Businesses with a need for a cash infusion may be able to obtain one quickly as a result of a tax refund from recently expanded net operating loss (NOL) carryback allowances. These provisions address the fact that, although a net loss may appear in only one tax year, it represents weaknesses that may have arisen over years in which their effect was temporarily masked by favorable income opportunities. Then, once the economy recedes and the business posts a loss, it would otherwise be unable to obtain tax benefits from the amount of loss that exceeded income in that tax year. In a sense, these provisions acknowledge swings in the business cycle and help smooth them out. In addition, for many struggling businesses in a tight credit environment, these provisions can provide much-needed cash flow.

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