Obama Grants for Small Business

“As president I will continue to do everything in my power to ensure that you have the opportunity to contribute to your community, to our economy and to the future of the United States of America” – President Barack Obama

The recession has had a very bad impact on the economy of not only the United States, but also the rest of the world, with America being hit majorly. However, there are plans set by the federal government to fight the negative impacts of recession and get the money flowing through the economy again. Almost all sectors in the economy were hit by the financial crunch; and small businesses being one of the prominent ones. Before moving on to Obama grants for small business, let us understand the role of small businesses in the economy of the USA.

Recession and Small Businesses

Small businesses play a very important role in the economy of the United States of America. President Barack Obama stated that approximately 70 percent of the new jobs that were created in the last decade came from small businesses. In general, small businesses are believed to provide employment to around 40 percent of US citizens. The government is also encouraging banks and major financial institutions to offer small business loans. Banks are also required to send a report to the Obama administration regarding the handling of short and long term loans. Obama grants for small business are also set up for aiding small businesses contributing to economic growth.

Government Grants for Small Business

If you are thinking about starting a business on a small scale, you can apply for government grants. Note that grants are completely different from loans. Grants are kind of free money which is not required to be repaid; on the other hand, loans need to be repaid normally with some amount of interest rates. You can refer to the US government’s grant website for details on how to apply for free grants for small business.

Obama Grants for Small Business

In addition to government grants, President Obama has initiated a small business stimulus package. This financial package is intended to give a tax relief to troubled small businesses in this economy. It includes financial assistance of about $730 million to the Small Business Administration (SBA). This economy stimulus package is not only useful for small businesses but also medium sized businesses.

One of the main advantages of the small business stimulus package is tax deduction. This allowance enables small businesses to write off a certain amount of equipment purchase in a calender year. However, the equipments whose amount can be written off do not include land and building; but other things such as computers, office necessities, etc. Another benefit is the special depreciation deduction, under which the small businesses can depreciate 50 percent of the cost, during the year the asset was purchased for business. Tax cuts also include an important part in the benefits of the small business stimulus package. Those who run small businesses, can now avail tax cuts after showing miscellaneous expenses. If the shareholders of small publicly owned businesses are holding the shares for over five years, they are eligible to obtain a capital gains tax cut. Special tax credits would be awarded to small businesses who employ people who have been unemployed for over six months. The SBA will also make sure that small businesses avail loans easily and incentives are offered to those who offer loans to these businesses to recover from the crisis.

This are just a few major specifications included in Obama grants for small businesses. The small business economic stimulus package is a much needed step taken by the Obama administration to get America out from the economic recession. Hopefully, this article would have given you the basic idea, as to what Obama grants for small business are all about.

Tags: Business, Grants, Obama, Small