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80% to 90% of start-ups don't use any outside financing, relying on the owner's personal resources. For businesses that do require additional capital, there are many options. These include (but are not limited to) "rolodex financing" (help from family and friends), national and regional banks (the recovery package reduces some of the SBA loan fees and provides other incentives for lending), and angel investors (the recovery package increases the exclusion for gain from the sale of "small business stock" to 75% as a way to encourage equity investments in small corporations).

In assessing any loan option, consider interest costs, fees for arranging the loan, the say (if any) that the lender will have in your business, and other factors. Also look into equity financing (bringing in investors rather than borrowing). Equity financing does not require any loan servicing (i.e., there's no immediate drain on cash flow).

"Loss carrybacks" refer to the ability to carry back net operating losses to prior years. As stated in an earlier response, the tax law allows C corporations (and owners of other businesses with respect to their share of losses) to carry back losses from operations (called net operating losses or NOLs) to certain prior years in order to offset income in those prior years and receive a tax refund. Usually, the carryback period is two years. For 2008 NOLs, the recovery package allows small businesses (those with average gross receipts under $15 million) to elect a three-, four-, or five-year carryback period. The tax refund that results from net operating loss carrybacks can be used to help your business now.

Under the American Recovery and Reinvestment Act of 2009, the SBA will get $730 million to help loan programs for small businesses (for example $30 million to expand the microloan program). The SBA will guarantee a greater amount of commercial loans (up to 90%) and eliminate some fees. Overall, however, this is no guarantee that commercial banks will make SBA loans; whether this will ease financing for small businesses remains to be seen.

My husband and and I own a small construction company, how will the stimulus package affect us?

I heard that the new administration increased our property expense deductions. Can you tell us what is exactly included in 'property'? Does that include computers, and major office furniture like shelves, and counters? Also does it matter if the equipment is new or used?

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Whether the cost of camera equipment can be expensed (rather than depreciated over a number of years) is answered in post #25. However, you raise another tricky tax issue. When a person has a hobby activity, overall business expenses cannot be deducted in excess of income from the activity. This is called the hobby loss rule. Then, the business-type expenses are not claimed as business deductions reported on Schedule C but rather as miscellaneous itemized deductions on Schedule A (only amounts in excess of 2% of adjusted gross income are deductible). Whether a person is in business or merely engaged in a hobby depends on many factors. If there's a reasonable expectation of making a profit and can show that the activity is run in a businesslike way (you keep good books and records, have a separate business bank account, and a business plan for success), then you are treated as being in business-even if the activity loses money-so you won't be subject to the hobby loss rule. You can also rely on a presumption in the tax law that you're in business and not a hobby if you have profits in three out of five years.