Today's Hotelier - February 2018 - 26

SMALL BUSINESS

SQUAREPLUM/SHUTTERSTOCK.COM

 3-MINUTE READING TIME

When small businesses
prosper, America prospers
Why America's prosperity relies on small businesses prospering, too.
by ALFREDO ORTIZ

E

N T ER I NG
F EBRUA RY
means that we are quickly
approaching Valentine's
Day - a holiday loved by
some and abhorred by others. But just as Valentine's
Day is a time to exchange gifts and
well-wishes with loved ones, policymakers should plan on entering into
a similar reciprocal relationship with
small businesses.
When small businesses are doing
well, America is doing well. They are
responsible for two-thirds of all new
job creation and are the engine of wage
growth and community expansion. So
by implementing policies that help them,
we give a boost to all Americans.
One of the biggest shackles currently
attached to our country's small business
entrepreneurs are regulations that dry up
their access to financial credit - meaning it's more difficult to get a bank loan.
Without adequate lines of credit, small
businesses are not able to expand, and
aspiring entrepreneurs are not able to get
their businesses off the ground.
Bernie Marcus, the founder of the
organization I represent - the Job
Creators Network - often tells the story
of how it would have been impossible
to build his wildly successful hardware
retailer, The Home Depot, in today's

business environment. The overregulation and lack of access to credit would
have halted operations of the now retail
giant before the first tool box or piece of
lumber was sold. It's stories like these
that our lawmakers need to hear.
But what is the biggest obstacle
standing between aspiring entrepreneurs and sufficient credit lines? It is
a set of regulations passed into law in
2010 called the Dodd-Frank Wall Street
Reform and Consumer Protection Act.
While the bill was supposed to prevent
another financial collapse brought on by
big Wall Street banks, it ended up harming the small community banks that are
the lifeblood of Main Streets and small
businesses across the country.
The 2,300-page law levies a number of new regulations onto banks of
all sizes. But unlike well-established
large banks, small community banks
don't have the resources to hire legions
of compliance officers and specialists
to tackle the additional mountains of
banking regulations. In fact, according
to the St. Louis Federal Reserve, banking
regulations add $4.5 billion of compliance costs onto small bank ledgers each
year. And since the passage of DoddFrank, more than 1,700 banks have shut
down - accompanied by relatively few
new bank formations.

26  | FEBRUARY 2018 | TODAYSHOTELIER.COM

The real kicker for small businesses
is that roughly 50 percent of their loan
capital originates from these small community banks. Larger financial institutions have a concrete set of criteria
used to assess the worthiness of a loan
request, which many times does not
fit well with small business owners.
Instead, many of these entrepreneurs
rely on small community banks - which
have alternative criteria sets - for vital
cash injections. So as small banks
disappear and are engulfed by larger
ones, small enterprises starve for much
needed investment.
Attempts have already been made to
right this wrong. For example, Senator
John Kennedy introduced legislation
last year that would exempt financial
institutions with less than $10 billion
of assets from the Dodd-Frank regulations. Unfortunately, it didn't see any
movement, but it does create a precedent to curb such harmful regulations
going forward.
America relies on small businesses for
our prosperity and economic spark. It's
time we return the favor to small businesses and give them the opportunity
to do the same.
■
Alfredo Ortiz is the president and CEO of
the Job Creators Network.


http://www.TODAYSHOTELIER.COM

Table of Contents for the Digital Edition of Today's Hotelier - February 2018

Letter From the Chairman
Letter From the President & CEO
Government Affairs
CEO View
The Great Extended-Stay Boom
12 Easy Pieces for a Hotel Renovation
Key Money Incentives: To Take or Pass?
How ADA Compliance Laws Affect Your Hotel Website
When Small Businesses Prosper, America Prospers
Hotel Financing Q&A
AAHOA @ Industry Events
Aahoa Founding Members
Aahoa Vendor Partners
Classifieds
Advertiser Index
Today's Hotelier - February 2018 - Intro
Today's Hotelier - February 2018 - cover1
Today's Hotelier - February 2018 - cover2
Today's Hotelier - February 2018 - 3
Today's Hotelier - February 2018 - 4
Today's Hotelier - February 2018 - 5
Today's Hotelier - February 2018 - 6
Today's Hotelier - February 2018 - 7
Today's Hotelier - February 2018 - Letter From the Chairman
Today's Hotelier - February 2018 - 9
Today's Hotelier - February 2018 - Letter From the President & CEO
Today's Hotelier - February 2018 - 11
Today's Hotelier - February 2018 - Government Affairs
Today's Hotelier - February 2018 - CEO View
Today's Hotelier - February 2018 - The Great Extended-Stay Boom
Today's Hotelier - February 2018 - 15
Today's Hotelier - February 2018 - 16
Today's Hotelier - February 2018 - 17
Today's Hotelier - February 2018 - 12 Easy Pieces for a Hotel Renovation
Today's Hotelier - February 2018 - 19
Today's Hotelier - February 2018 - 20
Today's Hotelier - February 2018 - 21
Today's Hotelier - February 2018 - Key Money Incentives: To Take or Pass?
Today's Hotelier - February 2018 - 23
Today's Hotelier - February 2018 - How ADA Compliance Laws Affect Your Hotel Website
Today's Hotelier - February 2018 - 25
Today's Hotelier - February 2018 - When Small Businesses Prosper, America Prospers
Today's Hotelier - February 2018 - Hotel Financing Q&A
Today's Hotelier - February 2018 - AAHOA @ Industry Events
Today's Hotelier - February 2018 - 29
Today's Hotelier - February 2018 - Aahoa Founding Members
Today's Hotelier - February 2018 - 31
Today's Hotelier - February 2018 - Aahoa Vendor Partners
Today's Hotelier - February 2018 - 33
Today's Hotelier - February 2018 - 34
Today's Hotelier - February 2018 - 35
Today's Hotelier - February 2018 - 36
Today's Hotelier - February 2018 - 37
Today's Hotelier - February 2018 - 38
Today's Hotelier - February 2018 - 39
Today's Hotelier - February 2018 - Classifieds
Today's Hotelier - February 2018 - 41
Today's Hotelier - February 2018 - 42
Today's Hotelier - February 2018 - 43
Today's Hotelier - February 2018 - 44
Today's Hotelier - February 2018 - 45
Today's Hotelier - February 2018 - Advertiser Index
Today's Hotelier - February 2018 - cover3
Today's Hotelier - February 2018 - cover4
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