The business banking challenges that face small companies these days are seemingly endless. Entrepreneurs face new difficulties every day – whether it's with starting a business, maintaining it or getting it to grow into a larger enterprise, there are always new bumps in the road.
Ideally, business owners would be able to rely on their government for help. In the United States, that's a lot to ask – especially in 2013, as the sequester threatens to eat away at whatever resources Washington might have at its disposal.
But there are a few areas where Congress might be able to lend the small business world a helping hand in the near future. Here's a glance at the ways Washington can help.
Improving the tax code
One of the biggest challenges small businesses face is paying taxes. Not only are the rates exorbitant for some, but the code is overly complex and requires hours of reading and re-reading to fully comprehend.
There's only so much the federal government can do. But there is one bit of encouraging news – the Associated Press recently reported that the House Ways and Means Committee is working on legislation to increase a popular deduction for equipment purchases. If passed, the bill would allow business owners to deduct up to $250,000 in expenses for buying new equipment each year, which would encourage both growth and technological innovation.
There's talk of simplifying the tax code, too, but that's a long-term process that will be nowhere near full resolution in 2013.
Providing easier access to loans
Many small business owners, when strapped for cash and looking for a little help to get through hard times, look for loans to keep them afloat. That's been difficult for many in the past, but CNBC reports that it may soon get a little easier. There's talk of reforming the Small Business Administration (SBA) so that loans could be expanded to include mortgage refinance.
One SBA loan, known as a 504 loan, was previously only used for property purchases and expansions, but a new provision was added to include refinancing as well. That provision is set to expire in September, but if Congress follows through on its pledge to extend it, businesses will have a much easier time getting through financial rough patches in the future.
Enabling more small business investment
There are a lot of people out there with great entrepreneurial ideas who lack the funding to get their plans off the ground. Ideally, that's where government investment should come in, but oftentimes, there isn't enough funding to make that a reality. We're about to see an incremental change for the better, though, as two senators – Louisiana Democrat Mary Landrieu and Maryland Democrat Ben Cardin – are working to increase funding for small business investment.
According to CNBC, the Expanding Access to Capital for Entrepreneurial Leaders Act would raise the level of SBA investment in small businesses from $3 billion to $4 billion. That small bump won't blow you away, but it's a definite step in the right direction.
Raising the minimum wage
This one is a double-edged sword – it will make it easier for more low-income employees to live their daily lives, but it will also make business banking more difficult as companies scrounge for a spare few dollars to add to their payrolls. In any event, the conversation is happening.
President Barack Obama has suggested raising the federal minimum wage from $7.25 to $9.00 per hour, and some lawmakers have suggested taking it even further. According to the Christian Science Monitor, Massachusetts Democrat Elizabeth Warren addressed the Senate recently with her thoughts on a $22.00 minimum wage.
Resources are few and far between in the federal government these days. But Congress still has the power to help small business, and there's reason to believe Washington will do what it can in 2013.