The fiscal cliff was narrowly avoided, but what does the deal mean for small businesses? For individuals making under $400,000 or couples making less than $450,000 jointly, the tax brackets do not change. However, small business owners who pay taxes on business profits as part of their personal tax return, will face changes. The tax rate will increase from 35% to nearly 40%, thereby placing a financial burden on those that we consider to be America's backbone. In addition, those businesses employing more than 50 individuals, will also be responsible for the cost of healthcare. Hopefully this burden does not inhibit entrepreneurs from starting businessses, or those that are already in business, from succeeding.
The SBA 504, along with other finance programs, can alleviate some of the pains of the increasing tax through the structure of the loan. With low equity requirements (20% at the highest), competitively low interest rates, and long terms on every loan, the SBA 504 Loan Program frees up capital for small businesses to utilize elsewhere - such as taxes and healthcare costs.