Six months into her tenure as head on the Small Business Administration, Linda McMahon sees a split among many small business owners – they are increasingly optimistic, she says, but some are held back by their inability to get loans or find the right workers for jobs which are staying open.
“Entrepreneurs are willing again for being bigger risk-takers than they have been during the last eight years,” McMahon said from a phone interview this week with The Associated Press. But, she said, there\’s also lingering effects of the Great Recession, and “I do believe there is still a caution.”
McMahon’s observations matched owners’ self-assessments in surveys including ones released by Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet Corp. and through the National Federation of Independent Business.
She also named a number of the stumbling blocks that many owners have cited together with a scarcity of loans and workers: regulations, taxes as well as cost of health care, all issues President Mr . trump has pledged to address.
McMahon has spent days gone by six months traveling around the country, meeting owners within their companies and events like forums and roundtables. She visited the SBA after like a big donor to the Republican Party and two unsuccessful runs for the Senate from Connecticut. She\’s a background in business; she and her husband, Vince, founded and built World Wrestling Entertainment Inc., now a openly traded sports entertainment company. She resigned as CEO in 2009 and last year co-founded Women’s Leadership LIVE, which promotes opportunities for ladies in business and public service.
What’s providing strength to hiring?
Although small businesses are hiring more now than during the recession, many are conservative, hesitant to add staffers unless they have enough start up company to justify expanding their payrolls.
But some owners want to hire, and can’t. McMahon echoed the opinion of many: They can’t find workers when using the skills to match their companies’ needs.
Jobs for skilled workers like carpenters, electricians and welders tend unfilled, as are technology positions like computer code writers, McMahon said. Companies that provide services like heating, ventilation and air conditioner are struggling to find workers to put in and repair equipment.
“There’s too little interest, or there is not a qualified workforce to come in,” McMahon said, adding that at most companies, skilled workers are age 50 to 55. Owners are telling her, “I don’t have that next group that’s gonna take over these jobs.”
Another think about the worker shortage is an unemployment rate that’s in the 16-year-low of 4.3 percent – you will find fewer people looking for jobs. Workers will also be harder to come by if legislation to restrict immigration, a bill backed by Trump, becomes law. A report released by the University of Pennsylvania’s Wharton School projected that if the bill becomes law, domestic workers won’t fill all the jobs that have been held by immigrants would you no longer be allowed in the U.S.
Some solutions are originating from companies ranging from large ones like Boeing to small manufacturers that were donating money, equipment or expertise to community college and high school students to practice them for such jobs, McMahon says.
This continues a trend constantly in place for decades, though. In 1988 the Commission for the Future of Community Colleges recommended that vocational schools work with companies to train students with the aim of their getting jobs upon graduation, and schools country wide subsequently began working with employers on training programs.
McMahon believes that training will trigger entrepreneurship: “When you get those skills, you could start your own business.”
She pointed in an executive order Trump signed in June that roughly doubled to $200 million the taxpayer money assigned to learn-and-earn programs under a grant system called ApprenticeshipUSA. The cash was to come from existing job training programs instead of new line in the proposed federal budget, which may slash funding for the Labor Department’s job training programs by using a third.
Small business lending
Small businesses, particularly the youngest, tiniest and those properties of women and minorities, have historically stood a hard time getting loans. Trump’s steps to roll back aspects of the financial regulation law generally known as Dodd-Frank would help banks lend more to small business owners, McMahon said.
A report issued by Treasury Secretary Steven Mnuchin in June proposed relaxing many of Dodd-Frank’s requirements, including those found on smaller banks. The community banking industry and some small business advocates have declared that the law, enacted in response to your 2008 financial crisis, has imposed regulations on small banks making it harder for them to lend to small companies, and to stay in business themselves.
Supporters of Dodd-Frank desire to keep the law on the books to ensure that banks cannot engage in the lending and investing practices that led to the collapse of hundreds of lenders including big investment banks Lehman Brothers and Bear Stearns.
Small business lending has improved for the reason that worst days of the recession; the Federal Deposit Insurance Corp. counted $331 billion in industrial and commercial bank loans under $1 million since Dec. 31, the most recent figures available. Lending dropped into a low of $279 billion after September 2012. However, the Pepperdine-Dun & Bradstreet survey found only about a third of companies with revenue under $5 million were successful when you get bank loans in the first 4 months of the year.
McMahon acknowledged that banks should better serve the needs of girls and minority business owners. The administration is “being sure our lenders understand what our expectations are compared to having women and minorities on equal footing whenever they come in” to apply for loans, she said. Women businesses need to be better advocates by themselves, McMahon said.
“We’ve found that women aren’t as aggressive at promoting themselves and putting themselves forward as men, although more women are starting businesses and having a better success rate,” she said.
Many owners including women need help in developing their investor business plans, and McMahon noted they can search for help from SBA-sponsored programs including Online business Development Centers, Women’s Business Centers and SCORE, the organization that gives free counseling to small companies.
Trump’s proposed budget for the fiscal year that begins Oct. 1 cuts the SBA’s appropriation by nearly Five percent from the current level. But McMahon declared that won’t affect the agency’s ability to help small businesses.
“We’ve checked our programs across the board and then we found that had some duplication with our programs. We also have some workforce positions that have not been filled and we’re not planning to fill,” she said. “It won’t change up the effectiveness of the SBA to do the programs it should be doing.”