Tuesday, March 16, 2010

SBIR/IRS collects 4 cents and $202.31 in penalties/SBA Stimulus Funding

I have been asked why Small Business California should get involved in the Small Business Innovation Research[SBIR] debate.

I start with Ms Velazquez statement “Without the participation of venture -backed companies, the SBIR program has become little more than corporate welfare for marginal companies who are unable to secure external market based funding”.

Ms Velazquez is the Chair of the House Small Business Committee and in fairness to her she retracted her statement but still believes VCs should be allowed into the program.

The statement in my mind is an attack on the small businesses around the country and the SBA. Does she also mean that small businesses that get SBA 7a and 504 loans, which are not "external market based programs", are taking corporate welfare and marginal small businesses.

Will these programs only be legitimized if VC’s are allowed to use the program? It should be noted that VC’s that have less than 500 employees can use the SBIR or if they do not control the management of the small business those small businesses can use the SBIR program.

For background information there are 4000 companies getting venture capital in the US and there are 25 million small businesses in the US.

You might find the article by Bob Shallit interesting. It was in the Sacramento Bee. It is a story about a car wash owner who had two IRS agents show up at his business to collect 4 cents the IRS says was due. The penalties on this were $202.31

Click here: Bob Shallit: IRS visits Sacramento carwash in pursuit of 4 cents - Sacramento Business, Housing Market News Sacr

Last week I sent an email regarding HR 4213 which would provide $560 million stimulus funding to continue the 90% guarantees on 7a and 504 SBA loans and waive the fees on those loans.

It should be noted it does not include increasing the size of those loans from $2 million to $5 million. That would be done by passage of HR 4302 which Small Business California has strongly supported.

The provisions of HR4302 are in the Senate jobs bill which Senators Feinstein and Boxer have coauthored. We have been working on getting House members from California to coauthor HR 4302 and to date the Congress people that have signed on are Baca, Speier, Costa, Cardoza, Richardson, Davis and Woolsey.

Please ask your congressman to support HR 4302. If you want a sample letter please let me know. Please also tell me where you are located so we can set the letter up to the person in your district.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

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