Anecdotes alone cannot convert policy- makers. Before we can convince a federal agency that small businesses are disproportionately affected by many regulations, we must demonstrate those costs. For instance, in a study of regulatory costs just released by the Office of Advocacy, the overwhelming costs of engineering controls and paperwork weighed heavily on small businesses. Up-front costs are daunting to a small firm that may have to sink more capital into equipment and cash flow supporting payroll. It is tough to get a traditional bank loan for regulatory compliance.
Bankers prefer the promise of new markets or products.
So the Office of Advocacy's effort to study - and improve access to capital is also a vital link in changing government culture. With this government-required information, we have opened some new avenues for small businesses' efforts to gain access to capital. The small business lending studies have become a staple, providing more information to the market and encouraging traditional bank lenders to woo the small business customer. States are also raising the threshold of achievement in small business initiatives. I was amazed to hear how underserved sectors have championed programs that fit their needs.