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The access to capital challenge, due in large part to Dodd-Frank, creates a stricter regulatory environment for lenders and borrowers. While lenders have boosted small-business lending recently, regulators are still rejecting quality loans, unnecessarily and unintentionally holding back job creation. For every $1 million lent to franchise businesses, 34 new jobs are created.
Regarding regulations, the House has already passed bills addressing the overreach of the National Labor Relations Board and the health care law. A recent Hudson Institute study showed 3.2 million jobs would be put at risk because of the employer mandate provision in the health care law, which forces employers to offer coverage or pay a penalty. A bipartisan group of more than 200 lawmakers is cosponsoring bicameral legislation to repeal the mandate.
Unfortunately, these issues will take leadership and a willingness to compromise by both parties that is unlikely to come this year.
In the meantime, Congress should move swiftly to pass the payroll tax extension for the rest of the year, while also retroactively applying many business tax extenders that small-business owners will continue to rely on in the absence of a comprehensive solution to simplify the tax code. These extenders, which expired last year, include the 100 percent bonus depreciation; 15-year straight-line recovery for qualified leasehold improvements, restaurant buildings and retail improvements; and the Work Opportunity Tax Credit for lower-skilled workers and the long-term unemployed, among others.
Passing them now would give small-business owners much-needed confidence in Washington’s ability to get something done that can actually help them grow. Now, wouldn’t that be something.
Steve Caldeira is president and CEO of the International Franchise Association.