Another alternative for financing your business might be a private investor. Some people might call these venture capital firms or private equity financing. The Small Business Administration has a Small Business Investment program through which it works to stimulate and supplement the flow of private equity capital and long term loan funds, with Small Business Investment Companies.

What is an SBIC? An Small Business Investment Company (SBIC) is a private lender associated with and regulated by the Small Business Administration. The SBA provides these lenders with guarantees similar to those provided to commercial lenders, to encourage them to fund riskier start-up businesses. Recovery Act Changes. The American Recovery and Reinvestment Act ("the Recovery Act) included some changes enacted by the SBA to encourage more SBIC investment.

• The formula for calculating the maximum amount of outstanding leverage that can be made available to a single SBIC and to two or more SBICs under common control was changed. This leverage is similar to the SBA guarantees for commercial lenders.
  
  
• To encourage SBIC financing of smaller enterprises, the Recovery Act also requires that SBIC's must certify that at least 25 percent of all future financing dollars will be in smaller enterprises.
  
  
• Maximum SBA funding levels to SBICs will increase up to three times the private capital raised by the SBIC, up to a maximum of $150 million for single SBICs, or up to $225 million for multiple SBICs that are under common control. The cap for all licensees was set at $137.1 million before the Recovery Act.
  
  
• These limits are even higher for SBICs that are licensed after October 1, 2009, that certify that at least 50 percent of their investments will be made in small businesses located in low-income areas, up to $175 million for single licensees and up to $250 million for jointly controlled multiple licensees.

The SBA says these changes are permanent.

For More Information on SBIC's and how you can apply:
Read my FAQ on Getting Funding from an SBIC
See the SBA's Investment Division page for more information about SBIC's
Check out the list of SBA-licensed venture capital firms by state.

I recently received a notice from the IRS relating to my business tax return from 2007. I talked to my CPA before I replied, and I also called the IRS just to be sure I was giving them what they wanted. I found the person I talked to knowledgeable, and I didn't have to spend much time on hold. (Of course, this isn't the middle of tax season.) They were slow with their written response, but they sent a letter telling me that they were working on the issue, which I thought was helpful, kind of.

What Has Been Your Experience with the IRS? Have you found them helpful? Or has it been a nightmare? If you have an IRS story, particularly one relating to business taxes, write it up briefly in response to my "Readers Respond" article: What is Your Experience with the IRS?

By the way, the issue was resolved. I actually got a small refund.

You get a six month dental checkup, and an eye exam every year, right? It is just as important to do a checkup on your business expenses, to make sure you are capturing all these expenses so you can deduct them.

At mid-year, many tax and financial advisers do a review with clients to make sure they are keeping up with tax deductions and record-keeping. July is a good time to take stock and see where you are with tax deductions. Are you recording all your expenses, so you can claim them at tax time? Here is a list of some expenses you might have missed:

Accounting, bookkeeping, auditing and tax expenses

Property and casualty losses, and forced sale losses

Taxes (Other than Income Tax)
Many of these taxes are embedded in other costs, but make sure you have included them when you prepare your lists of expenses for the year.

Employee expenses, including
Training and education expenses
Employee benefit expenses
And other employee-related expenses.

For a more complete list of business tax deductions, see my article on Business Tax Deductions A to Z.

Another holiday?! You don't have to worry about giving your employees the day off for this one; in fact, you will need them. State sales tax holidays are usually run in late summer, before school starts. The "holiday" is from state sales taxes on specific items. If you sell these items, and your business is open during the holiday dates, your state requires you to omit sales taxes on any sales during these dates.

A list of state sales tax holidays reveals most are in late July or early August. These holidays are used to encourage people to buy school supplies, school clothing and shoes, and computers.

Other states have sales tax holidays for other purposes:

• Energy products: Texas, Virginia, West Virginia, Missouri and Georgia
  
• Hurricane preparedness products: Virginia and Louisiana in May each year, before the start of hurricane season.

  If you need more information, contact your state department of revenue

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