In 1963, President Kennedy proclaimed the first National Small Business Week to honor our nation’s entrepreneurs whose innovative spirit and hard work helped make our country great. For more than 50 years, we’ve carried on the tradition of celebrating small businesses, and for good reason.
Small businesses make up more than 99 percent of all businesses in this country, employ half of the private sector workforce and create the majority of net new jobs.
Despite the immense impact they have on our economy, they’re still struggling to thrive. In fact, a recent survey from Bank of America found nearly two-thirds of small business owners say they are still recovering from the aftermath of the Great Recession.
As we celebrate our nation’s innovators and job creators during National Small Business Week, we should remember to support small businesses not just this week, but every day of the year.
Let’s take a look at some policies that would help small businesses break through the barriers that are keeping them from prospering.
Increasing Access to Capital
It’s no secret that access to capital is a longstanding problem for small businesses. And while the development of online lending is opening up new avenues for entrepreneurs, it introduces its own set of problems — including unscrupulous actors who mask very high interest rates.
Meanwhile, access to traditional loans is still limited, and there are significant gaps that remain in critical areas, particularly in minority and rural communities and for women and veterans. In order to ensure small business owners have the capital they need to grow their businesses, we need policymakers to expand credit options for small business owners and ensure fair and responsible regulations for online lending.
This includes taking actions like urging the SEC to continue to develop and implement rules to open up crowdfunding and implementing policies that ensure women and minority entrepreneurs get fair access to capital. Congress should also support efforts by the Small Business Administration and other agencies to close gaps through loan guarantee programs, including measures that reduce fees and streamline processes and paperwork burdens.
Supporting Our Growing Freelance Economy
Access to high speed Internet and high-powered mobile computing tools are making it easier than ever for people to leave the traditional office environment and work wherever and whenever they want. A vast 22 million microbusiness owners have created their own jobs. MBO Partners, a consulting firm for independent workers, estimates that by 2020, fully half of all workers will have spent some time self-employed during their career.
With these numbers in mind, it’s time for the U.S. to update policies that reflect this evolving workforce. It’s clear the rise of this new workforce is being driven by access to broadband and emerging technologies. But there are hurdles the nation has to overcome in order to support these entrepreneurs — namely maintaining net neutrality and an open Internet for all, and ensuring widespread broadband access across the country.
While broadband provides critical access to economic opportunities, jobs and innovation, access to broadband is unevenly distributed and approximately 19 million Americans still lack access. This means many entrepreneurs are not getting the broadband services they need to break out on their own or help their businesses grow.
And like traditional small business owners, freelancers struggle to gain the investments they need. Likewise, opening up new avenues for online lending and establishing a regulator in the alternative lending space would help freelancers and microbusiness owners who are struggling to get credit.
As we reflect on small businesses this week, policymakers should remember that the drive and hard work of entrepreneurs has helped contribute to our economic strength.
Let’s get these innovators and job creators the tools they need to succeed and keep our economy strong.