The $787 billion Recovery and Reinvestment Act signed two years back helped small business owners to survive. Some small and closely held companies state that publicly traded companies get bulk of stimulus benefits. This is confirmed in a survey conducted in Feb 2011 by Discover Financial Services and Pepperdine University 2011 Forecast Report.
The stimulus package cover initiatives like ‘Access to Credit’, ‘Tax breaks’ and ‘Government contracts’. ‘Access to credit’ involves elimination of fees of government-backed loans while ensuring that the guarantee level gets raised to 90 % so as to entice lenders. ‘Tax breaks’ created by the stimulus package includes carry-back provisions so as to allow companies apply for current losses to taxes. Stimulus also facilitates for 23 percent of ‘government contracts’ based on data available from Federal Procurement Data System. This month $35 billion had gone to small companies as Government contracts.
The stimulus package that flagged credit-access programs made sure that small businesses get tax breaks, new contracting opportunities open up and micro loans for small businesses become possible. Small businesses when faced with complex options don’t have resources to look for opportunities.
92 % of the stimulus fund excluding tax benefits has been made available by the Recovery Accountability and Transparency Board. The fund being monitored by the Obama administration noticed positive effect for the small business community.
Karen Mills, head of SBA, says, “Tens of thousands of small businesses benefited directly from billions of dollars in Recovery Act loans and federal contracts, as well as from targeted tax breaks.” It is very hard to quantify Recovery Act’s impact. This stimulus package is meant to revive the economy as well as renew initiatives that expired or ran out of the Recovery Act funding.
Extension of four stimulus tax provisions targeting small companies has been made possible under new laws and popular lending program has been revived almost five times.
This article was submitted by Rohit Arora, co-founder of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to