Entrepreneurs are a vital component of a thriving American economy. Indeed, small businesses represent 99% of all employer firms and account for half of our nation's jobs and economic output, and their creativity spurs innovation in all sectors of the economy. That’s why it’s important to take time to appreciate our country’s entrepreneurs during November, which is National Entrepreneurship Month.
During National Entrepreneurship Month, policymakers should recognize our nation’s innovators and job creators by taking time to address the primary issues that are holding them back, including lack of access to capital, the need to stabilize healthcare costs and fairness in tax reform efforts.
Improving access to capital is one of the most crucial issues for entrepreneurs. Small Business Majority’s polling found 90 percent of small business owners identify access to capital as a top concern. This finding is no surprise given that many small business owners are still struggling to access capital post-recession. And when small businesses are approved for loans, it’s often not for the full amount requested. In fact, the Federal Reserve found of those small business owners who did receive a loan, only half were approved for the full amount requested.
Alternative lending has stepped up to fill the void, with online lenders and crowdfunding applications growing significantly in recent years. And while these options represent unique opportunities for entrepreneurs to access capital, safeguards are needed to make sure that these lenders operate safely and responsibly in the small business lending market.
This is why it’s crucial that policymakers find ways to expand access to capital opportunities for small businesses. This should include maintaining and expanding funding for the Small Business Administration’s lending programs and the Community Development Financial Institutions (CDFI) Fund, which is currently slated to be cut by nearly a quarter in 2018. What’s more, we must promote responsible practices by online lenders and ensure fair and clear regulations on crowdfunding and other non-bank, non-VC sources of capital.
It’s also important that policymakers and lenders work together to implement common-sense solutions to strengthening the Affordable Care Act, as access to affordable and quality healthcare is vital to our small business community. Contrary to the popular narrative, the law is working for America’s small businesses by providing coverage for millions of small business owners, self-employed individuals and small business employees. Instead of continually engaging in dangerous efforts to repeal or replace the ACA, Congress should act to shore up the individual marketplaces by guaranteeing payments to insurers for cost-sharing subsidies and strengthening the small group market by opposing legislation that could create separate risk pools, like association health plans, which would drive up healthcare costs for many small businesses.
Tax reform is also dominating conversations for small business owners as Congress considers proposals to drastically alter our nation’s tax system. Recent polling by Small Business Majority recently found that small business owners want tax reform that promotes fairness over tax cuts. The poll also found that small businesses feel the current tax code unfairly favors large corporations that benefit from corporate loopholes. Current proposals from both the Senate and the House don’t do enough to correct this imbalance, granting large companies a huge tax break that will grow the deficit without closing loopholes. As Congress continues debate on various options for tax reform, any changes must level the playing field for small businesses, rather than enacting top-down tax cuts that won’t have a benefit to most small firms.
National Entrepreneurship Month is an important time to remind us of the critical role that small businesses play in our economy. Congress can honor this role by advancing policies that support small businesses, such as expanding access to capital, strengthening our healthcare system and promoting a tax system that lets entrepreneurs compete with big business.
In addition to pushing for policies that support small businesses, one of the most basic steps anyone can take to support entrepreneurs is to participate in Small Business Saturday, which takes place this Saturday, November 25. Don’t forget to shop and dine small this Small Business Saturday!