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Obama Signs Small Business Bill Into Law

President Obama signed the small business jobs bill today in Washington, D.C. The legislation includes $12 billion in tax breaks and creates a $30 billion fund to expand credit access for small businesses.

Congress voted earlier this month along party lines to approve a $42 billion bill to aid small businesses.

Though some owners see a devil lurking in the details, the legislation has won widespread support from the small-business community. Here’s a quick look at key provisions of the bill.

The Small Business Lending Fund would make up to $30 billion in capital available to financially sound banks that have less than $10 billion in assets on their books. The goal is to encourage them to lend to small businesses. If participating banks increased lending to small businesses by 10 percent over the previous year, they would pay as little as 1 percent on the capital they received from the fund.

States as well as business owners would benefit from the State Small Business Credit Initiative. This initiative would help states with successful credit programs that are facing cutbacks, by making them eligible for continued funding. The bill would create a $10 billion pool to extend more credit to creditworthy small businesses and manufacturers. To gain access to the pool, states would need to show there had been at least $10 in new funding for every dollar of the federal infusion.

The National Small Business Association (NSBA), a 150,000-member nonprofit based in Washington, D.C., said the bill will provide particular relief to the self-employed.

“NSBA applauds the House’s prompt approval of the Small Business Jobs Act today,” the group said last week. “ Offering various tax incentives, a much-needed small business lending fund and numerous other pro-small-business provisions,  the legislation stands to be of great assistance to America’s struggling small businesses. Among the various provisions is the incredibly-important but less-talked-about language that will make health insurance more affordable for the nation’s self-employed.”

“Seemingly absent in discussions over this bill is the fact that it will end a major tax inequity which forces the self-employed to pay an additional 15.3 percent tax on the cost of their health insurance,” said NSBA President and CEO Todd McCracken in a statement. “For years, this unfair penalty has been a thorn in the sides of millions of self-employed individuals, and we applaud its inclusion in this bill.”

The Small Business Jobs Act will allow self-employed individuals to fully deduct the cost of their health insurance from their self-employment taxes for 2010, according to the NSBA. "

"Currently, self-employed individuals are prohibited from fully deducting the cost of their health insurance from their self-employment taxes, resulting in an additional tax that no other worker or business owner is forced to pay," McCracken said.