Small Businesses Consider Impact of Stimulus Plan

February 24, 2011  |  

(Wall Street Journal) — In the two years since President Barack Obama signed the $787 billion Recovery and Reinvestment Act into law, some small-business owners attribute their companies’ survival to the stimulus package—yet many say the provisions in the 1,100-page law have fallen short of their expectations.

Some 83% of small, closely held companies say that publicly traded companies got the bulk of stimulus benefits, according to Pepperdine University’s Private Capital Markets 2011 Economic Forecast Report, released in January. That’s in line with a survey conducted in February 2010 by Discover Financial Services, in which 70% of owners said that the stimulus had no impact on their business.

For many business owners, the stimulus package—which green-lighted credit-access programs, introduced new tax breaks and opened up contracting opportunities—was too unwieldy to understand.  “When small businesses are faced with a complex menu of options, they don’t have the resources to investigate all the opportunities,” says John K. Paglia, a senior researcher for the Pepperdine report. “Any distraction away from [running a business] puts the business at an increased probability of failure.”

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