Small Business Owners Sitting on Cash?

During the 48th annual National Small Business Week, members of the House of Representatives' Small Business Committee are touring the country, hearing from small business owners themselves what their biggest struggles are in today's economy.

Rep. Joe Walsh, (R-IL), is on a listening tour through Thursday throughout Illinois, hearing from small business owners in various industries. Walsh said once the tour is complete, he will have met with more than 200 entrepreneurs, many of whom have voiced anger, uncertainty and fear during the sessions.

"Their biggest frustrations and fears are coming from how much more difficult it is to do business," he said. "The increase in regulations that businesses have to deal with and real angst with rising gas prices—there is a sense among small business men and women that they are afraid to make any decisions because of the uncertain climate."

Despite national banks like Chase and Wells Fargo increasing their lending commitment to small businesses in 2011, Walsh said smaller banks are struggling to provide the capital needed for small business owners.

"A lot of the legislative things we’ve done benefit big banks," he said. "There is a concern that we will double-dip back into a real downturn again."

Rep. Chuck Fleischmann, (R-TN), will be handing out Economic Excellence Awards beginning this fall to small businesses that are driving their own local economies. Fleischmann said today’s small business owners are rallying to remove government impediments to their success.

"The average person doesn't realize how burdensome this is for small business owners," he said. "Small business is the backbone of America. We want real job creation and a fertile business environment for small business owners."

The biggest concerns for small businesses today are availability of capital, and predictability of tax rights, Fleischmann said.

"They are not hiring like they should be because they are scared," he said. "They are [hoping] people in elected office … stand up and support them with actions like the 1099 repeal."

Committee Chairman Rep. Sam Graves, (R-MO), said small business owners concerns vary depending on the industry they are in. Many voiced concerns with gas prices, regulation and taxes, Graves said, adding today’s entrepreneurs need to have a more solid sense of economic stability before hiring or investing.

"They are not expanding until they know what is coming around the corner," he said.

One bright spot in this cloudy economy is credit loosening for small businesses. Graves said the severe credit freeze of the past few years has been thawing, which should be good news for job growth.

"Small business is America's engine of job creation," he said. "They generated 64% of net new jobs over the past 15 years, according to the Small Business Administration—it's where the majority of jobs are coming from."

More than anything Walsh said he hopes the takeaway from this year's National Small Business Week is that small business owners want reassurance.

"We will not see an increase in jobs or expansion and growth in small business until our government creates a more certain environment for them," he said. "A lot of small business owners are waiting and holding back. They are sitting on their hands and cash because they are afraid of what Washington is doing."