Tax Credit Spurs Small Business Hiring

Online, November 18, 2010 (Newswire.com) - President Obama's $33 billion plan to provide incentives for small businesses to hire more workers includes a $5,000 tax credit for small businesses making new hires as well as a reimbursement for the extra Social Security taxes added to their payroll by the new hires. "It is time to put America back to work," he said, as he toured a factory in Baltimore. By some analyst's estimates, more than one million small businesses are expected to add new positions to take advantage of the new program. Some analysts have predicted an increase in small business loans as a collateral result of the new tax credits.

The program may be showing some results, but its still far too early to know for sure what the total economic impact of the legislation will be. For the first week of June, the Labor Department reported that the number of U.S. workers filing new claims for unemployment benefits dropped slightly, while continuing claims fell to the lowest level in 18 months. Although this represents a very small decrease in the overall rate of unemployment, it was in line with many economic analysts estimates for what should be happening with a slow recovery. The Labor Department report indicated that while a total of 431,000 jobs were created during the month of May, many of those were due to temporary hiring for the 2010 Census and only 41,000, or 9.5 percent came from the private sector. The boost in hiring reduced the overall unemployment rate to 9.7%. Not all areas of the country experienced a drop in claims - Florida remains among the states with an increase in unemployment claims - mainly due to layoffs in the construction, trade, service, manufacturing and agricultural sectors.

Job creation has a long way to go if it is to erase the average unemployment rate of 9.7% nationwide. It has been forecast that over one-million small businesses will add new positions in coming few months - as they take advantage of a newly established $5,000 tax credit.

President Obama asserted that the economy continues to improve and contended that his economic stimulus legislation is having a positive effect. He heaped praise on businesses, particularly small business owners who are "... the true engine of job growth in this country." Obama remained optimistic that, despite the damage done to the labor market during the recession, the economy is now poised to start adding the jobs people need.

The millions on the unemployment rolls hope that he is right. Small business loans may help small business owners finance new hires in anticipation of a strong economic recovery. Find out if you can pre-qualify for small business loans or personal loans of $10,000 to $5 Million. Click here to learn more.