have grown more restrictive the past three years, and a report from the Federal Reserve backs that up, said CNNMoney.com.

Earnings at most big banks have turned around. JPMorgan, for example, reported earnings of $3.3 billion in the last quarter of 2009.

A number of politicians including the president have railed against bank executives for their unwillingness to free up credit while continuing to dole out huge employee bonuses.

Rep. Peter Welch, D-Vt., introduced a bill calling for a 50 percent tax on bonus compensation in excess of $50,000 at banks that received government bailout money. All revenue raised from the tax would go directly to the Small Business Administration to fund a new direct lending program, said CNNMoney.com.

Several small business owners met in Washington last week with Treasury Secretary Timothy Geithner and Small Business Administration chief Karen Mills to talk about their struggles during the worst economic crisis since the Great Depression.

The business owners discussed trouble getting credit and government regulations they said are hampering their operations, among other topics.

Woody Hall, the chairman and president of Diversapack, a film manufacturing company operating in several states, said the credit crunch is hampering his company’s growth. “We just opened up a new manufacturing facility employing 50 employees and expected to grow to 150 over the next few years. We basically had no bank financing,” Hall said, according to the Washington Post.

Former chief economist for the World Bank Joseph Stiglitz said exorbitant credit card fees are hurting small businesses and the government needs to address that. According to the Washington Post, Stiglitz said the exchange fee on purchases is “a 2 percent tax on all small businesses. A lot of them have small margins. Imagine you’re got a small margin and you’re giving half of that to banks on exchange fees — how aggravating.”

Geithner acknowledged the government needs to find a way to compel banks to extend more loans to small businesses.

The administration plans to expand a $5 billion tax-credit program intended to aid economically distressed communities across the country, Treasury Secretary Timothy Geithner announced Friday.

The president’s 2010 budget plan doubles funding for the Community Development Financial Institutions fund, which helps provide loans to small businesses and consumers in disadvantaged communities that lack access to affordable credit, reported the Wall Street Journal.

The tax credit program, funded by the economic stimulus package, will reward private sector companies that invest in energy, education, health care and manufacturing projects to create jobs in low-income areas. The credit would cover 39 percent of the cost of the investment over a seven-year period.

Recognizing that many small businesses are still struggling to secure credit, President Barack Obama announced a plan that would encourage community banks to issue more small business loans.

Under the plan, community banks with under $1 billion in assets would be eligible for lower-cost capital if they submit a small business lending plan and document their lending in quarterly reports, said the White House. If approved, the banks would pay the government a 3 percent dividend instead of 5 percent.

Obama also said he will seek legislation raising the limits for Small Business Administration loans from $2 million to $5 million and as much as $5.5 million for manufacturing, according to Bloomberg News.

The president said these steps will lead to “more jobs, more growth, and a stronger economic recovery.”

Some legislators and small business owners have complained that the administration’s recovery efforts have focused too narrowly on bailing out big banks.

Obama asked Treasury Secretary Timothy Geithner and SBA administrator Karen Mills, to gather a group of regulators, congressional leaders, lenders, and small business owners “to determine what additional steps we can take to get credit flowing to small businesses that want to expand,” said Bloomberg News.

Top economists see the beginning of an economic recovery but say high unemployment will continue through 2010, according to a July survey of 49 economists by USAToday.

The majority of the economists surveyed predicted the jobless rate will top 10 percent later this year. Unemployment figures released on Aug. 7 showed a slight decrease of 9.4 percent in July from 9.5 percent in June – the first time unemployment dipped in 15 months.

Economists told USAToday recovery will be “anemic” due in large part to massive consumer debt and a tight credit market. They did cite a few bright spots, though, with the majority saying existing home sales have bottomed out, consumer spending stabilized and CEO confidence growing.