While entrepreneurs focused on survival, Washington rewrote the rules. A breakdown of what’s changed—and how to stay ahead.
As we celebrate National Small Business Month this May, many entrepreneurs are heads down—managing payroll, shipping product, chasing payments. But while you’ve been busy running your business, Washington has been equally busy reshaping the environment in which you operate.
Over the first 100 days of President Donald Trump’s second term—January 20 through April 29, 2025—the administration has enacted a series of policy changes with direct implications for America’s small businesses. From federal contracting and regulatory shifts to budget freezes and tax reform efforts, the ground is shifting beneath Main Street. And if you’re not paying attention, you could miss changes that impact your access to capital, your workforce model, or your competitive edge.
Here’s what every entrepreneur should know about the Trump administration’s early moves—and how to navigate what comes next.
1. SBA Lending Surges Amid Structural Reforms
The U.S. Small Business Administration (SBA) reported an 80% increase in loan approvals during the first 100 days, totaling approximately 26,000 loans worth $12.6 billion. Notably, there was a 95% increase in loans to businesses with five or fewer employees and a 56% rise in loans for new startups. (sba.gov)
However, these gains are accompanied by significant structural changes within the SBA. The agency announced plans to reduce its workforce by 43%, aiming to return to pre-pandemic levels and save taxpayers an estimated $435 million annually by 2026. Additionally, the SBA has terminated or paused over 120 contracts, resulting in about $3 billion in future savings. (sba.gov)
Why it matters:
While increased loan approvals suggest improved access to capital, the agency’s downsizing and contract terminations may affect the availability of support services and resources for small businesses.
2. Federal Contracting: Streamlining Processes
The administration has taken steps to simplify federal procurement processes. Executive Order 14173 eliminated certain compliance mandates related to workforce diversity, shifting federal contracts toward a merit-based approach.
Additionally, according to the SBA the percentage of federal contracts awarded to small businesses increased from 18% to 23% over the last three months, indicating a potential rise in opportunities for small business participation in federal projects.
Why it matters:
Simplified procurement processes may reduce administrative burdens, but the removal of diversity mandates could impact businesses that previously benefited from such provisions.
3. Tax Policy: Potential Extensions of TCJA Provisions
Efforts are underway to extend key elements of the 2017 Tax Cuts and Jobs Act (TCJA), including the 20% qualified business income deduction for pass-through entities. A House budget resolution passed in March supports these extensions, aiming to provide continued tax relief for small business owners.
Why it matters:
If enacted, these extensions could offer ongoing tax benefits for small businesses. However, entrepreneurs should stay informed about legislative developments that may affect their tax planning strategies.
4. Regulatory Rollbacks: Reducing Compliance Costs
The administration has reinstated a deregulatory framework directing agencies to repeal ten regulations for every new one. This initiative aims to reduce compliance costs and streamline operations for businesses.
Why it matters:
While reduced regulations can lower operational costs, it’s essential for businesses to understand how these changes may affect industry standards and compliance requirements.
5. Labor Policy: Revisiting Independent Contractor Rules
The Department of Labor (DOL) is currently reconsidering the 2024 rule that made it more challenging for companies to classify workers as independent contractors. This month the DOL announced that it is reviewing and developing the appropriate standard for determining employee versus independent contractor status under the Fair Labor Standards Act (FLSA). This move could allow for more flexible engagement of gig workers and freelancers.
Why it matters:
Small businesses heavily rely on independent contractors and 1099 workers for their everyday operations. This potential change may simplify hiring practices. However, it’s important to monitor state laws, which may have different classifications and requirements.
Navigating the New Landscape: Recommendations for Entrepreneurs
In light of these developments, here are actionable steps entrepreneurs can take:
- Stay Informed:
Regularly consult official sources such as sba.gov and the Federal Register to keep abreast of policy changes affecting small businesses. - Engage with Local Resources:
Utilize local Small Business Development Centers (SBDCs), SCORE chapters, and community banks for mentorship, training, and access to capital. - Review Business Structures:
Assess your business model and workforce classifications to ensure compliance with evolving labor laws and tax regulations. - Plan for Tax Changes:
Consult with tax professionals to understand how potential extensions of TCJA provisions may impact your business and to develop appropriate strategies.
Final Thoughts
National Small Business Month serves as a reminder of the vital role entrepreneurs play in the economy. As federal policies continue to evolve, staying informed and proactive is crucial. By understanding and adapting to these changes, small business owners can position themselves for sustained growth and success in an ever-changing landscape.
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