The Small Business Jobs Act passed by Congress last month aims to help small businesses by lending up to $300 billion nationwide and $18 million in Michigan to small business owners. But despite the efforts of politicians in Washington, business owners in Ann Arbor are skeptical of the bill’s ability to help them.
Though the act would provide credit and funding for all states, Michigan politicians are especially supportive of the bill because of the state’s economic woes. In a press release issued Friday, U.S. Reps. John Dingell (D–Mich.), Sander Levin (D–Mich.) and Gary Peters (D–Mich.) said the bill is one of the keys to promoting economic development in Michigan.
“It is our small businessmen and women who will make Michigan’s economic engine hum again,” Dingell said in the press release. “I expect our state officials to take quick action and make sure we have the increased access to capital that this bill will provide. The new funds provided, as well as tax cuts created by this Congress, will spur growth and hiring on Main Street.”
According to a separate press release by U.S. Senators Debbie Stabenow (D–Mich.) and Carl Levin (D–Mich.), the U.S. Small Business Administration has approved loans for 36 Michigan small businesses.
Despite the loans, some Ann Arbor business owners don’t think the bill does enough to help the types of small businesses that are most commonly found in the city.
Nicola Rooney of Nicola’s Books, an independent bookstore located on Jackson Avenue, said she doesn’t believe the bill will do anything to help her with her business.
“I would be surprised if it could do anything for retail,” Rooney said. “My business is constrained by lack of people buying books.”
John Boyle, the owner of Ann Arbor’s Orbit hair salon on State Street, said he thinks larger businesses that are geared toward manufacturing are more likely to be eligible for the funds.
“We’re probably less in the position to take advantage of (the bill),” Doyle said.
State Street Barbershop owner Bill Stolberg also said that based on past experience, he thinks his business is too small to be eligible for the aid.
“I’ve been in this business 37 years and I haven’t received a dime from any government,” Stolberg said.
While many business owners remain skeptical, Kyle Mazurek, vice president of Government Affairs & Administration at the Ann Arbor / Ypsilanti Regional Chamber of Commerce, said in an e-mail interview that he remains hopeful that the act will have a positive impact on small businesses.
“One of the issues most frequently cited by small businesses seeking to grow in this economy is a lack of access to capital,” Mazurek wrote. “The Small Business Jobs Act seeks to remedy this to a certain degree by, for example, extending and enhancing SBA lending programs, by creating a $30 billion fund for local community banks to lend to area small businesses, by channeling $79 million into the MEDC’s State Small Business Credit Initiative, by providing small businesses with some favorable tax treatment, etc.”
Mazurek added that he thinks the act will be effective in helping small businesses because it addresses the issues they face comprehensively. He wrote that the bill doesn’t just give small businesses access to capital, it also deals with small business tax treatment, support services, exporting and contracting.
But Donald Grimes, a senior research associate at the University’s Institute for Research on Labor Employment and the Economy, wrote in an e-mail interview that it is still too soon to determine which types of businesses will benefit from the bill, adding that he doesn’t have an idea at this point of how effective the bill will be.
“My guess is that it would be a very small positive impact (with the emphasis on small), but I don’t have any solid foundation to base that analysis on,” Grimes wrote.