New opportunities: Small business to save on costs

The federal government is working to boost the economy through small business in America. Boston business owners are seeing this recession as a positive change and well-deserved wake-up call.

By Marissa Pendergrass

Earlier in December, President Barack Obama announced new and extended efforts to aid small business.  He detailed the ways in which the American Recovery and Reinvestment Act, better known as the stimulus bill, would continue to help small business and subsequently boost the economy from Main Street to Wall Street. 

"I believe it's worthwhile to create a tax incentive to encourage small businesses to add and keep employees, and I'm going to work with Congress to pass one," Obama said in a speech delivered earlier this month at the Brookings Institution in Washington.

A large portion of the benefits will reach business owners through the Small Business Administration which works to provide loan guarantees for banks who are willing to lend.Loan guarantees lower the level of risk when a bank decides to lend money to a business that may or may not succeed. 

"They used to be 75 and 80 percent (of the total loan amount) and now they are 90 percent," said Boston-based SBA Business Development Specialist David Polatin.  "They've also eliminated the fees for our loans...so that saves thousands of dollars for the small business," he said.

The stimulus bill has provided better loan guarantees, fee reductions and tax incentives for small business since February 2009.  Many of these incentives are set to expire soon and the Obama administration is hoping Congress will act swiftly.

"Well, I believe the money is gone," said Polatin about the amount allocated to small business within the stimulus bill.

Now that the money is drying up, Pres. Obama is looking to extend these incentives for small businesses with hope that it will spur progress for the economy overall.