AB Newsletter March 2009

  
     
March 02, 2009

AB Newsletter -- 3/2009

News for Accredited Businesses

Better Business Bureau Serving Central Oklahoma
March 2009


QUICK BITS....With all the news about the government’s stimulus package and government bailouts of various industries, it’s no surprise that con men are creating their own spin on the news to create a financial stimulus of their own. Bogus grants and home loans are cropping up across the country, and unwary consumers, eager to grab a piece of the pie, are paying hefty up front fees for everything from guaranteed research grants and federal funding for all sorts of schemes. The government may provide legitimate grants for some individuals, but those programs are generally administered through government offices and existing programs. Those who have earned grants don’t generally pay big fees to register to take part in those programs. Any grant, however, will require a lot of paperwork to prove qualifications and need. No one in the government contacts individuals to notify them that they have “automatically qualified” for a grant, then require up front money to assure a check. Thousands of people across the United States report such contacts, and many have fallen for the scams…..Tough financial times are making “Cash for Gold” businesses popular. The ads on TV make it sound pretty simple. You contact the company for an insured envelope, deposit your unwanted gold and jewelry into the envelope and you’ll get a check by return mail for the scrap value of your jewelry. If you’re happy with the money, cash the check. If not, return the check and your jewelry will be returned to you. People question the validity of the claims that the dealers will pay top dollar for your gold and silver, though. Some unscientific studies have been conducted through which a selection of jewelry is taken to a pawn shop and given an estimated value there, and the same pile of jewelery earns much less when sent to one of the major advertisers. “You have to understand that the TV advertisers are paying the scrap value for the jewelry,” a local high-volume purchaser explained. “It’s the difference between selling your car to a scrap yard or selling it on your front lawn.” Selling your jewelry for scrap value may be quick and easy, but it’s not necessarily the best value for your money….Does your business use a landscape service to tend to your property? Remember to renegotiate your monthly contracts before you sign the deal, and look for loopholes that would allow your landscaper to boost prices if gasoline or other costs go up this summer. With many homeowners cutting back on services and tightening their budgets, it might be an ideal time to talk a landscaper into a better deal or more services on your property.

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Smart Small Businesses Will Benefit from Stimulus Package.

On February 17, President Obama signed into law the American Recovery and Reinvestment Act—an economic stimulus plan totaling $787 billion in federal spending and tax cuts. For small business owners who don’t want to wade through the actual document, Better Business Bureau offers a summary on some items in the stimulus package that might benefit them.

The main goal of the stimulus package is to spur job creation—Congressional Budget Office estimates that employment could increase by as much as 3.6 million jobs by 2010—with the concept being that more jobs will provide additional assistance to struggling consumers and businesses. For business owners, this means increased federal spending on projects—such as funding for the U.S. Small Business Administration to assist businesses with financing needs—and small businesses can also look forward to some tax breaks.

The stimulus package is addressing the troubled economy from many angles, and while most of us will receive benefits as an individual through tax breaks, there are perks for business owners as well. Experts agree that a healthy job market goes hand-in-hand with a healthy economy, and frankly, many businesses need the help immediately to stem the tide of employee lay offs.

Following are examples of how the American Recovery and Reinvestment Act will benefit small businesses nationwide:

Small Business Financing
The U.S. Small Business Administration will receive $730 million from the stimulus package—more than doubling their operating budget from 2008— to help assist businesses with financing.

According to a press release from the SBA, funds will be divided among many programs including:

• $375 million for temporary fee reductions or eliminations on SBA loans, and for increased SBA guaranteed shares, up to 90 percent for some loans;

• $255 million for a new loan program to help small businesses meet existing debt payments; and

• $30 million to expand SBA's Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders.

For complete details on how the U.S. Small Business Administration will use the new funding from the stimulus package and how small businesses can benefit, go to www.sba.gov.

Small Business Tax Breaks
Qualified Property Expense Increased. The ceiling on the Section 179 tax break—allowing companies to expense qualified assets in the first year of service—has been increased from $133,000 to $250,000 in the first year that qualifying assets are placed in service.

Bonus Depreciation Extended. Originally instituted in 2008, businesses will again be able to take an additional bonus depreciation expense of up to 50 percent of the cost of newly acquired fixed assets.

Loss Carry Back Expanded. Only available to companies with sales less than $15 million, a business which incurs operating losses in tax years ending after December 31, 2007, can offset such losses against income earned in previous years and obtain a refund on previously paid taxes. Losses can now be carried back for five years instead of two.

• Vehicle Depreciation Expense Increased. The depreciation expense for passenger vehicles in their first year of service—limited only to those placed into service in 2009—was increased from $2,960 to $10,960. The depreciation expense for light trucks and vans increased from $3,160 to $11,160.

Industry and State-Specific Benefits
The stimulus package will provide state and local governments with billions of dollars to fund assistance programs and infrastructure projects, such as road construction or mass transit development. More details on how state-specific funding will be dispersed and which projects will benefit will be announced soon.

Green businesses will also see a benefit, including $20 billion dollars set aside for companies that produce solar panels and wind turbines, $6 billion in loan guarantees for renewable energy projects, and a 30 percent tax break for investments in wind and solar energy.

Additional information on the stimulus package can be found at www.recovery.gov.

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