Vice President and Democratic presidential nominee Kamala Harris recently unveiled her economic plan. While there are few specific details regarding small-business owners, her past stance on the issue might provide a glimpse into what she intends to do to help them if she wins.
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On August 14, Harris said in a statement that small businesses are “the backbone of our communities.”
In turn, she also announced that day that a record 19 million new small business applications had been filed under the Biden-Harris administration.
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She Will Continue to Support Minority-Owned Small Businesses
Under the current administration, the Small Business Administration (SBA) “has backed $35 billion in loans to over 68,000 minority-owned small businesses, an increase of more than 13% compared to the entirety of the prior administration,” according to a White House Fact sheet.
In turn, Rohit Arora, CEO of Biz2Credit, said that Harris has focused on expanding access to capital to people who have traditionally been excluded from economic prosperity — something she might continue doing if she wins.
“The agency has tripled SBA lending to Black-owned businesses and doubled small-dollar lending and lending to Latino and women-owned small businesses,” said Arora. “There is no reason to believe that policy would veer away from this path in a Harris-Walz administration if they win in November.”
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Continue Funding for Underbanked Small Businesses
During her time in the Senate and as part of the current administration, Vice President Harris led efforts to invest billions in community development financial institutions (CDFIs), which are mission-driven lenders that specialize in delivering capital to underbanked small businesses, explained Carolina Martinez, CEO of CAMEO Network, California’s statewide micro-business network.
“Those of us in the small business advocacy community expect she will continue this commitment, and we are excited to see how these investments support and sustain the current small business boom,” she added.
While Well-Intentioned, Her Policies Might Hurt Small Businesses
Dave Hebert, economist at the American Institute for Economic Research, argued that while Harris’ previous policy proposals “sound lovely,” unfortunately they would be difficult for small businesses to absorb.
For example, she has advocated for increasing the mandated amount of paid family and medical leave from six weeks to six months.
“While this sounds great, both for mothers and fathers who typically must return to work shortly after the birth of a child, it would be an economic nightmare,” he said. “Someone has to pay for the paid leave and increasing the cost of labor for a small business that is already struggling to stay in the black would force many to close.”
In that same vein, Harris has supported raising the federal minimum wage to $15 an hour.
And according to Arora, this policy would disproportionately hurt businesses that are struggling to pay higher wages during inflationary times.
Finally, Arora added that Harris supports stronger environmental and labor regulations, which hinder small businesses and increase their cost structures.
Widening the “Huge Disconnect”
Meanwhile, other experts are less enthusiastic about what a Harris win could mean for small businesses. For instance, Joe Camberato, CEO of National Business Capital, said that he’s not optimistic about the future for small businesses if Harris wins.
“Right now, small businesses aren’t in growth mode because the economy itself isn’t growing,” he said, adding that small business owners are hesitant to make decisions because they’re worried about what’s coming next.
According to him, there’s “a huge disconnect” between what’s happening on Wall Street and what’s really going on Main Street.
“Small businesses are just getting by, and it wouldn’t take much — a small setback could be enough — to push them out of business,” he said. “We’ve already seen bankruptcy filings double in the last two years, but that’s not getting the attention it deserves.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out Millennial Entrepreneurs: 4 Financial Policies We Want Under a Trump Administration.
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