Central Louisiana News

U.S. Senators Bill Cassidy (R-LA) and Jeanne Shaheen (D-NH) introduced the Helping Small Businesses to Hedge Risk and Insure against Volatile Expenses (Helping Small Businesses THRIVE) Act on September 17, 2024. The legislation directs the U.S. Small Business Administration (SBA) to establish a program that enables small businesses to lock in the cost of commodities such as gasoline and lumber, thereby protecting them from future price volatility.

“Small businesses are particularly vulnerable to high inflation costs,” said Dr. Cassidy. “The Helping Small Businesses THRIVE Act gives small businesses in Louisiana the tools they need to create jobs, expand operations, and compete with large companies.”

Senator Shaheen emphasized the importance of small businesses in the economy: “Small businesses are the backbone of our economy and deserve a level playing field. By empowering them to lock in prices for key commodities, we can help small businesses compete with larger businesses, create good-paying jobs, and expand their business.”

John Dearie, president of the Center for American Entrepreneurship (CAE), expressed support for the bill: “Businesses grow and create jobs most effectively when they can plan with certainty. Sudden changes in business conditions — especially unexpected increases in critical input costs — can damage or destroy even the best-run businesses. That’s why large companies commonly protect themselves from input inflation by locking in costs by way of sophisticated financial derivative instruments. But most new and small businesses lack the resources and expertise necessary to effectively protect themselves. The Helping Small Businesses THRIVE Act will address that vulnerability by establishing a new program administered by the Small Business Administration that will finally provide new and small businesses the input price protection enjoyed for years by large companies.”

John Arensmeyer, Founder and CEO of Small Business Majority, also supported the initiative: “With the cost of doing business rising rapidly in recent years due to inflation, small businesses have been forced to choose between raising their prices or lowering their margins. No small firm wants to be in that position, which is why we’re glad to see a bipartisan solution like the Helping Small Businesses THRIVE Act that will help lower costs and ultimately allow small businesses to better compete with large corporations that are less sensitive to commodity price spikes.”

Todd McCracken, President & CEO of National Small Business Association, highlighted how crucial this legislation is: “It’s no surprise: small companies are inherently the most vulnerable to market fluctuations and changes in the cost of inputs they need to keep their businesses running... This bill is a tremendous first step towards leveling the playing field for small companies across the country.”

The proposed SBA program aims to provide cost-certainty for essential commodities like diesel or electricity through hedging options already available in liquid markets. The program would initially focus on gasoline, diesel, natural gas, electricity, and up to three additional commodities based on feedback from small businesses.

Eligible participants would exclude traders and financial firms ensuring it benefits genuine small enterprises rather than speculators.

For more information on this legislation, a one-pager is available.

###