In their first Presidential debate of 2012 election, Mitt Romney and Barack Obama sparred over whose policies would better help small businesses and the needs of the middle class. Both candidates talked about small business and job growth right from the start.
Mitt Romney noted, that "small business creates the jobs in America,” and submitted the idea that during the Obama years, entrepreneurship has declined "because new business startups are down to a 30-year low.”
Both candidates argued over which firms should be counted as "small" businesses. Each supports tax breaks for small companies and both want to bolster training for workers to be able to land jobs in our 21st century economy. Specifically, Mr. Romney pointed out that more than half of the country's workforce is employed by small business owners who are taxed at individual tax rates, not corporate rates. Thus, he maintained that raising the top rates could prevent some of the top earning small business owners from hiring new employees.
President Obama trumpeted the fact that he reduced taxes on small businesses 18 times. He also fired back at his Republican challenger over his definition of what a "small" business is and that many of them do not need further tax reduction. He added that by Governor Romney’s definition, there are "a whole bunch of millionaires and billionaires who are small businesses.” Class warfare is always part of politics.
The debate also touched health care reform and deficit reduction, and frequently the discussion referred back to an issue's impact on small business.
From the get-go, Mitt Romney talked about his Five Points to a stronger economy: energy independence, bolstering international trade, training for American workers and building the skill sets they need to succeed, balancing the budget, and championing small business. He looked "Presidential" and demonstrated the conviction and good natured confidence that made him so successful in the private sector.
An important thing missing from the discussion was the availability of capital for small businesses. Surprisingly, President Obama did not highlight the amount of SBA loans granted during his term. The role of the Small Business Administration has been critical in helping entrepreneurs secure funding during some of the tightest credit markets we have ever seen. This has been a strength for Mr. Obama, and something for which he should have claimed credit.
Things have improved since late 2008, but as the many small business owners that approach me for help in getting the funding needed to grow their companies can attest, it is still a challenge for them to secure capital from many banks and non-bank lenders. There is much more that can be done to open up credit markets for entrepreneurs, just as the borrowers can do much to improve their cash flow and creditworthiness.
As most political pundits seem to agree, the clear winner in last night's debate was Mitt Romney. The discussion highlighted business and the economy, which are clearly his strengths. Look for President Obama to be more assertive about his support for small businesses in the future discussions.
This opinion column was written by Rohit Arora, co-founder and CEO of Biz2Credit, an online resource that connects small business owners with 1,100+ lenders, credit rating agencies, and service providers such as CPAs and attorneys via its Internet platform. Since 2007, Biz2Credit has secured more than $600 million in funding for thousands of small businesses across the U.S.