A new study reveals more than 80% of small business owners feel the stimulus bill was designed to aid major corporations, with the excepti0n of three specific areas. The study, conducted by Pepperdine University, revealed small business owners felt the act lacked overall effectiveness for two reasons:
- a lot of the language included in the bill was so dense that companies which didn’t have an entire legal team at their disposal weren’t in a position to fully understand, or take advantage of, most of its provisions, and
- several of the programs implemented as a result of the act weren’t put in place quickly enough to keep small businesses from bleeding substantial revenue (or going under altogether).
Despite that, there are three areas where most small business owners agree the act has had a positive impact:
- Elimination of excess fees on federal loans: With so many banks refusing to lend to small businesses, the stimulus provided a huge break by streamlining the process, and waiving all excess fees on small business loans, so companies didn’t have to worry about digging themselves deeper into debt in order to secure loans (the Small Business Association approved $22 billion in loans between Feb. of 2009 and Aug. of 2010).
- Tax breaks: The stimulus provided huge tax relief to small businesses, helping them collectively save millions of dollars over the past two years. In many cases, that money was reinvested in the company, creating additional revenue.
- Percentage of government contracts awarded to small businesses: Perhaps the most valuable provision was a mandate that at least 23% of annual government contracts be given to small business owners. Last year, a third of all government contracts were awarded to small companies.
Source: “Small Businesses Weigh Recovery Act,” by Emily Maltby, Wall Street Journal, 2/24/11.