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For many small, innovative businesses, noncompete and nondisclosure agreements ensure fair competition against larger companies, but a balanced, comprehensive solution remains outstanding. Earlier today, NSBA submitted formal comments to the Federal Trade Commission on their proposed new rule that would ban companies from requiring their employees to sign non-compete agreements. Oversight of these type of agreements typically has been dealt with at the state level, however the FTC rule proposes a unilateral change that would give them this oversight. For many small, innovative businesses, noncompete and nondisclosure agreements ensure fair competition against larger companies who have greater ability to lure employees—and their working knowledge of the company—away from a smaller competitor. In addition to its comments to the FTC, NSBA has released a survey on how small businesses utilize noncompete and nondisclosure agreements which shows that the size of the business greatly impacts how likely they are to utilize—and successfully enforce—such agreements. If you haven’t yet filed comments, there’s still time and NSBA is here to help. We have developed template comments that you can personalize and send in through our Action Center. Act soon – the deadline is TODAY, April 19!

Designations of the IRS’ new $80 billion remain a top concern for the small-business community. Last week, the Treasury Department and IRS issued their long-term Strategic Operating Plan outlining intentions for spending nearly $80 billion in funding provided by the Inflation Reduction Act (IRA). A plan spanning 160 pages, the IRS has five main objectives guiding allocations of the funding over the next 10 years. Those objectives include: improved services to help taxpayers; quickly resolve taxpayer issues; focus expanded enforcement on high-dollar noncompliance and those with complex tax filings; improve technology and data; and hire and improve the IRS workforce. Each priority objective describes initiatives and projects designed to achieve these goals within the next decade; however, the document provides little insight into the short-term hiring targets. After the IRA provided the $80 billion to the IRS, NSBA expressed concern about what this would mean for owners’ regulatory burdens. The Biden administration maintains this funding will not increase the percentage of audits against taxpayers earning under $400,000 annually, but the IRS has yet to provide specifics regarding actual audit rates. NSBA will continue to monitor the rollout of these new funds for the IRS, and urges policymakers to focus on improving taxpayer services and response times rather than increasing audits on small-business owners. Read the full report on the IRS plan here, and follow us for the latest.

The number of SBLC licenses has remain unchanged since 1982. After more than 40 years, the U.S. Small Business Administration (SBA) is ending its moratorium on admitting new nonbank lenders to its 7(a) loan program. SBA’s 7(a) program is its flagship loan program facilitated through banks and guaranteed nearly 54,000 loans worth more than $36.5 billion in 2021. The SBA rule published in the Federal Register this week will allow non-depository lenders to apply for Small Business Lending Company Licenses (SBLCs), including fintech lenders. SBA’s new standard on lending is set to take effect May 11, with a purpose of growing SBA’s 7(a) lending base to better serve underserved markets. While the number of 7(a) loan applications continues to increase as more Americans start a small business, the number of SBLC licenses has remain unchanged since 1982. Poised to admit three new SBLCs into the program, the SBA is offering continued assurances that new lenders will not lack oversight or proper service to the nation’s small-business community. Non-bank lenders and fintechs often offer flexible credit options and small dollar loans – services not typically prioritized at traditional banks – and SBA’s rule change is an opportunity for more than 8,000 community banks and credit unions to offer affordable loans quickly in underserved communities. Relatedly, an additional new SBA rule on Affiliation and Lending Criteria for the SBA Business Loan Programs will be effective May 11, with a number of agencies and groups already implementing new lending and data sharing practices to support economic recovery and growth. Under this Affiliation and Lending rule change, the SBA will examine each lender applicant on an individual basis to determine capital requirements to hold a license. NSBA will continue to monitor rollout of these rules. Read the complete SBLC Moratorium Rescission rule here, the Affiliation and Lending Criteria rule here, and follow us for the latest.

Small-Business award season is here! In the lead-up to National Small Business Week (NSBW) April 30 – May 2, the U.S. Small Business Administration (SBA) announced this week their Resource Partners of the Year awards. SBA Resource Partners—which include Small Business Development Centers, SCORE offices and more, are funded in part by the SBA, and provide America's small businesses with technical assistance, training, and access to capital. A record-breaking 10.5 million Americans applied to start a business since 2020 – more than any two years on record. The Resource Partner Awards are just a few of the many awards SBA will be giving out in coming weeks to recognize small businesses, small-business champions and small-business service providers. The awardees will be honored at a ceremony during National Small Business Week. Read more from the SBA and National Small Business Week (NSBW) here, and be sure to register for NSBW’s Virtual Summit May 2-3. NSBA is beginning its own awards process, the Lew Shattuck Small Business Advocate of the Year awards – learn more here.

Believe it or not, there are some striking similarities between being a policy advocate and a special agent. In both roles, success relies on a few key traits: persistence, attention to detail, teamwork, and a desire to make a difference. Does the connection seem unlikely? Look no further than dedicated NSBA advocate and former Department of Defense (DoD) Special Agent Michael Koslow. Michael began his career in public service as a criminal investigator with the Air Force Office of Special Investigations (AFOSI), where he specialized in counterintelligence, federal procurement and fraud cases. After rising through the Air Force’s ranks for 16 years, Michael transitioned to the Department of Defense’s Office of the Inspector General (OIG), living out a movie-worthy career of sting operations, FBI details and foreign defense cooperation deals. Notably, he led numerous high-profile investigations into Medicare and Medicaid fraud, as well as cases related to the False Claims and Foreign Corrupt Practices Acts. Michael also remained committed to his military service throughout his time with the DoD. Upon leaving the Air Force, Koslow grew his leadership profile with the California National Guard. In 2009, he became California’s State Command Chief and represented over 93,000 Guardsmen nationwide on the Army National Guard’s Field Advisory Council. Through his duties with the DoD and the National Guard, Michael grew accustomed to the “mission-first” mindset and adding value to teams without seeking the spotlight. After 31 years of government service, and a concurrent 33 years in the military, Michael took his incisive mind and collaborative spirit to the private sector. He founded Aenigma Investigation Agency (AIA) in 2019, where he and his team provide investigative services for criminal, civil, and administrative cases. His work has yielded impressive results, including a 900% increase of Medicare-Medicaid savings for a national healthcare provider. Upon reaching the private sector, Michael was astounded by the exchange of information, ideas and mentorship around him. According to Koslow, the small-business community he entered offered a “cascading effect” of knowledge, networking and business development opportunities. These experiences, along with a lifelong call to service, motivated Michael to pursue policy advocacy outside of his business. Following his acceptance to NSBA’s Leadership Council, Koslow quickly took to helping organize and mobilize his fellow Californian members around key issues like SBIR reauthorization and streamlining federal procurement practices. Koslow considers his collaborative efforts with fellow members a “tremendous privilege” and values NSBA’s ability to cultivate common goals and interests amongst small-business owners from all walks of life. On the policy side, Koslow has taken advantage of the Leadership Council’s public affairs training, calling the programming a “significant conduit” for connecting with and educating legislators on key small-business priorities. With these tools, Koslow maintains constant contact with his member of Congress and other lawmakers from the California delegation, advising them on small-business issues. When asked what advice he’d like to share with fellow NSBA members, Koslow stressed the importance of mentorship and collaboration, stating, “nobody accomplishes anything on their own.” Seeing how NSBA’s priorities transcend the differences between each member’s small business, Michael believes that sharing, listening, and showing up to learn are the keys to success on the Leadership Council. “If you can walk away with even one new piece of information, your time will be worth it,” he added. To learn more about Michael Koslow and AIA, please visit www.aenigmainvestigations.com.

If enacted, the PRO Act will pose far-reaching negative impacts on workers, small businesses, employers, contractors, and unions alike. This week, NSBA wrote a letter to small-business leaders in Congress to express caution around the Protecting the Right to Organize (“PRO”) Act (H.R. 20, S. 567). If enacted, the PRO Act would allow secondary picketing and protesting from unions at storefronts that happen to sell a brand or item affiliated with a union strike or altercation, enabling protestors to direct aggression toward small businesses and their employees on Main Street. Known as secondary boycotts, the PRO Act would make it legal for protestors to disrupt the flow of business and commerce by granting protections to protests at individual storefronts that have no legal affiliation to the boycott or union dispute at hand. The Act also implements a slew of new and daunting regulations changes that businesses must comply with, increasing the amount of paperwork and red tape that is associated with keeping a small business in compliance with the law. At a time in which business owners are just beginning to step out of the economic turmoil faced during the pandemic, the PRO Act would place more barriers on small-business owners who are simply trying to keep their doors open and heads above water. Follow NSBA for developments on the PRO Act, and read our full letter to Congress here, including specifics on how this ill-crafted policy could harm small business.

Under the required small business lending rule, lenders will collect and report information about the small business credit applications they receive, including geographic and demographic data, lending decisions, and the price of credit. Last week, the Consumer Financial Protection Bureau (CFPB) finalized a rule on lending data to increase transparency of banks’ small-business lending. Specifically, under the new rule, traditional and alternative financial institutions will collect and share information about small-business loan applications, including details about location, demographic aspects, lending decisions and credit pricing. Centered around promoting economic development and combatting unlawful discrimination, CFPB says the data collected will create a more comprehensive market view and empower data-driven decision-making. All lenders making more than 100 small-business loans annually will be required to report data, and lenders originating less than 100 loans per year will still be required to adhere to fair lending laws. The rule also covers diverse forms of credit such as closed-end loans, lines of credit, business credit cards, online credit products and merchant cash advances. Follow NSBA as we continue to monitor the effects of this new rule, and read the fact sheet from CFPB here.

NSBA urges Congress to allow self-employed individuals to fully-deduct the cost of their health insurance.

Lawmakers MUST act to ensure parity in tax rates between the smallest businesses and global corporations.

A free and open Internet helps prevent unfair pricing practices by ISPs.

Minimum wage increases and mandates affect small businesses when it comes to labor costs.

True relief can only be achieved through a broad reform of the current health care system.