5 Things Small Businesses Want from Washington
| 23 | Aug 2010 |
Hardly a day passes without President Obama calling on Congress to pass the small business bill in September. The legislation would free up $30 billion in loans and institute a number of tax credits for small businesses. Small business owners are skeptical about how effective the bill will be.
BusinessNewsDaily asked 50 small business owners across the country how Washington can help get their businesses back on track. Five key trends emerged.
Ease lending requirements
In theory, Small Business Administration (SBA)-backed loans are supposed to help small businesses get loans even when they’ve been turned down by a bank. But requirements are still too stringent, small business owners said.
“I had the opportunity to acquire inventory at pennies on the dollar,” said Jeremy Shepherd, owner of Los Angeles-based jewelry retailer, Pearl Paradise. “The only type of loan or line of credit [the bank] would consider would be a cash-collateralized loan. The best we could do was [the equivalent] a prepaid credit card.”
Across the board, small business owners said banks need to lighten up, even if it means the loans are backed 100 percent by the government. And, business owners said, the SBA needs to raise the cap on 7(a) loans and American Capital Recovery (ARC) loans to allow for real growth.
“Without adequate financial assistance, the new generation of entrepreneurs will find it difficult to acquire existing business operations,” said Grover Rutter, a CPA based in Findlay, Ohio. “This deficiency in adequate capital is a detriment to current and future employment.”
Repeal 1099 reporting requirements
“The government needs to repeal or amend the 1099 reporting requirement in the health care bill,” said Mariette Knoblauch, an accountant at Blue Stone Accounting in Seattle.
The new reporting requirement, set to take effect in 2011, would require businesses to file a 1099 for every company from whom they purchase more than $600 in goods or services per year.
“It’s totally unworkable,” said Rick Smith, owner of Chef’s Resource, an online cookware retailer based in Laguna Hills, Calif.
Make it easier to get government contracts
“The federal government needs to simplify its bid process so small manufacturers can bid for government contracts without having to spend days and pay lawyers to fill out paper work to just place a bid,” said Garvey Rich, vice president of product development at KD dance, based in the Bronx, N.Y.
“As a small business, I don’t have any resources to figure out how to sell to the government,” added Healy Jones, owner of OfficeDrop, a document scanning service based in Cambridge, Mass.
“I can sign up a $10,000 contract with a business customer in a few minutes. Spending hours writing proposals and mailing them in to government agencies is just too time consuming,” Jones said.
Communicate better
Small business owners want straight talk from Washington.
“The ability clarify the implications of past and future legislation would go a long way,” said Mike Bucci, president of K&M of VA, a Richmond, Va.-based company that makes paint and craft products. “When legislators say that they don't understand the implications of what they have enacted, it makes them sound idiotic and scares us all.”
“There is no clear idea what they are going to do next,” added John Bambenek, owner of a security consulting firm in Champaign, Ill. “It's one thing to say cap and trade, but no one knows what all will come along with the likely 2,000-page legislation. We're still learning what was included when they passed health care reform.â
“In short, be clear what they are going to do and focus on clear and focused solutions instead of restructuring entire economic segments,” Bambenek said.
Get out of the way
Small business owners understand the need for regulation, but most feel they are being regulated right out of business.
“Washington has proven itself to be ineffective in doing much of anything for small business,” said John Kramb, owner of Adams County Whinery in Orrtanna, Pa. “They really need to butt out, unless something illegal is being done.”
“Let business do what it does best: Make stuff and provide services that meet the needs of the customers,” said Paul Chase, a Pennsylvania-based real estate agent. “There is certainly a need for some regulation, but companies are being regulated to death.”