WASHINGTON—Government action has the potential to help or hurt small businesses in the next few years, according to speakers at an auto aftermarket conference. ``If you fall asleep at the switch, you'll wake up three or four years from now with some very unpleasant circumstances,'' said Jere Glover, chief counsel for advocacy for the Small Business Administration, at the Specialty Equipment Market Association's second annual ``Salute to the American Automotive Performance and Motorsports Industry,'' held in Washington May 6-7.
Mr. Glover was joined by two Republican senators—John Ashcroft of Missouri and Harry Reid of Nevada—in detailing issues of major interest to small business.
Growthwise, the news couldn't be better for small business, Mr. Glover said. New business starts have set a record each of the last three years, he said, while small-business failures have declined noticeably during the same period.
``Small business created 10 million jobs between 1991 and 1995, while big business lost 3 million,'' he said. Yet small business still gets less than 10 percent of the available bank financing each year.
Part of the problem is the legal expense of starting or expanding a business. ``It costs $10,000 to $20,000 just to do the paperwork to create a partnership,'' Mr. Glover said. ``That's why the SBA has a draft form for you.''
The SBA ranks every bank in the U.S. as to how friendly they are to small business in terms of loans, Mr. Glover said, though that information now is available only from the agency's web site.
Among pending environmental regulations, the Environmental Protection Agency proposal to tighten air quality standards for ozone and particulate matter could prove very damaging to small business, Mr. Glover said.
``They aren't saying how the standards are to be met,'' he said. "They're letting that be decided downstream, by the cities and states, who could very well decide that they simply won't allow some sorts of activities to occur.''
Product liability reform would be a great boon to small business, according to Mr. Ashcroft.
``Forty-seven percent of U.S. businesses have products they have withdrawn or not developed because of our current liability framework,'' he said. "Meanwhile, 50 to 70 cents of every dollar in liability judgments go to the trial bar.''
Because of the trial bar's (i.e. lawyers') opposition, Congress has not been able to enact product liability reform, except incrementally.
But the incremental approach does provide some test cases, Mr. Ashcroft said. ``When the aviation industry was exempted, some claimed it would result in aircraft companies building lousy airplanes. But that's just not so.''