October 1, 2014

Small Business News: Capital Considerations

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New regulation out of Washington D.C., or any government around the world for that matter, is usually bad news for small business. That’s not because small business owners prefer to be unaccountable for the decisions they make each day regarding their customers. In fact, small businesses unlike their massive “too big to fail” corporate cousins are often more dependent on fewer customers for their very survival thus the need to treat each one with courtesy and respect. This said, perhaps the most important considerations when viewing a newly passed Senate financial reform legislation designed to regulate banks and other potential sources of funding is how all of this may impact access to capital including credit upon which small businesses must sometimes depend. Today’s Small Business Trends roundup looks at some of the takeaways from the new legislation along with other issues impacting small business today.

Finance

Financial red tape won’t entangle investment resources for entrepreneurs. Though blogger and serial entrepreneur Jeff Bussgang made his trip to Washington in early May before the passing of the historic Restoring American Financial Stability Act, even then he was assured the law would not impact the VC and angel investor community. The New Entrepreneur

So, what does all of this mean to you? Well, there are two ways for small business people to look at the new financial reform which has yet to be signed into law. One way is to look at it from the standpoint of a business and the other is from the standpoint of a consumer. Obviously, as this breakdown suggests, features like a provision allowing potential borrowers to see the credit score that led to a loan rejection could be a valuable tool for small business. WalletPop.com

Less capital or smaller banks? A look at this initial breakdown of the mammoth new financial regulation passed recently by the U.S. Senate raises some obvious questions. Will discouragement of “risk-taking” by large financial institutions mean less money for small businesses and entrepreneurs? Or, will less regulation on smaller banks bring growth in that sector, a welcome development for small business? MarketWatch

What we need isn’t more regulation. It’s more investors. Specifically, Chris Farrell argues that what the U.S. economy really needs are more angel investors ready and willing to pump more money into the small business and entrepreneurial sector. Entrepreneurship not regulation the key to economic growth? We couldn’t agree more Chris! Bloomberg BusinessWeek

Investment

How to become an angel. And hey, if you’ve got experience in small business and entrepreneurship and a fervent desire to help it survive, let us inspire you. Brad Feld, who knows a thing or two about investing in startups, offers some suggestions above with links to more about how to become part of that economic solution. If you’ve ever thought about becoming involved in the investment side of small business, please check it out. Feld Thoughts

Credit

Sweet deals and tight credit. Small business owners and entrepreneurs are facing a unique dilemma as the economy begins to recover. Investing in commercial property, manufacturing facilities or other needed real estate has never been more affordable. The trouble is that between nervous lenders and new regulations getting a loan to make these capital investments has probably never been tougher. WSJ

Policy

Small business group reports some victories in new legislation. Meanwhile, no matter how the new regulations shake out, one small business group reports some victories for small businesses including one provision that should prevent interference with small companies who offer flexible payment options and other specialized financial services to their customers. National Federation of Independent Business

Healthcare

Time for another red alert on healthcare! Turns out the new legislation has another nasty surprise in store and it could be particularly hard on small businesses. Increased reporting requirements to meet compliance could be a menace to every small business without an army of accountants to keep track of things. Want to learn more? Read on. Bloomberg BusinessWeek

Have you tried the healthcare tax credit calculator? On the positive side, as you’ve no doubt heard, there may be some tax credits out there if you’re a small business and already providing healthcare for your employees. How much and does your small business qualify? Ah, well, those are the big questions. Though you probably won’t see enough of a credit to change what you’re doing now, if you already do offer healthcare, it may pay to have a look. National Federation of Independent Business

Operations

How to grow your business on a budget. Regardless what the outcome of regulatory changes or their effect on capital for investment in new startups, once you’ve gained funding, it’s crucial to use it wisely. As a high powered VC who’s also spent time on plenty of startup boards of directors, Fred Wilson has seen this from a couple of different perspectives. Here’s his advice. A VC

3 Comments ▼

3 Reactions

  1. Small is beautiful, the regulation is ugly.

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