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When I hear lifelong conservative Republicans saying they “hope for Barack Obama’s success because it will mean we all succeed,” I sense a sea change. And with a 75 percent approval rating, it seems that most of the country has caught Obama fever. As someone who focuses on credit issues and the success of small businesses, I have been searching for Obama policy details that will directly affect small business owners.
Here’s my current list of anticipated probable near-term changes:
- Small Business Administration (SBA) head, with small business sea legs
- Improved Minority, Veteran, and Women’s Access to Capital
- Women-Owned Business Contracting Program
- Tax Relief for Small Businesses and Start-Ups
- Universal Healthcare
New SBA Leader
Included in the administration’s economic team announcement was the appointment of entrepreneur and venture capitalist, Karen Mills, to lead the Small Business Administration. Women (of any race) who apply for small business loans are more likely to be rejected than white men. Since lenders have the right to decline loans for a breadth of reasons it’s not always simple to prove discrimination although it continues to be alleged far too frequently. The Obama-Biden team discussed this issue during the campaign. And the selection of Karen Mills gives credence to what could have been thought of as pandering campaign rhetoric.
When Mills was introduced in mid-December, the House of Representatives’ Small Business Committee Chairwoman Nydia M. Velazquez praised the nomination. She said, “President-elect Obama’s decision to name an SBA administrator so early in the transition is a good sign for small businesses. This appointment shows that his economic team recognizes the key role that small firms play in job creation and the need to take quick steps to revitalize the agency’s role in spurring growth.”
Velazquez went on to explain, “Through budget cuts and mismanagement during the last eight years [of the Bush Administration], the SBA has become nothing more than a shell of the agency it used to be.”
Capital for Minorities, Veterans and Women
A variety of SBA loan programs were developed to assist minority-owned, veteran-owned, and women-owned businesses with start-up and growth. Allegations that all of these programs have been minimized during recent years have been central to many complaints regarding the SBA. Citing this situation frequently on the campaign trail, the Obama Administration has made a commitment to changing it. If you go to SBA.gov to search for detailed information on these programs, you’ll find limited data for women and veterans. You will find research reports on minority business rather than loan program information. Expect an updated, more helpful, SBA Web site shortly.
Federal Contracts for Women
As an additional positive sign for female entrepreneurs, a Women Owned Business Contracting Program to help women-owned businesses gain work with the federal government was signed into law by President Clinton. However, President Bush decided against implementing the program. President Obama has said it will be reactivated immediately. This should smooth the path for more women to secure government contracts for their companies.
Throughout the campaign and as part of stimulus package discussions, the new administration has recommended tax cuts and incentives for small businesses. Because tax changes go through many negotiation iterations in Congress before they become legislation, it’s impossible to know what the outcome will be or when. Since 99 percent of employers provide work to more than 50 percent of American employees in small businesses and the dire economic outlook demands relief, we should expect small business tax breaks in an upcoming stimulus tranche.
Ailing Senator Ted Kennedy is working on a universal health insurance bill to be passed in this session of Congress. Many consider this an advantage for small businesses, which cannot afford to provide insurance for their employees. With unemployment increasing at a rate between 500,000 and 600,000 jobs per week and the number of uninsured Americans soaring to more than 50 million, approximately 16 percent of the population, during 2009 you are likely to see a new health insurance system pass both houses of Congress and be signed into law by President Obama. A work force that can access healthcare to maintain its vitality has the ability to remain far more productive than workers battling health challenges without adequate care.
The new administration is discussing additional programs oriented toward small businesses, including an increased focus on rural opportunities, establishment of a national public/private network of business incubators, and sweeping changes to make the SBA far more viable than it was during the Bush Administration. With an oft-repeated understanding that 98 percent of small businesses employ less than 100 people and most of these companies net less than $250,000 per year, small business owners have many reasons to hold onto hope that President Obama will fund programs to make it easier for your enterprises to flourish.