Report calls for Congress to overhaul small business programs
BUSINESS RECORD STAFF Mar 15, 2022 | 3:50 pm
2 min read time540 wordsAll Latest News, Retail & Business
Outdated federal policies are holding back America’s small businesses from reaching their full potential, according to a new report released Monday by the Bipartisan Policy Center, a Washington, D.C.-based think tank, and Goldman Sachs 10,000 Small Businesses Voices, a small business advocacy initiative.
The report, “From Pandemic to Prosperity: Bipartisan Solutions to Support Today’s Small Businesses,” urges Congress to reauthorize the Small Business Administration for the first time in more than two decades, a move the groups say would “allow programs supporting small businesses to be reimagined to reflect the realities of today’s economy.” SBA programs were last reauthorized in the Small Business Reauthorization Act of 2000.
Among the conclusions from the report:
Small businesses are unable to compete with larger businesses for talent.
Three-quarters of respondents to a recent Goldman Sachs 10,000 Small Business Voices survey who are having difficulty retaining employees said they can’t afford to compete on salaries, while 67% said they can’t afford to compete on benefits, and 39% said they can’t afford to offer a retirement plan. Also, existing policy programs and incentives intended to address small business hiring and retention challenges often have low adoption because they are overly burdensome and complex.
Affordable, reliable child care is critical for workers and small business owners.
Over half of small business owners in the survey said they or their employees had faced child care challenges during the pandemic. For small business child care providers, the pandemic also highlighted the deficiencies in the basic business model of child care. The cost of providing quality care exceeds what most parents and families can afford to pay, even with existing means of government support.
Access to capital inequities will persist beyond the pandemic.
In the Goldman Sachs 10,000 Small Businesses Voices January survey, 48% of Black small business owners said they expect to take out a loan or line of credit for their business in 2022, compared with 33% of all survey respondents. Nineteen percent of Black small business owners were “very confident” in their businesses’ ability to access capital, compared with 31% of all respondents.
Simplifying government contracting is essential to small business participation.
Every year, the federal government spends hundreds of billions of dollars buying goods and services, from software and technology to furniture and construction. The federal government’s record in meeting contracting goals for subcategories — including for disadvantaged small businesses and women-owned small businesses — has been mixed. For example, the government has only twice met its women-owned small businesses contracting goal since it was established in 1994.
The groups are advocating for a renewal of the COVID-19 Economic Injury Disaster Loan program, which expired at the end of 2021, to provide access to capital for small businesses still struggling from the pandemic’s impacts. The groups are also calling for enhanced federal technical assistance and training to help more small businesses get “credit ready.”
“Small businesses add to the economic vitality of our country, but outdated policies are holding them back,” said David Solomon, chairman and CEO of Goldman Sachs. “Our new report shows bipartisan solutions, like expanding access to retirement plans and investing in high-quality child care, will advance economic growth.”
An executive summary of the report can be found at this link.