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Highlands Today

Aid Plan Announced For Small Business Owners

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By LAURA NESBITT

Highlands Today

Published: March 17, 2009

SEBRING - The message for many small business owners wondering how they will be affected by a White House aid plan for small business owners announced Monday is to wait - for now.

President Barack Obama announced a series of moves to get credit flowing to small businesses.

The measures include boosting bank liquidity with up to $15 billion aimed at unfreezing the secondary credit market, reducing lending fees and increasing loan guarantees, and easing the tax burden. The administration also announced that the 21 largest banks receiving government money must report monthly on how much lending they do to small businesses.

The goal is to help those businesses make payroll, buy equipment and maintain or even expand employment as the nation's economy is bleeding jobs.

"One of the things that we've been monitoring here is what's going to happen with the banks - right now that's crucial to small businesses," said Small Business Development Center Interim Director Eileen Rodriguez.

The agency offers free one-on-one counseling to small business owners and provides them with technical assistance and seminars. They are funded through the federal Small Business Administration, Rodriguez said.

She said it's difficult right now for many small businesses to get a loan from a bank.

"They see they're hampered," Rodriguez said.

"Where am I going to get the money to make payroll. It makes it very difficult for them to continue to do business."

Rodriguez said she is waiting to hear more specifics about the plan, and expects that it may be several weeks "before we hear something definitive."

"I understand that everyone needs help and they need it now," Rodriguez said.

"Unfortunately it does take time. We just don't have the answers. Just tell them to have patience."

But that might be difficult for Michael Wooley, co-owner of Wooley Sheds, a family-owned business in Sebring.

"Where's the money, and how fast can we get it?" said Wooley who has had to get a second job.

From 2006 until now, revenue for Wooley's business has gone down 75 percent, which he attributes to consumer confidence and the economy.

"No one is spending any more," Wooley said.

"If they'd let go of the dollar, a lot of small businesses would prosper. If people would spend money, the trickle down effect would help."
Wooley Sheds builds and manufactures custom-built sheds. They have used customer financing to stay open. Wooley has closed one store and laid off 50 percent of the employees at his factory.

"We're barely keeping our head above water right now," Wooley said.

"If we had a loan that would float us for the next 12 to 18 months then we'd be fine. But how long can we keep barely meeting our expenses? How long can we go?"

Treasury Secretary Timothy Geithner has also ordered the Internal Revenue Service to issue a series of new rules for temporary but significant tax breaks, meaning that small businesses:

•That earn up to $15 million will be allowed to claim losses for the past five years in the current tax year;

•May write off up to $250,000 in investments this year.

•Can reduce estimated tax payments to 90 percent of the previous year's filing.

•Are allowed to take larger depreciation deductions within the first year of property purchases.

•And will see 75 percent of capital gains excluded for those who invest in small businesses.

The administration plan includes $730 million from the stimulus package to immediately reduce small-business lending fees and to increase the government guarantee on some Small Business Administration loans to 90 percent.

The Associated Press contributed to the report.

Highlands Today reporter Laura Nesbitt can be reached at (863) 386-5857 or lnesbitt@highlandstoday.com

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