In the passing of the 2009 American Recovery and Reinvestment Act, otherwise known as the Stimulus Bill, the House of Representatives, Senate, and President Obama called for strong actions to relieve much of the financial pressure put upon small business owners. Many new initiatives, as well as the continuance of previously adapted initiatives, were developed to help encourage continual growth among the working class and small business community, including the struggling food industry. At the food production level, the new Stimulus Bill passed initiatives to strengthen the development and growth of local farming industries across the nation. Thanks to the new bill, additional grants and loans of $150 million have been set aside to support farms and rural business development. Restaurants everywhere will be able to benefit from stronger local farming communities—especially restaurants who make it a priority to buy from local farms.
Other initiatives of the 2009 Stimulus Bill supporting restaurant owners include:
Restaurant owners will be happy to learn that an additional $630 million has been allocated for the use of loans to small businesses. Many restaurants saw their profits take a nosedive when consumers started tightening their purse strings. Additional loan money can help alleviate the strain of food and equipment purchases during difficult economic times.
In addition to a growth in loan funds, the stimulus bill also authorizes the Small Business Administration to temporarily eliminate or reduce fees for many of their loan-guarantee programs—programs developed to insure banks against small business loan defaults—increasing the percentage of loans available for guarantee by 90%.
The bill also includes tax changes to help assist the small business owner. In 2008, Congress temporarily increased the amount that a business can write off for yearly equipment and other capital investments. In previous years, the limit was capped at $125,000. The 2009 stimulus bill will keep the temporary increase, extending the limit to $250,000.
Small businesses will now be able to claim business tax credits on past profits dating back five years, instead of the previous two-year limit.
Continuing a previously adopted initiative, the Stimulus Bill also extends the Work Opportunity Tax Credit, allowing employers to claim tax credits for "targeted" employees. The previous initiative includes a $2,400 tax credit for each new adult hire, a $1,200 tax credit for each new summer youth hire, a $4,800 tax credit for each new disabled veteran hire, and a $9,000 tax credit for each new long-term family assistance recipient hired over a two-year period. The 2009 Stimulus Bill includes a $2,400 tax credit for hiring disconnected youth as well.
With so many initiatives directed at small business owners, the American Recovery and Reinvestment Act can hopefully give the restaurant and beverage industry the boost it needs to excel in 2009!
