2017 Promises Big Changes For Small Business
The New Year under the New Administration brings fresh optimism and changes for small business in America. What are the 3 Big Changes small businesses can anticipate in 2017?
Higher Sales, Lower Taxes For Small Business
Small businesses are quite bullish about their future after Donald Trump got elected as the President, and this is indirectly evident from the consumers picking up their shopping habits. e.g. "people who had put off fixing their cars have decided it was time to get them serviced" at Dean Bingham's auto shop in Greenville, SC according to this story in LA Times. Business owners are expecting lower taxes and reduced regulations, including parts of the healthcare law, under the Trump administration. Further, Donald Trump's nominee for labor secretary, the CEO of Carl's Jr., Andy Puzder, could make key changes on overtime pay and make the law more business friendly. Owners believe these conditions will create a better operating environment for higher sales and reduced taxes in 2017.
Rise In Small Business Optimism
According to this Wells Fargo survey, small business optimism is at the highest point in eight years. The business owners' survey was taken shortly after the elections between November 11-17, 2016. "The overall Optimism Index score increased significantly to 80 in November, up 12 points from July and up 26 points from a year ago. This represents the highest small business owners optimism reading since January 2008, and the largest quarterly increase in a year."
Why are U.S. small business owners so optimistic? "Forty-five percent business owners expect an improving operating environment for their business in 2017. Not only that, these owners expect that their finances will markedly improve in 2017."
Easier Access To Small Business Capital
The Federal Reserve increased the interest rate by 0.25 percent in 2016, a much lower increase than previously anticipated. This is a huge boon for small business borrowers. Most importantly, there is growing confidence in the economy, especially small business performance. "According to the newly released Biz2Credit Small Business Lending Index report for November 2016, loan approval rates at both big banks and institutional lenders continued to rise, improving to new highs. Further, small banks showed an increase in small business loan approval rates." Another surprising trend: Loan approval rates at institutional lenders. Loan approvals increased to a new Index high of 63.3% in November 2016.
Not only are the large banks and institutional lenders approving higher percentages of business loan applications, but also smaller banks granting about half of the requests. This easier and faster access to much-needed small business capital helps owners expand their business with new products, new hiring plans, and new markets in 2017 and beyond.
How did your business perform in 2016? Are you equally optimistic about your business in the new year? Please share your comments here and join the discussion.