The cost of doing business can often leave a business owner in need of small business funding. It can become a struggle to keep enough working capital on hand. On top of the day-to-day expenses, government regulations can play a big part in reducing the amount of capital a business owner has available to dedicate to business growth. Investments in the growth of your business are vital to keep it moving forward. According to a survey conducted by National Small Business Association (NSBA), 40 percent of those surveyed said that due to the cost of regulations, they had held off making a new investment at some point in the past.
Cost of Regulations
The NSBA survey revealed that the average small business spends $12,000.00 a year on regulations. Those surveyed said the two most burdensome regulations are the federal tax code and Affordable Care Act. With the responsibility of regulatory compliance falling to them, 14 percent of small-business owners reported that they spend more than 20 hours per month on federal regulations.
NSBA President and CEO Todd McCracken stated, “This has real-world implications: more than half of small businesses have held off on hiring a new employee due to regulatory burdens.”
The cost of regulations can often impede business growth from hiring and training new employees, purchasing new equipment or opening an additional location.
Proposed Reduction of Regulations
In January 2017, the president signed an executive order pledging to repeal two existing regulations for every new one. While some think the goal is unrealistic, President Trump stated that his administration should be able to cut regulations by 75 percent.
One of the primary concerns of the NSBA is reducing the regulatory burden on small businesses. When responding to the executive order, they stated “Every hour a small-business owner is reading, commenting or complying with a new regulation is time he/she isn’t spending on growing the business and creating more jobs. We look forward to working with the Administration as the many remaining details and decisions are worked through, to ensure that reducing regulations on smaller businesses will be a top priority and that regulatory policy moving forward is maximally effective for small businesses.”
Doing the Research
In addition to the actual cost of regulations, the time invested in researching each of them is time that could be better spent by small business owners. The complexity of regulations requires careful and time-consuming consideration. After doing the research, business owners often discover that many don’t apply to their business, leaving them with the feeling that they have wasted valuable time. Yet, because of the possibility of being fined for non-compliance, the research and time spent are necessary.
In the NSBA’s press release regarding their survey, Chair Pedro Alfonso said “This survey is a clear, quantitative case for why we need regulatory restraint and reform. Our current regulatory burden is not only a strain on job growth, but it is also preventing many would-be entrepreneurs from starting their own business.”
Moving Forward with Small Business Funding
Of course, small business owners will have to wait and see just how much impact this executive order will have. In the meantime, they need options that allow them to invest in and continue growing their business. Alternative finance and online lending have become popular options for small business funding.
At CFG Merchant Services, we can help your business grow faster. We offer a variety of small business funding options and will guide you in choosing the perfect solution for your individual business needs. Our team brings to the table more than 60 years of institutional investment banking experience in the credit, commercial finance, and capital markets.
We are a privately owned-and-operated specialty finance and alternative funding platform. We focus on providing capital access to small and mid-sized businesses (Merchants) in the U.S. that have historically been underserved by traditional financial institutions and may have experienced challenges obtaining timely financing. Contact us or apply online for small business funding today!