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The Future of Small Businesses

With limited employees, capital and resources, small businesses are hit the hardest by rigorous regulations, and the expense of compliance often poses sustainable growth roadblocks for the entrepreneurs who need it most. The following months could prove especially pivotal for small business owners due to the growing possibility of new legislation and regulations.

Access to Credit
A vital decision on the horizon is the possible repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which has constrained some small businesses and homebuyers seeking access to credit. As data from the Federal Reserve Bank of St. Louis show, in the six years prior to Dodd-Frank, small bank lending surpassed large bank lending by more than 150 percent. In the six years after the bill’s passage, small bank lending sits nearly 80 percent below lending from large banks.

The bill’s stringent credit qualifications have limited Americans in their personal and professional lives, increasing the difficulty to access business capital and home loans. The possible repeal of Dodd-Frank could mean easier access to credit for millions of businesses, an increase in homebuyers and a stimulated economy.

Tax Reform
Lowering tax rates for small businesses, which pay taxes at a higher rate than corporations, could also be a huge helping hand to millions of entrepreneurs across the country. Recently introduced bipartisan legislation by Senators Bill Nelson (D-FL) and Susan Collins (R-ME) aims to do just that.

Most small businesses are categorized as pass-through companies for which profits are taxed at individual income rates; the maximum individual tax rate is 39.6 percent, while the corporate tax rate rests at 35 percent. Under the proposed bill, income for pass-through businesses would be taxed like income from corporations.

This would mean more money in the pockets of small business owners to grow their companies and invest back into their communities. The revitalization of struggling businesses and cities around the country could provide a boost to the recovering American economy.

Increased access to credit and lower taxes would allow small business owners to build wealth and accumulate higher purchasing power to invest in their companies and homeownership, translating to a more balanced professional field and a healthy housing market.

From entrepreneurship to homeownership, it all comes full circle. The success of small business owners translates to the success of the country as a whole. By the same token, if we fail to help small business owners succeed, we’re jeopardizing the backbone of the economy, as well as the lives of millions of people.

In today’s market, it’s essential to leverage your unique tools and opportunities for success. With our Small Business Sustainability Care Package, NAWRB equips small business owners with preventive guidelines for long-term success. Whether current regulations help or hurt your company, the establishment of sound business practices can be the difference between closing your doors and living to fight another day.

Desirée Patno is president and CEO of the National Association of Women in Real Estate Businesses (NAWRB).

For more information, please visit www.nawrb.com.

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