Small Businesses Seem To Be Pleased By The Recent Election Results

With the recent election cycle completed, it’s time to take a look at how small businesses feel about the political landscape.

For the past several months, it has appeared that small businesses were beginning to become more and more optimistic about the economy. There were multiple studies suggesting this to be the case, but one had to wonder if the election would change that outlook.

Apparently it hasn’t. While it’s still very early, and no one knows what exactly Congress will do, according to a survey by Manta, the Web’s largest free source of information on small businesses, small businesses are now even more optimistic.

62% of those surveyed believe the new Republican controlled House will have a favorable impact on small businesses overall. 58% believe their own businesses will improve because of the election results.

In the company’s most recent “Pulse of Small Business” user survey conducted Wednesday of 1,189 small business owners and employees (the majority of them owners), 69% said the Obama Administration has hurt small business. Moreover, 58% of the respondents said they are more confident now that they will be able to grow their business than they were two years ago when the Democrats and President Barack Obama triumphed in the elections.

Admittedly this optimism seems a bit strange. To anyone who’s familiar with politics, we’re now in a situation where Congress will be ground to a halt, since neither Democrats or Republicans seem to want to move an inch. Partly for ideological reasons and partly just to make the other guys look bad heading into the 2012 election cycle.

I’ll be honest, I don’t think this is a particularly good scenario, and I don’t understand the optimism. But we’ll see how things progress in the coming year.

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Good news down in LA. Nearly 170,000 construction jobs will be created over the next 10 years.

Robert Carlsen who does the blog Vertically Speaking over at California Construction has a recent post that is great news for the construction industry in the LA area.

Through the Department of Transportation’s Federal Highway Administration’s Transportation Infrastructure Finance and Innovation Act (TIFIA), a loan of $546 million, along with a recent TIGER II grant of $20 million, will go towards the construction of the proposed $1.9-billion, 9-mi Crenshaw/LAX light-rail extension project. Considering how desperately LA needs to expand public transportation,

The construction is part of Mayor Antonio Villaraigosa’s 30/10 plan, which was unveiled earlier this year. The plan is to condense three decades worth of transit projects into 10 years with the help of federal government loans and taxes.

Overall, the plan is supposed to create nearly 170,000 construction jobs over the 10 years.

The federal investment is expected to create 5,000 jobs, according to a study by the Los Angeles Economic Development Corp. The entire Crenshaw/LAX project will create more than 15,000 jobs, according to the mayor’s office.

I also highly advise you reading Carlsen’s blog Vertically Speaking, as it has great California specific construction news.

Can rebranding green upgrades for homes produce an actual impact?

Our friends over at Green Goddess have a very interesting article for those in the green construction industry. Recently a study was conducted by the Berkeley National Laboratory that found that the term “audits” or “retrofits” made people think negatively about improving residential energy efficiency. The results, they say, should serve as a guide to the more than 2,000 towns, cities, states and regions with stimulus funding to spend on clean energy programs and with minimal experience to draw from.

A key partner for these programs should be the contractor workforce, the authors of the study said, because contractors know the marketplace for residential construction work and will be the “face” that customers see when they interact with the program. Ensuring that contractors are well-trained, they added, can help to avoid problems and consumer backlash.

But while the suggestion is that offering “energy assessments” and “upgrades” sounds good, will this change in branding make any difference for businesses?

Well, Tanya Stock of Green Goddess has some very keen thoughts on this question, which I’d advise you reading on Green Goddess. Her basic synopsis is that while such changes sound good on paper, the challenges for a business to totally change their style of branding (and possibly even their name) may come at a very high cost. In other words, things are not always as simple as they look. Not to mention that a fair number of potential customers already see energy improvements as costly improvements, even if in the long run they benefit from them.

Which leaves us with the question of what can the government and businesses do to better streamline green upgrades? Is this study enough to change things? That’s harder to answer. But if you are a green business or a business looking into getting into that field, I recommend viewing the study here and then reading Green Goddess’s good critical take on it.

$1.5 billion headed to states to help small businesses

Missed this late last week, but the Treasury Department on Friday announced a $1.5 billion lending initiative meant to help spur small businesses at the state level.

To receive funding, states have to demonstrate that for every dollar the federal government provides, they will generate $10 in new private lending, which will create an impact of $15 billion on the economy, the Treasury said.

Among the six states receiving the biggest allocations, California has the largest at $168.62 million, followed by Florida at $97.66 million. Michigan can receive up to $79.16 million and Illinois up to $78.37 million. Both New York and Ohio will each receive slightly more than $55 million.

This is of course in addition to the Small Business Jobs Act which went into law recently, creating a $30 billion small business lending fund for community banks and offering tax cuts for small businesses.

So is throwing more money at the problem a good idea? Let’s certainly hope so. As the old saying goes, you’ve got to spend money to make money.

17,000 more businesses are now eligible for SBA programs

Some tremendously good recent news for small business owners. Yesterday, the Small Business Administration instituted changes in small business size standards for the retail, hospitality, restaurant and “other services” industries. This change will make 17,000 more businesses eligible for SBA programs, including loans and preferential treatment for federal contracts.

According to the Washington Business Journal, this change in small business size standards for the service industry is a part of the SBA’s new approach in better defining who exactly is considered by the federal government to be a small business. Over the next two years, the SBA will complete its update in the rules, which have not been overhauled since 1980s.

The question now is who is going to benefit the most from this?

According the Journal, car dealers will be a major beneficiary of the change in size standards. The standards for dealers will be shifted from a maximum sales-based measurement (previously $29 million in average yearly sales) to an employee based number of 200 workers. The Journal estimates this will make 5,700 more dealerships across the country eligible for the SBA’s programs.

The SBA has also adjusted upwards the size standards for hotels, (limited-service) restaurants, cafeterias and food service contractors with the effect of making more than 2,000 businesses in these sectors into eligible small businesses.

So what does this all mean? Well, more more money for more businesses means more hiring and more growth. That’s always excellent to see.

[At the SBA, Size Definitely Matters]

President Obama signs Small Business Bill into law

Small business bill signingToday President Barack Obama signed into law the Small Business Bill that had gotten delayed in the Senate earlier this month. The law sets up a $30 billion lending fund for small businesses and includes an additional $12 billion in tax breaks for small companies.

Democrats said they backed the bill because small businesses had trouble getting loans after the financial crisis that began in December 2007. They estimate the incentives could provide up to $300 billion in new small business credit in the coming years and create 500,000 new jobs.

Republicans characterized the bill as a smaller version of the unpopular Wall Street bank rescue effort and blocked it in the Senate for weeks until two retiring Republicans broke ranks and voted to end blocking maneuvers.

The question is what will this bill do? Well, the San Francisco Chronicle has six ways the bill will work for small businesses:

  • $30 Million for Lending
    Thirty-billion dollars will go directly to community banks specifically for lending to small businesses. Since 2008 small business lending has dropped by 17.8% according to the Senate summery of the bill and this injection of money is expected to encourage small banks to increase lending. This lending initiative, along with other incentives in the bill, is expected to create at least 500,000 new jobs.
  • Microloans Are a Little Less Micro
    A microloan is a loan for small and home based businesses designed to help in the creation of a small business or aid in their short term capital requirements. It can also be used for up to five years to pay existing loan payments so existing money can be used to continue growing the business. In the past, a business could only access a maximum of $35,000 in microloan funds. That amount increased to $50,000 with the passage of this bill.
  • Bigger Deductions for Startups
    If you are starting your business in 2010 or 2011, the Small Business Jobs Act would increase the amount you could deduct in business startup costs from $5,000 to $20,000. Additionally, other tax deductions including more favorable deductions for businesses who acquire real estate related to their business are included.
  • No Loan Fees
    The Small Business Jobs Act extends the elimination of Small Business Administration (SBA) loan fees. In the past small business owners had to pay loan processing fees to originate the loan. Previous legislation eliminated the fee and the latest bill extended it.
  • Loan Guaranty Increases
    The Small Business Association works with local banks to encourage lending to small businesses. They do this by guaranteeing small business loans by 75%. Should a small business owner default on the loan, the bank that made the loan would only lose a maximum of 25% of the loan amount. The SBA would then pay the bank the remainder of the 75%. Under this new bill, the SBA will guaranty 90% of a loan. This increase should even further encourage local banks to lend to business that may be in distress.
  • Saving the State Initiatives
    Some states have lending funds for small businesses that can prove that additional funding would create jobs. As states face tighter budgets, some of these programs are disappearing. This bill will provide state level funding to allow these programs to continue.
  • Now how do you benefit from this? Well, most of these programs are administered by local community banks so the first thing to do is to go to the Small Business Administration website and find the nearest bank that is a SBA lending institution. Then, contact them and ask when the funding will be available.

    Congress approves Small Business Aid Bill

    Small Business Aid BillCongress has just approved the Small Business Aid Bill which establishes a $30 billion government fund to help Main Street banks lend to small businesses. It also would cut taxes on both big and small businesses and boost Small Business Administration loan programs. The bill passed through the Senate last Thursday by a 61-39 vote and it made it through the House today with a 237-187 vote that split along party lines.

    The bill now heads to President Obama’s desk where it will be signed. We’ll have more on this news in a future blog post but in the meantime, but here is a good article from the San Francisco Chronicle about why small businesses should be excited about this bill.

    6 Reasons to be Excited About the Small Business Jobs Act [SF Chronicle]

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