WAYNE T. PRICE

FLORIDA TODAY

President Barack Obama on Monday unveiled a $15 billion package to assist small businesses, a sector he called "the heart of the American economy."

The aid package reduces lending fees, eases the tax burden and boosts bank liquidity to allow more access to credit. The administration also said the 21 largest banks receiving government money must report monthly on how much lending they do to small businesses.

Florida has about 1.9 million small businesses, according to the Small Business Administration's Office of Advocacy.

Supporting and strengthening small businesses is essential for boosting the overall economy, Obama said, noting that they are responsible for half of all private sector jobs. In the past decade, small businesses have created roughly 70 percent of all new jobs in the U.S.

"But today, too many entrepreneurs can't access the capital to start, operate, or grow their business," Obama said. "Too many dreams are being deferred or denied by a form letter canceling a line of credit."

While the aid's impact on Space Coast small businesses remains to be seen, a number of business owners said Monday they are glad that the federal government is showing them some of the same attention it has focused on the nation's banks and automobile manufacturers.

Dennis Meehan, owner of Meehans' Office Products in Melbourne, said plans to assist small business might be a more effective way to stimulate the economy than some of the larger measures the Obama administration has taken so far to jumpstart the economy.

"I'm glad they're looking to help small business," he said.

Also on Monday, Treasury Secretary Timothy Geithner ordered the Internal Revenue Service to issue a series of new rules for temporary but significant tax breaks, meaning that small businesses:

--- That earn up to $15 million will be allowed to claim losses for the past five years in the current tax year;

--- May write off up to $250,000 in investments this year;

--- Can reduce estimated tax payments to 90 percent of the previous year's filing;

--- Are allowed to take larger depreciation deductions within the first year of property purchases;

--- Will see 75 percent of capital gains excluded for those who invest in small businesses.

In his comments, Obama called small businesses "one of the biggest drivers of employment that we have." He said he had pressed his economic team to specifically help owners of small businesses and get credit flowing to them again, and he called the newest initiatives only a first step.

The measures includes $730 million from the stimulus plan to immediately reduce small-business lending fees and to increase the government guarantee on some Small Business Administration loans to 90 percent. The government also is taking aggressive steps to boost bank liquidity with up to $15 billion aimed at unfreezing the secondary credit market.

Often primary bank lenders will seek to sell the Small Business Association loans in the secondary market, allowing them to use the proceeds of the sale to make new loans to other small business owners, but skittish investors have been staying away. Under the administration's initiative, the government will step in to buy these loans to help unlock the frozen credit market.

While the SBA typically guarantees $20 billion in loans annually, new lending this year is on track to fall below $10 billion, according to the administration.

Mike Sirounis a partner with Melbourne-based Harbor City Business Brokers, said it appears Obama is attempting to put more capital in the hands of small business owners to keep their operations running and help them avoid cash-flow problems. And if small business owners' taxes are being reduced, that's a plus, Sirounis said.

"It's always a good idea to reduce taxes," he said. The Associated Press contributed to this report.

Contact Price at 242-3658 or wprice@floridatoday.com.