Small Business Jobs Act to Benefit Auto Dealers
WASHINGTON (Sept. 28, 2010) - President Obama yesterday signed the Small Business Jobs Act which, among other things, contains the framework for a new SBA Dealer Floorplan Program (DFP). NADA is working with the SBA to develop the new floorplan program which is expected to be rolled out before year-end.
Eligible loan amounts will be from $500,000 to $5 million with a 100% advance rate, a five-year term, reduced fees, and guarantees up to 75% (other 7(a) loans have guarantees up to 90%). The Act also sets a new maximum alternative size standard of $15 million net worth and $5 million in net income as measured over two years.
In addition to a new Small Business Lending Fund and a new State Small Business Credit Initiative, the Act:
- Eliminates capital gains taxes on investments held for five years for the rest of 2010.
- Increases to $500,000 the amount of capital investment businesses may immediately write off in 2010 and 2011, and raises to $2 million the level at which the write-off phases out.
- Extends the provision for 50% “bonus depreciation” through 2010, thus accelerating the rate at which capital expenditures can be deducted.
- Allows cell phone use to be deducted without burdensome documentation.
- Allows certain small businesses to “carry back” general business credits to offset five years of taxes, while also allowing these credits to offset the Alternative Minimum Tax.
- Changes the penalty for failing to report certain tax transactions from a fixed dollar amount to a percentage of the tax benefits from the transaction.