“One of the key provisions of the Small Business Lending Act, which we passed last month and the President has now signed, is the State Small Business Credit Initiative,” Sablan explained.
“The law provides federal funds to States that partner with private lenders to extend greater credit to small businesses.
“For purposes of this law the Northern Mariana Islands is treated as a state. And the amount of funding we are allocated is the same as 28 other States.
“But, of course, the commonwealth has to decide to take advantage of this opportunity to encourage economic development and small business expansion.”
States are required to demonstrate a minimum “bang for the buck” of $10 in new private lending for every $1 in federal funding.
There is also a new $30 billion Small Business Lending Fund to encourage community banks to provide small business loans. Any community bank that is a member of the Federal Deposit Insurance Corporation qualifies to participate.
In addition, the Small Business Lending Act, extends and expands existing Small Business Administration low-cost loans. The SBA loan participation may now be 90 percent, up from the previous limit of 75 percent. And the cap on SBA loans is raised from $1.5 million to $4.5 million.
Finally, there are 8 tax incentives to further encourage small business development. The law provides for the existing 100 percent capital-gains tax relief to extend to January 1, 2012. Sole proprietors may also continue to write off health-insurance premiums as business expenses in 2010.
Other tax incentives include an increase in the qualifying property cap for purposes of expense deductions from $800,000 to $2 million. And the new law treats computer software as qualified property for purposes of expense deduction.
