Just this week, congress passed a job-creation / tax cuts bill that’s aimed at rewarding businesses who hire new people. Called The Hiring Incentives to Restore Employment Act (or HIRE – clever, huh?), it seeks to give tax breaks (in the form of a social security tax exemption) to businesses that hire a previously unemployed (for 60 days) person.

Furthermore, the HIRE Act will provide a $1,000 tax credit (to be taken in 2011) for every new employee retained for 52 weeks. This is a good thing – maybe this will help a few out of work people get jobs.

But to me, the biggest news is tacked onto this bill was our old friend Section 179. This new HIRE Act keeps Section 179 around for at least another year. And even better, the “higher limits” that were first instituted two years ago were kept. This means businesses may elect to write-off up to $250,000 of certain capital expenditures (generally meaning equipment purchased) in 2010. So instead of depreciating a piece of purchased equipment over time, the entire purchase price can be written off in the first year. Nice.

This write-off is subject to a phase-out once these expenditures exceed $800,000. But still, this is BIG BIG news for businesses. And it’s big news for me, because when a business combines equipment financing (and equipment leasing) with Section 179, the benefits are profound. In many instances, a company could actually write off MORE than the first year’s finance payments total, making leasing equipment a profitable venture for the fiscal year. Again – nice!

Anyway, now you know – Section 179 is back. So if you were thinking about buying new equipment, 2010 is your year!

Now that 2010 (and a new decade) has begun, I’ve definitely noticed a stark difference from last year in regards to “the mood” of the business world (because I’m in the equipment financing business, I definitely have my finger on the pulse of small and medium sized businesses.)

Last year, there was a ton of fear – what was going to happen / where was the economy going / would banks fail / were we going to collapse? These questions were all on the minds of people, and let me tell you, in some cases, business ground to a complete halt. When you fear economic collapse, you’re not spending anything.

Now, of course, nothing near economic collapse happened (it’s almost laughable when you really think about it). In fact, we went through an old-fashioned recession. Something we’ve done before. But, and this is key to remember, this was the first real financial crisis of the internet age (I don’t count the 2000 dot com bust, as we were far from fully wired then). This time, everyone knew everything that happened, and everyone had an opinion. The hype was out of control, and helped what appears to be a self-fulfilling prophecy.

Now it’s a year later, and there aren’t any more fears of collapse. Equipment financing and equipment leasing still aren’t back to where they were pre-recession, but we’ve definitely seen the bottom. And it’s thawing, ever so slowly. It seems the people who are still around are taking a deep breath and thinking “Looks like I survived… ok, what now?” And “what now” quickly turns into “let’s continue on” (and continue on hopefully means a call to Fletch to lease equipment.)

It’s interesting to see the change – the absolute dread of a year ago has vanished, and has been replaced by the resolve I mention above, and also a hefty dose of political arguing (who’s to blame? Him? Her? The Right? The Left?) I guess my point here is to observe what I see as interesting, and to point out things are never as bad as the hype suggests.

If you’re reading this, you’re still here. What now?

new years in equipment leasing

I did this last year, and looking back, I was right about a lot of things. The Dow finished a little higher than I thought, but the Yankees did win the World Series like I predicted (and the Red Wings made the finals.) And a lot of my other economic predictions came true in one form or another. Now, if I could only do the lottery numbers…

So here are some predictions for 2010:

• Section 179 will stay around – there’s almost no chance it goes away, as to do so would send the wrong message to businesses in the face of a soft economy. In fact, the limits may increase as business expansion will be seen as a key issue in creating jobs (more on this below).

• The economy won’t get much better, nor will it get much worse. But the recession is ending / has ended (depends who you ask), and we’ll settle into what is a “new” normal. As we get used to this “new normal”, upticks towards the end of the year will be seen as very welcome.

• If nothing changes, equipment financing and equipment leasing will stay about the same as they did last year.

• But something might change… There’s a good chance we may see some more government intervention into the economy, specifically geared towards job creation, which will probably be seen as our biggest issue. If that happens, equipment financing and equipment leasing may take on a new life.

• I will go on a cruise in May. Yes, I see that happening (pretty easy prediction when I’m looking at the ticket receipt.)

• The Yankees will repeat. I don’t say that because I am a fan, but because I feel that group of oldies has one more “dynasty run” in them. The Colts will win the Superbowl, the Devils the Stanley Cup, and the Orlando Magic the NBA title.

• In the end, this will be an easier year for almost everyone than 2009 was, even if it’s only because 2009 hardened many of us.

Hope you all had a happy and safe new year, and are ready for a fresh, crisp 2010!!