Small Biz Sees Big Opportunity in Energy Efficiency

John Arensmeyer

John Arensmeyer

Originally featured on allBusiness.com.

As the nation’s most prolific job creators, small business owners have a lot of expectations placed on them. Small employers in California have an especially tall order, with unemployment at a stark 11.9 percent — nearly 3 percent higher than the national rate.

Small business owners can help pull the economy out of its slump. But if we want our jobs engine to function properly, California needs to help its small businesses put the Golden State back on the road to economic prosperity.

High energy costs are a major problem for small business owners trying to grow and hire. Yet in order to help small firms save money that they can use to expand their businesses, we need bold policies that will not only help boost their bottom lines, but create new market opportunities.

New Fuel-Economy Regs Can Boost Small Business

The Obama Administration announced Wednesday its draft rule to require cars, SUVs, and light trucks to reach 54.5 mpg by 2025, and California is slated to announce new carbon emission standards soon. These standards will not only help California small businesses save money on energy costs, but will create new market opportunities that will help them thrive.

How do we know these policies will help small businesses? Because small businesses say so.

Businesses Support Higher Standards

On Nov. 14, Small Business Majority released an opinion poll that shows 80 percent of California small business owners believe it’s important to increase fuel efficiency in cars and light trucks, and 80 percent also support a federal requirement of 60 mpg by 2025 — a standard even higher than President Obama’s proposed 54.5 mpg standard.

In California, the Air Resources Board is about to release an outline for updating its clean cars program and strengthening carbon emission standards for light-duty vehicles sold in the state. According to our poll, 75 percent of California small businesses support requiring the auto industry to reduce greenhouse gas emissions.

What’s more, 65 percent of these employers say American car companies do not innovate enough, and 79 percent hope the federal government will do more to make them innovate.

Energy Innovation Creates Jobs

California has long led the drive for cleaner, more advanced cars and trucks. There’s no reason to break that trend now. In fact, now’s a better time than ever for the state to take advantage of the job creation opportunities that come with energy innovation.

California small business owners believe the top problem facing small businesses today is the rising cost of doing business, such as higher fuel and energy costs, but 82 percent say improving innovation and energy efficiency are good ways to increase prosperity for small firms.

It’s not just green businesses that believe energy innovation will help them, either.

A Win-Win For Businesses And Consumers

Just 12 percent of California business owners say their business generates revenue directly through the new clean economy. The majority of businesses owners — 82 percent — say they do not. But they overwhelmingly support energy innovation policies, because they know these policies will save them money and pad their bottom line.

Requiring automakers to innovate will drive down fuel and energy costs for Americans across the board; small business owners will have extra cash to grow their businesses, and consumers will have extra cash to spend. That’s a win-win.

In this highly-charged political climate, it’s important to note that survey respondents came from all across the political spectrum: 29 percent of respondents identified as Republicans, 28 percent as Democrats and 42 percent as independents.

The small business owners whose firms make up the backbone of our economy have made their views clear. Higher fuel economy requirements and stronger carbon emission standards will be a boon for small businesses and consumers alike; in California and across the nation, our economy will grow.

Small Businesses To Lawmakers: Give Us Some Credit!

John Arensmeyer

John Arensmeyer

Originally featured in the Huffington Post.

It’s ironic that it takes the CEO of a business as large as Starbucks to draw attention to one of the biggest issues facing small businesses.

Today, Starbucks CEO Howard Schultz will launch “Create Jobs for USA,” a program where a $5 donation at any Starbucks will provide $35 in financing for small businesses. This is real money that will be loaned to small businesses to create real jobs — something our economy desperately needs right now.

Schultz knows our economic recovery depends on small business success. His program asks the American public to stand behind his efforts to remind lawmakers of the unique potential small business holds. With someone this high profile taking action to put small employers back on the hiring track, hopefully the problems small businesses have accessing credit will get some much needed attention. Schultz’s work should be applauded, and imitated. We hope leaders of all stripes are listening to what he is saying: small businesses can’t get credit.

Small employers are struggling; lack of demand and weak sales are part of it, but one of the key barriers to their success — hindering their ability to help remedy the economy’s malaise — is the inaccessibility of credit. Take Laurie Lay, for example. Business was booming for her Richmond, Virginia restaurant, but every restaurant has its slow season. So when a community bank approved her request this year for the $12,000 loan that would keep her doors open, Laurie was ecstatic. To her dismay, funding that the bank expected in August didn’t come through. Come September, Laurie had no choice but to close her doors. Less than a week later she got word from the bank: they’d finally been able to round up private funders to allocate the loans they’d approved for small employers like her. But for Laurie, it was too late.

A recent Pepperdine poll found just 44.5 percent of small business owners who sought loans in the past year were able to obtain them. What’s more, 34.8 percent of respondents agree that of all the policies with potential to create jobs in 2012, increased access to credit is the most likely to do so.

Most of the time, it’s not large million-dollar loans we’re talking about. Small business owners with stellar credit and long-standing businesses can’t secure small loans to help them hire the extra person they need to keep up with demand, or manufacture that next batch of inventory, as is the case for Lee Erickson. Lee’s company, VRX, makes electronic loss prevention products in Maryville, Tennessee. All he needs for each round of product is $20,000 — and four banks turned him down. Luckily for Lee, he can afford to pay for production out of his own pocket. But he wants to expand VRX, and until he is able to get that extra cash boost, he won’t be able to. How can we expect small employers like Lee to create jobs when the credit climate puts a ceiling on their basic ability to do business? Small businesses need room for growth.

With all that said, Congress has worked to give small businesses a hand when it comes to accessing credit. Lawmakers passed the Small Business Jobs and Credit Act last year, which included a $30 billion lending program to help small businesses get credit. Unfortunately, the lending fund wasn’t able to allocate the majority of its funds, and many small businesses continue to struggle.

Just because the fund didn’t fully deliver, should lawmakers give up? When it’s been a rough week and his Friday morning espresso doesn’t stretch through that after-lunch slump, does Howard Schultz call it a day? Of course not. It’s been a long recession, and sometimes it takes more than one shot to fix something in need of a major boost.

Fresh lending policies and programs like Howard Schultz’s are crucial. It will put much-needed cash in the hands of America’s small businesses so they can grow and hire, creating new consumers, which will further stimulate the economy. And with the public awareness the fund aims to generate, small business lending should become a greater priority for lawmakers as they work to pass a jobs plan. The 14 million unemployed Americans, the countless struggling small businesses and our floundering economy need the help, and they need it now.

To help keep small businesses aware of the loan options that are available, Small Business Majority is working to educate entrepreneurs about the various programs and resources in the credit arena. Yesterday, we kicked off “30 Days of Access to Credit,” an online webinar series. Our discussions will provide state-specific information on lending, and are designed to prompt discussion around robust policies that can help give small businesses a much-needed credit jolt. For information on these seminars, click here.