A great strength of small business is its role in renewing the American economy. New and small firms play a key role in the experimentation and innovation that leads to technological change and economic growth. In the research and development stages, before any product is developed or marketed, small high-technology businesses can find themselves in dire need of capital. At this stage, the Government can provide an important bridge by simply directing some of its already planned research to small business sources. Getting Startup Money to Small Business America's small business owners and potential entrepreneurs often have the ideas, the energy, and the willingness to work hard, but face an almost insurmountable challenge in finding the capital they need when it can make a difference-in the early stages.
Financing can be especially costly or more difficult for small firms to find.
Banks are important sources for small firms, but the banking market has been changing rapidly, and small firms are watching to see how the trends in mergers and acquisitions will affect their access to capital. Through studies based on new information available through new Community Reinvestment Act requirements, my Administration has been monitoring these trends carefully. I am proud that we have been able to bring new investment to areas that are especially in need of capital through our empowerment zones and enterprise communities. Relieving Tax and Regulatory Burdens Taxation and regulation, applied equally to large and small entities, can be more burdensome to small businesses, which have fewer resources to meet the same overhead costs of their larger counterparts. I'm pleased that we've been able to reduce the burdens on small firms, first of all by eliminating the budget deficit that has burdened us all.