Bill Overview
Title: Emerging Business Encouragement Act of 2022
Description: This bill directs the Small Business Administration (SBA) to establish criteria and procedures for small businesses to be designated as emerging business enterprises. The bill provides for various benefits to such enterprises, such as waiving various loan fees and requiring federal agencies to award at least 3% of contracts in each fiscal year to such enterprises.
Sponsors: Rep. Carson, Andre [D-IN-7]
Target Audience
Population: Owners and employees of emerging business enterprises
Estimated Size: 500000
- The bill specifically targets emerging business enterprises by providing them with benefits such as fee waivers and opportunities for federal contracts.
- Emerging businesses often face financial and operational barriers, and this bill aims to provide support to overcome these barriers.
- The SBA will be responsible for establishing criteria and recognizing these businesses, indicating that formal identification of eligible businesses will be required.
Reasoning
- The Emerging Business Encouragement Act of 2022 targets a specific segment of the entrepreneurial landscape: emerging business enterprises. These are businesses that are in their formative stages of growth with potential for rapid expansion. The policy's benefits such as loan fee waivers and contracting opportunities could significantly impact these businesses' trajectories.
- Emerging businesses represent a fraction of the wider small business ecosystem, indicating that not all small businesses will benefit. Out of approximately 30.2 million small businesses, only about 500,000 might fit within the 'emerging' criteria, aligning closely to the SBA's intended target.
- Given the budget constraints set for this policy, an estimated $500 million in year 1, it's likely designed to offer concentrated financial relief and opportunities to businesses with the highest growth potential to maximize economic impact.
- The simulation incorporates individuals from diverse parts of the emerging business ecosystem, including founders of tech startups, employees at green energy firms, and stakeholders in innovative health companies to provide varied perspectives.
Simulated Interviews
Tech Startup Founder (San Francisco, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- This policy could help us with cash flow management early on.
- Federal contracts would provide a stable revenue stream.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Green Energy Entrepreneur (Austin, TX)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 10/20
Statement of Opinion:
- Federal contracts would allow us to expand manufacturing capabilities.
- This policy recognizes the importance of renewable energy enterprises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Biotech Startup Employee (New York, NY)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 14/20
Statement of Opinion:
- This policy might help my company grow quicker, offering more job security.
- Potential for more innovative projects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Small Business Consultant (Charlotte, NC)
Age: 54 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I help businesses to navigate policies and this one is definitely a major positive opportunity.
- Will spur innovation and job creation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Manufacturing Startup Owner (Detroit, MI)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- The fee waivers will reduce hurdles to securing loans.
- Policy focuses more on tech and innovation than traditional manufacturing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 6 |
Software Developer (Seattle, WA)
Age: 26 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 12/20
Statement of Opinion:
- If our company can secure more contracts, it ensures job continuation.
- The policy explicitly helps emerging companies like ours.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Retired Business Owner (Atlanta, GA)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- The policy is too late for someone like me who is retired, yet I'm optimistic for future entrepreneurs.
- More opportunities for minority-owned businesses are needed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Student Entrepreneur (Boston, MA)
Age: 22 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- This sounds exactly like the type of help I need to take my business to the next level.
- I wish there were more resources for younger entrepreneurs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Health Tech Innovator (Portland, OR)
Age: 41 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 9/20
Statement of Opinion:
- The contracting opportunities would allow us to penetrate government sectors.
- This would provide us with ways to offer discounts to underserved populations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 7 |
Food Processing Startup CEO (Miami, FL)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 13/20
Statement of Opinion:
- We could get into larger markets if we had easier access to loans.
- Policy's focus feels more aligned towards tech over food industries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $500000000 (Low: $450000000, High: $600000000)
Year 2: $515000000 (Low: $470000000, High: $620000000)
Year 3: $530450000 (Low: $485100000, High: $638600000)
Year 5: $561497575 (Low: $514206300, High: $676470000)
Year 10: $616114129 (Low: $563238055, High: $740282700)
Year 100: $1100000000 (Low: $1000000000, High: $1200000000)
Key Considerations
- The designation and benefits for emerging businesses could lead to increased entrepreneurial activity, stimulating job creation and innovation.
- Monitoring and evaluation mechanisms must be in place to ensure that the emerging business status is awarded fairly and that the intended economic benefits materialize.
- There might be lobbying efforts from businesses to align with the criteria for emerging business status, which should be strictly managed.