• NASE President Explains Micro-Businesses’ Plight in Accessing Capital to House Small Business Committee

• Broadband Deployment Bill Would Promote Greater Competition in Telecommunications Industry

• NASE Hosts SBA Swearing in Ceremony

NASE President Explains Micro-Businesses’ Plight in Accessing Capital to House Small Business Committee NASE President Robert Hughes understands how difficult it is for the self-employed to gain the capital they need to start or maintain their businesses. That’s why he represented your views at a roundtable discussion hosted by the House Small Business Committee on March 1.

Hughes explained to the roundtable participants that micro-businesses are usually perceived as a high risk by large banks. In addition venture capital companies do not want to make the small loans that micro-businesses need. These two factors significantly limit micro-businesses’ access to capital.

Hughes further noted, “The NASE represents a vital segment of the American economy, micro-businesses with four employees or less. We speak for our Members and all 14 million self-employed individuals in our nation who have very different needs and capital necessities than a small business with 25, 50 or 150 employees, Thus, with the current definition of small business as 500 employees or under, programs for and research regarding ‘small business’ access to capital do not always reflect the needs of the self-employed.”

Hughes strongly urged the Small Business Committee and participants to find solutions for micro-businesses’ lack of access to capital. He suggested that one solution would be to encourage lending by non-bank financial institutions such as commercial finance companies and private/public sector cooperative organizations. He also recommended expanding the SBA’s small business loans, equipment loans, microloans and venture capital equity investments to businesses with 10 employees or less.

To persuade members of the House Small Business Committee, Hughes referred to results from the “Small Business Economic Indicators 2000”, a report from the Small Business Administration Office of Advocacy. The report states, “Surveys from the Federal Reserve Board show that banks have been tightening lending standards and bank rates have been increasing more rapidly than their costs.” Hughes pointed out that there has been a decrease in small, local banks where a small business owner once had a long-standing, cultivated relationship. Now the self-employed are forced to deal with a new system and staff. This greatly affects lending.

To further build his case, Hughes reported that there are approximately 600 venture capital companies in the Unites States, managing 35-40 billion dollars. These companies only provide about 3% of all business financing in the U.S. Again, the issue for micro-businesses is the high risk associated with new, small and emerging businesses. Most venture capital companies do not lend money in small amounts (i.e. the amount needed by a firm with six employees or less).

NASE President Bob Hughes has taken the first step in bringing your views to the decision makers in Washington, D.C. However, there is still much more work to be done. You can help by writing to your legislators and members of the House Small Business Committee. Visit the Legislative Action Center to find out more about your legislators and let them hear directly from you on this issue. Meanwhile, the NASE will follow debate on this issue every step of the way while protecting your views and your interests.

Broadband Deployment Bill Would Promote Greater Competition in Telecommunications Industry

Because many small businesses are seeking to expand via the Internet, the NASE is closely watching the progress of the “Internet Freedom and Broadband Deployment Act of 2001.” 

The bill would amend the 1996 Telecommunications Act to allow former Bell telephone operating companies to offer Internet service across regional boundaries without approval from the Federal Communications Commission. Thus the bill would foster the extension of high-speed Internet services in rural areas and allow competition with the cable industry. This means that small businesses could increase their marketing capabilities via the Internet. 

The legislation will be sent to the U.S. Senate where it expects to meet great opposition. 

NASE Hosts SBA Swearing in Ceremony NASE President Bob Hughes is diligently working to make key contacts in Washington, D.C. on your behalf. That is why the NASE recently hosted the Small Business Administration (SBA) Swearing in Ceremony for Thomas Sullivan, the new Office of Advocacy Chief Counsel.

“We are very pleased with the confirmation of Thomas Sullivan as Chief Counsel for SBA’s Office of Advocacy. He will be a great advocate for small business,” remarked NASE President Robert Hughes. The NASE met with Mr. Sullivan prior to the event to discuss the NASE’s top legislative and regulatory priorities for the self-employed.

Created by Congress in 1976, the Office of Advocacy is charged with independently advancing the views, concerns and interests of small business. The Chief Counsel does so before Congress, the White House, Federal agencies, Federal courts and state policy makers. The Office of Advocacy intervenes on behalf of small business in the Federal regulatory process as mandated by the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act. 

As Chief Counsel, Tom heads a team of attorneys and economists that work to remove regulatory barriers to entrepreneurial growth, conduct economic research and publish data on small businesses’ contribution to the economy. 

Tom comes to the Chief Counsel position with a strong background in small business issues. Most recently, he was Executive Director of the National Federation of Independent Business (NFIB) Legal Foundation, which provides small business owners guidance on legal issues and promotes a small business agenda in the nation’s courts. 

Before joining the NFIB Legal Foundation, Tom led the Small Business Coalition for Regulatory Relief from 1998-2000 as the NFIB’s Regulatory Policy Counsel. From 1994-1998, he served in the Environmental Protection Agency, and in the Environment and Natural Resources Division of the U.S. Department of Justice.

For more information on Chief Counsel, Thomas Sullivan and the Office of Advocacy, please go to the SBA website at the following address: 
http://www.sba.gov/ADVO/.

For more information, please contact Kristie L. Darien, NASE Director of Government Affairs, at 202-466-2100 or kdarien@nase.org.