The massive $789 billion stimulus package just passed by Congress contains plenty of cash to shore up ailing banks, but little in the way of direct spending for small businesses, a Feb. 11 report by The Associated Press said.
“The plan does extend two provisions of 2008’s economic stimulus bill that allow small businesses to take a bigger upfront deduction for the cost of new equipment,” the AP said. “But companies whose sales are hurting may be reluctant to make big expenditures, putting those tax breaks out of reach.”
Raymond Keating, chief economist with the Small Business & Entrepreneurship Council, told the AP small business owners needed something better. “We need incentives in the private sector for people to take risks and expand business. Unfortunately, there’s very little of that in this package,” he said.
The savior for small businesses, economists say, will come when consumers start dusting off their wallets.
“The best thing to happen to small business is if customers come in,” William Dunkelberg, chief economist with the National Federation of Independent Business, a Washington-based small business advocacy group, told the AP.
The big problem with the economy now is “the guy whose job is not at risk has been scared into not spending,” he said, adding the recession’s grip will ease when they start buying again.
In the meantime, small business advocates say extending the Section 179 and bonus depreciation provisions into 2010 because makes more sense because it is unlikely small businesses will be investing much in the near term.
This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to firstname.lastname@example.org.