The Small Business Jobs Act was signed into law on Monday. The new legislation could have an impact on many GAWDA members, seeing as many members fit the category of small businesses. And while the main feature of the act is $30 billion in lending, it is called the Jobs Act, not the Loans Act. The target is 500,000 jobs, and it hopes to help small businesses create those positions by offering access to credit, tax cuts for hiring and write offs for buying equipment.
Is this enough for to get small businesses hiring? We’ll find out soon enough. One thing’s for sure—the Jobs Act has no shortage of skeptics.
A lobbyist for the National Association of Wholesaler-Distributors (NAW)—a GAWDA-affiliated association—is quoted by the Associated Press as saying, “Business doesn’t need credit. Business needs customers. If they don’t have a customer base because demand is down, they’re not going to borrow, because there is nothing for them to borrow for.”
The American Small Business League suggests creating this customer for small businesses by allotting a larger portion of government contracts to smaller companies. “Considering the current state of our economy, I can’t imagine why President Obama and Congress would not support legislation to stop giving small business contracts to large and Fortune 500 firms,” says ASBL President Lloyd Chapman.
Clearly, small business advocates want customers before they will justify spending. Just as customers have tightened their belts, companies have worked to operate leaner and leaner. Who will take the leap and start spending again? We are faced with a chicken-egg situation between customer spending and business spending, and neither side wants to go first.
So how big will the impact be? One GAWDA member I spoke with said it would impact his company very little, since the company is not quick to take out loans. What about you? Will your company take advantage of the new legislation?