What would you want your next President to do for your small business? On Tuesday, Hillary Clinton announced how she, as President, would help small businesses, startups and entrepreneurs in unveiling her plan dealing with a broad range of small business concerns.
Clinton’s announcement shows she does her homework. Her small business proposals aren’t going to make anyone swing from the rafters in excitement, and they don’t lend themselves to simplistic slogans or bumper stickers. But some of Clinton’s proposals could have a significant effect in reducing paperwork for many small businesses, improve access to funding, and save some money.
On a day-to-day basis, Clinton’s proposals may make your life easier, but you’re probably not going to remember any one of them once enacted. Of course, the devil is in the details, and their impact depends on how the regulations actually get written.
Here’s how Clinton’s small business proposals are likely to affect small businesses, including yours:
** Create a standard deduction for the smallest businesses. I’ve been advocating this for a long time. In my early years in business, it was frustrating to keep receipts for every paper clip I bought just to claim a few hundred dollars as a write-off. It’s crazy for a very small business to have to deal with a whole pile of paperwork for a small deduction. With more people in the “gig economy,” this proposal could make life easier and put some money in your pocket, especially if you’re an Uber or Lyft driver, rent your place on Airbnb, do business on Etsy or eBay, or are self-employed.
** Improve access to financing/capital by cutting red tape for community banks and credit unions. The economic collapse in 2008 brought more stringent lending regulations, making it harder for small businesses – even those with good credit – to get loans. In the last couple of years, many “alternative” lenders in the “fintech” industry have sprung up to help fill this void, but, frankly, many of them are predatory. Clinton could also do more to provide protection against the equivalent of ‘pay day’ lenders for small business while making traditional sources more available.
** Deferring student loans with no interest while launching a startup. This is an interesting idea and is likely to lead to an explosion of startups – at least on paper – as a means of deferring student loans.
** Streamline the startup process by offering incentives to local and state governments. Virtually all licensing and permitting roadblocks happen at the local and state level, and a whole bunch of these are never going away. If you want to start a consulting business, just print up some business cards and perhaps pay a local business license. But if you want to open a restaurant, you’re going to face a lengthy permitting process. And many state licensing requirements are never going to be eliminated. Last year, when I needed a new gas line, I’m glad my plumber was licensed and knew what he was doing. The Federal government can do some things to help, however. The Obama Administration launched the “Startup in a Day” initiative to encourage local governments to digitize and streamline their permitting process, but much more could be done, including providing funds and technical assistance.
** Allow businesses to use cash accounting. Small businesses usually operate on a cash – not accrual – basis, and it’s frustrating and costly to have to file taxes on an accrual basis. (This is already boring you, right?) But allowing companies with less than $25 million in gross revenues to use “cash accounting” is one of those issues that can make a big difference to many small companies.
** Health care tax credit. With the Affordable Care Act, “Obamacare,” there’s a tax credit for good employers who provide health care for their employees. But the formula and process is so complicated and restrictive, few actually qualify. If Clinton makes this simpler and covers more businesses, it would save many small employers money.
** Make the federal government more responsive to small business. Good luck, Hillary.
Clinton’s small business proposals may not make you salivate with excitement, but they show that she understands some of the problems and realities of running a small business.
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on August 24, 2016
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