As the 2024 presidential election concludes and a new administration prepares to take over the White House in January, small business owners are already looking ahead. How will Donald Trump’s second term and his economic policy impact their bottom lines? Many business owners who supported Trump in his first term remain hopeful that his policies will ease the struggles they currently face. However, as the political landscape shifts and the realities of governance set in, it’s clear that not every item they took to the ballot box this November will be resolved.
John Arensmeyer, the founder and CEO of Small Business Majority, shares a collective uncertainty of the small business community in an interview with CNN. “I think business owners don’t know how much of what they’ve heard from the president-elect on the campaign is real, how much is going to actually happen and how much he can do,” he said.
Tax Cuts and Deregulation: The Core of Trump’s Plan
Tax Cuts
Trump’s promises to small business owners have largely revolved around two key areas: tax cuts and deregulation. These central tenets of his fiscal platform have been persuasive for many small business owners who benefited from the 2017 Tax Cuts and Jobs Act. These constituents are largely hoping for a similar approach during his second term.
Trump has made it clear that tax cuts for businesses—especially for small and mid-sized companies—remain the priority of his economic policy. Trump has repeatedly promised to cut taxes for small businesses and individuals to stimulate economic growth. How he intends to cut taxes to impact small business is less clear.
What we do know is that his tax policy plans include reducing the corporate tax rate, lowering capital gains taxes, and making business tax cuts permanent, all of which, he argues, will help entrepreneurs reinvest in their companies and create jobs.
Tax Policy
However, Trump’s extensive tax wish list is expensive and comes at a time when the nation’s debt is rising swiftly. Extending the 2017 Tax Cuts and Jobs Act could cost more than $4 trillion, and, in addition, Trump has promised more than $3.3 trillion in tax relief measures.
Trump claims his plan to raise tariffs will replace the revenue lost to his proposed tax breaks, but experts say that’s just not possible. Raj Tulshan, CEO of Loan Mantra, says this is a semantics game as much as a fiscal one. “We can call it tariffs, or non-taxable overtime, but the truth of the matter is that we will not get to the point that we devalue the dollar on a global level.” The nonpartisan Committee for a Responsible Federal Budget shares Tulshan’s concern. They also note that Trump’s current fiscal platform accounts for an $8 trillion hole in the federal budget over the next decade.
Regulatory Environment
Beyond taxes, Trump’s deregulatory agenda is also a key pillar of his economic plan. Throughout his first term, he aggressively rolled back regulations across various sectors, from environmental policies to labor laws. Many small business owners, including the majority who supported Trump at the polls this fall, support these moves. They believe that fewer regulations lead to lower costs and greater freedom to operate. For instance, Coldwater Capital invests in real estate projects in several states throughout the U.S. While investor’s appetite for their projects, notably car washes, cooled in the past eighteen months, that “sentiment changed after Trump was elected.” Two new sites went under contract days after the election.
On the election trail Trump said,“Regulation is the hidden tax that stifles business growth.” His former administration’s efforts to roll back environmental, labor, and healthcare regulations were touted as a primary way to lessen operating costs for small businesses. Owners are hopeful that his second term will bring further regulatory relief. However, some small businesses worry that more lenient regulations will come with severe consequences, particularly for worker protections and environmental standards.
Labor Market and Wage Expectations: A Tough Balance
While Trump’s tax cuts and deregulation efforts have garnered praise from many small business owners, some of his positions and economic policy—particularly on wages—remain controversial. The issue of wage increases and employee protections continues to divide opinion.
Trump has been vocal in his opposition to raising the federal minimum wage, arguing that it would hurt small businesses, especially those in industries like hospitality and retail. In a recent interview, Trump stated that increasing the minimum wage would “lead to layoffs and fewer jobs,” particularly in smaller businesses where labor costs make up a significant portion of expenses.
For many small business owners, this stance is appealing as it allows them to control labor costs without facing mandates from the federal government. However, critics argue that this approach leaves low-wage workers behind, especially as inflation drives up living costs. Some economists argue that it’s a temporary fix that stifles earning potential for all salaried workers.
Moreover, while business owners often see Trump’s policies on taxes and regulation as beneficial, his opposition to wage mandates means that workers may see little relief in terms of pay increases. For workers, and for business owners trying to attract talent in a competitive labor market, this is a growing point of contention.
Healthcare: The Ongoing Challenge
Healthcare costs are a significant concern for many small business owners, particularly for those providing insurance to their employees. Trump’s stance on healthcare reform—especially his push to dismantle the Affordable Care Act (ACA)—remains central to his economic policy.
During his first term, Trump made several attempts to repeal the ACA, claiming that it placed an undue burden on small businesses. Trump’s second-term healthcare plans are expected to continue in the same vein, with his focus on replacing the ACA with something that he argues will be more cost-effective for businesses. On the campaign trail, Trump emphasized offering more affordable options for small businesses to provide health insurance to their employees. Still Trump has not provided specifics about what this system will be, saying only that he has "concepts of a plan" at the September debate.
Trump’s administration may encounter challenges to their healthcare policies, especially if they face ongoing legal battles over the ACA. With enhanced federal ACA subsidies set to expire at the end of next year; critics warn that dismantling the ACA could actually lead to increased premiums for small businesses, particularly for those who rely on the healthcare exchanges for affordable coverage.
Economic Uncertainty and Global Challenges
Beyond taxes and regulation, Trump’s policies on broader economic issues, such as inflation, supply chain disruptions, and global trade, will play a significant role in shaping the experience of small business owners in his second term.
In CNN’s report on the uncertainty facing small business owners, experts note that at the heart of the unknown is global conditions. Despite Trump’s proposed tax cuts and deregulation, business owners must still grapple with rising inflation, supply chain issues, and labor shortages. Even with tax relief and a pro-business regulatory environment, many small business owners face challenges beyond government control: fluctuating material costs and an unpredictable workforce. Trump’s tariff proposals are perhaps the most hotly contested by and about how they will impact small business. Some small business have moved their operations from overseas, while others worry that their product will become more expensive and, therefore, unattainable to an average consumer.
Despite the hypothetical applications of Trump’s platform, there are broader economic issues that are not solved by policy alone. For some small business owners, supply chain disruptions and inflation is a daily struggle. The majority of small business owners are concerned that while Trump’s economic policy may provide short-term relief, it will not address underlying structural issues that make it hard for small businesses to thrive in an increasingly complex global economy.
“The challenges are far deeper than just taxes or regulations,” said one small business owner working in manufacturing. “We need stable supply chains, affordable healthcare, and a labor force that’s ready to work. It’s not just about cutting costs—it’s about creating an environment where small businesses can succeed over the long term.”
Conclusion: A Mixed Bag for Small Business Owners
In a nutshell, small business owners are cautiously optimistic about what a second Trump term might bring. Political analysts indicate that the small business sector had a large hand in electing Trump for a second term and now the question is: can he deliver on his promises? On the one hand, Trump’s promises of tax cuts and deregulation offer some benefits for businesses looking to expand and invest in growth. On the other hand, the broader economic challenges facing small businesses, including inflation, healthcare costs, and global disruptions, will not be easily solved by the same conditions or economic policy from the first Trump administration. Business owners would be wise to adjust their expectations accordingly.
For many small business owners, the upcoming presidential change represents an opportunity to reflect on both the successes and struggles of the past four years while preparing for a new set of challenges. Whether or not Trump can deliver on his platform remains illusive, but his focus on tax cuts, deregulation, and a business-friendly environment will shape the stakes of a second term. As one CEO has said, “the next Trump administration is shaping up to be made up entirely of billionaires... but can billionaires run the country?”
At Loan Mantra, we understand the complexities of running a small business in today’s economy. Whether you’re navigating new regulations, looking for ways to cut costs, or in need of financing solutions, we’re here to help you thrive in any environment. Stay informed, stay prepared, and let’s work together to ensure your business succeeds, no matter the political landscape. Our mantra? Democratized lending for all.