The administration’s Certified Development Company (504) lending program traditionally provides long-term, fixed-rate financing for assets like real estate, heavy machinery or other improvements. But as of last Wednesday, it now permanently allows small business owners to refinance such debt, as long as it is used for expansion purposes.

“This is one more piece of the Recovery Act that is going to have a direct impact and put more money in the hands of small business owners just when they need it most,” said Karen Gordon Mills, head of the Small Business Administration, in a statement.

But the timing of such changes is a bit off, according to experts and analysts of 504 lending programs. They say that few businesses can currently afford to expand, to leave such good intentions unused.

According to Scott Shane, professor of entrepreneurial studies at Case Western Reserve University, few small business owners may also feel up to the task. In May 2009, just 5 percent of business owners felt that the following three months would be “a good time to expand.”

This is a drop of 11 percent from nearly two years ago, according to data Shane cumulated from the National Federation of Independent Business. And while positive feelings unexpectedly spiked last September, overall trends speak volumes about the confidence level of such business owners.

“Small business owners’ views of the expansion-potential of the economy may have turned the corner, but we have a long way to go to get back to the point where a lot of small business owners think it’s a good time to expand,” Shane wrote Monday for the New York Times.

As president of Mercantile Capital Corporation – a conventional, for-profit 504 lender – Christopher Hern suggests fully lifting any restriction on refinancing, to really stimulate small business lending. Bob Coleman, publisher of Small Business Administration newsletter Coleman Report, agrees.

“This is another program stymied by too much regulation and will not deliver the intended stimulus desired by Congress and the Administration,” he commented to the New York Times.

Small business owners – will you take advantage of the new 504 lending program anytime soon? Why or why not?

The $300 Billion Tax Cut

Throughout his presidential campaign, Obama has supported the implementation of a middle-class tax cut, amounting to $500 for workers and $1,000 for families. But his latest economic agenda calls for far more money than anticipated and potentially more than ever requested by any president.

Provisions aimed for immediate relief include one that would allow businesses to write off huge losses of 2008 and 2009, while also removing tax obligations over the past five years. Such received broad governmental support, but they also drew skeptical responses from others.

“We do not want to see the past few months repeated, where $700 billion … in loans were provided without any quid pro quo from the recipients,” said B. Sheridan of Andover, Ma. to The New York Times. “The end result: the recipients took the money, buttressed their balance sheets and then announced drastic future layoffs. To repeat that would be unacceptable.”

Some small business owners wonder if, after making strategic budget cuts during the credit crunch, they will receive as much benefits as those that were less prudent. While the U.S. Chamber of Commerce supports this provision, it expressed wariness of others – including a one-year tax credit that made new hires over the past year – in its own stimulus plan.

Entrepreneurial Presence

Small business representation may also take new form. More than a third of the new senators and representatives were once entrepreneurs or venture capitalists, according to the Small Business Administration’s Office of Advocacy.

Many of them campaigned for lower taxes, plus costs in health care and energy. In addition, with their past experiences, some have campaigned for a whole new business direction. For one, Sen. Jeanne Shaheen (D-NH) reasons than the United States should invest time and money into the science and technology industries, rather than manufacturing sectors dominated by China and India.

In the meantime, a change in Small Business Administration leadership has raised questions regarding the wellbeing of a long-neglected agency. While Obama’s nomination, Karen Gordon Mills, has 25 years in venture capitalism, she has close to none in entrepreneurship.

Still, while serving in the president-elect’s transition team, she gained the support – and recommendation – of Sen. Olympia Snowe (R-Maine), who also called for a Small Business Administration cabinet seat. Others have since followed her lead, including the agency’s acting chief counsel for advocacy, Shawne McGibbon.

The editorial staff of Maine’s Sun Journal echoed such support: “In this sense, it is accurate to think of the government’s role going forward as the venture capitalist, putting money into endeavors with hopes of growing business and garnering returns.”

Readers, what do you think of these developments? If all of these proposals are implemented, how would they affect your small businesses?