FACTBOX: Senate weighs Obama's small business plan

(Reuters) - The U.S. Senate this week is set to debate a plan by President Barack Obama to provide $30 billion in capital to independent community banks to increase lending to small businesses.

The House of Representatives last month passed its version of the bill, which provides for federal investments in independent banks with assets less than $10 billion. Supporters say the initiative would provide much-needed capital for community banks to lend to small businesses, which account for a large portion of job creation in the U.S. economy.

Critics call the plan another government bailout for businesses similar to the $700 billion Troubled Asset Relief Program that was used to prop up Wall Street firms during the 2008-2009 financial crisis.

Here are the details of the bill the Senate will consider:

SMALL BUSINESS LENDING

* The Senate bill, like the version passed by the House, would establish a $30 billion fund to provide capital to small community banks to prompt small business lending. Lenders would get a break on dividends paid to the government depending on how much they increase new lending to small businesses.

* The Senate bill provides $900 million to support existing state small business credit initiatives. The House bill provides as much as $2 billion to help state initiatives.

* Small Business Administration loan limits would be increased in the Senate bill to $5 million from $2 million. SBA limits for its 504 lending program for commercial real estate projects would be increased to $5.5 million from $1.5 million. Loan limits for microloans would rise to $50,000 from $35,000.

SMALL BUSINESSES TAX BREAKS IN SENATE BILL

* To encourage investments in small businesses, the bill would exclude some small business stock sales from capital gains taxes. The stock must be held for more than five years.

* Small business deductibles for start-up costs would be doubled.

* Small businesses would be able to immediately expense up to $250,000 in capital spending. The bill also extends through 2010 tax provisions that allowed businesses in 2008 and 2009 to more quickly write off purchases of new equipment and other depreciable property.

* The bill frees up capital by allowing small businesses to carry back general business tax credits to offset taxes paid over the previous five years, instead of the current one year carry back. Anything left over can be carried forward for 20 years.

OFFSETS IN SENATE BILL

* The cost of the lending provisions and small business tax breaks are to be offset by a number of revenue-raising provisions, including measures that would tighten tax reporting rules on rental properties and tax-collection rules for federal contractors.

* The bill also would tighten eligibility rules on the cellulosic biofuel producer tax credit to exclude highly corrosive fuels such as crude tall oil which is a by-product of paper manufacturing.

(Reporting by Donna Smith; Editing by Philip Barbara)