Business News: Is SBA Plan Small-Minded? Who Wins U.S.-Canada Trade Dispute? Is AI Pricing Out Some?

Hey everybody, it's Gene Marks, and welcome to this week's episode of the Paychex Thrive Week in Review. This is where we take a few items of news that impacts your small business and mine, and we talk about them for a little bit.

Now, before we begin, I think it's a great point to talk about something that's on every business owner's mind right now: compliance. While everyone is enjoying the last rays of summer, there's still mid-year and year-end requirements to meet and prepare for, so your business avoids being at risk. Paychex provides a checklist that includes state minimum wage changes, tip credit rules, workplace posting updates, state requirement mandate up reminders, and a mid-year HR review to close any compliance gaps.

So, check out go.paychex.com/midyear to download that checklist.

All right, everybody, let's get to the news. The first comes from the Small Business Administration. They're proposing a redefinition of what exactly is a small business. The SBA is proposing a major overhaul of its business size standards that could add about 115,000 companies to the ranks of the firms eligible for SBA programs.

The plan will consolidate nearly a thousand industry-specific standards into 338 and substantially raise revenue and employee limits in some industries. This would allow larger middle market companies to remain eligible longer for SBA 7(a), 504, and other government-backed loans, potentially expanding financing options for fast-growing businesses.

But, the National Small Business Association warns the same changes could hurt generally smaller firms competing for federal contracts in computer programming, for example, they give. The revenue ceiling could jump from $34 million to $531 million, forcing relatively small contractors to compete against companies hundreds of millions of dollars larger. NSBA says newly eligible companies already hold more than $71 billion in federal contracts.

So, what does that mean for you? I look at it this way. I think it’s good that we're including more businesses as small businesses, but really, you know, the SBA is there to support small businesses. And right now, the general definition of a small business, generally under the SBA, is anybody with less than, say, 500 employees. I think both you and I know that 500 employees is a pretty big business nowadays.

Now they're expanding it to include even larger companies. So, you know, there's a limited pool of money that's approved by Congress that the SBA can guarantee in the form of loans. And there's a limited amount of resources that the SBA does have to provide counseling and services and federal program assistance and all the other things that the SBA does. Well, allowing more companies to take advantage of this limited pool of money and resources, I think is going to box out some potentially smaller firms.

Now, the question comes down to, even if these larger companies are applying for these kinds of loan guarantees or services, are they more eligible than a firm a tenth of their size. It's gonna come down to how these firms are evaluated when they are applying for these benefits from the SBA. And that to me is not 100% clear right now.

So, bottom line is this: more companies are gonna be allowed to take advantage of small business administration benefits, including loans and services. That's going to increase the pool of competitors for the companies that are already considered to be small businesses. The question that I still have opening is how is all of this going to be evaluated.

More to come on this, but it's definitely a rule change that may impact you if you take advantage of government programs or SBA loans.

Alright, our next tariff, uh, topic, and I can't avoid this, is of course tariffs. Canada has now slapped a retaliatory tariffs on U.S. goods. It's imposing retaliatory tariffs on roughly $20 billion of U.S. goods after President Trump implemented new 50% tariffs on the equivalent amount of Canadian imports. Beginning Sept. 8, Canada will apply tariffs of 15%, 25%, or 50% on about 700 U.S. products, including steel, aluminum, furniture, clothing, appliances, seafood, electronics, tools, machinery, and prepared foods.

Canadian officials said the measures were designed both to protect domestic businesses and to place political pressure on U.S. states ahead of November's midterm elections. Ottawa also announced a $7.5 billion – Canadian dollar – support package for Canadian businesses and workers affected by the trade dispute. The Business Development Bank of Canada will offer qualifying companies interest-free loans ranging from $2.5 million to $5 million Canadian dollars, with repayments deferred for 36 months.

The escalating tit-for-tat measures mark a sharp deterioration in U.S.-Canada trade relations. Okay, so first of all, I could tell you that this is a major headache for both Canadian and American businesses. We know this. You know, why is this happening? Why, you know, why all the tariffs? Well, you know, President Trump does look at the map of countries that are charging tariffs for American goods. He believes, and to some extent there is credibility to what he's saying, that Canadian tariffs are already higher on some American goods than what the Americans are charging Canada, which in his opinion creates an unfair trade situation. You can argue that or not.

And also let's keep in mind that the entire economy of Canada is the size of about Texas. So, you know, when the U.S. imposes tariffs on countries, and every country is smaller than the U.S. when you look at the size of their economies, it's gonna hurt that country.

Now, you know, you know, President Trump is looking to get advantages to American businesses for tariffs. He wants to drive more work being done here, alternative suppliers, maybe American companies can supply the same types of goods that Canadian companies are doing. There's a whole bunch of different reasons. So, I, you know, I am not going to say on this video whether or not I support or don't support these kinds of tariffs, but they are what they are.

So, this goes back to some of the advice that I've given in the past when it comes to managing your way around tariffs. Keep in mind, use bonded warehouses if you're bringing goods in from Canada, where you can not get tariffed on any goods until you actually ship them to customers. You might be able to wait this thing out because given the history, we have seen that these tariff things kind of go away or they get negotiated down or the courts overturn them.

And speaking of courts, if you are going to be paying tariffs for these Canadian goods that the Trump administration is imposing, my advice to you is to keep careful records and have a good relationship with your custom broker. These things are going to be challenged in court. We know that, and if they are turned over and refunds are due, just like the last round of refunds, you want to be ready to go to apply for those refunds.

I'll have more advice on navigating tariffs from Canadian goods, probably in areas that I write, and I might bring this topic back up here in a Week in Review. But, bear in mind that's on Sept. 8. So, it's, you know, the following week – next week – when these things go into effect, unless something gets resolved between now and then.

Okay, finally, in this week's AI News, Google is targeting AI sticker shock. It's rolling out new pricing and cost control tools designed to make Gemini Enterprise more affordable and predictable for business experimenting with artificial intelligence. The company is adding pay-as-you-go pricing alongside traditional per seat subscriptions, allowing organizations to expand their AI usage without committing to fixed costs for every employee.

Companies can establish monthly spending caps that halt additional AI usage once these budgets are reached. Google is also offering flexible savings plans that discount token costs by 10% for one-year commitments and 20% for three-year commitments. Another forthcoming option will let businesses defer non-urgent AI workloads to off-peak periods, potentially reducing inference costs of as much as 50%.

The changes are reflecting a growing industry challenge. We are seeing it a lot. A lot of big companies are pushing back on the cost of AI. These AI agents can consume large numbers of tokens, making costs difficult to predict. Google is positioning there through financial controls and flexible pricing as a competitive battle emerges between OpenAI and Anthropic and Google itself.

Now, my firm implements AI solutions, so let me give you an idea of what this kind of thing costs, just so you know. I mean, even though you're a small business and you might say, I don't have the kinds of millions of prompts and transactions going back and forth that would really cost a lot of money. Bear in mind, even if you're the smallest of business, say, I don't know, you've got 50 to 100 employees and you're connecting Claude or Chat GPT to your different databases using their connectors. Just so you know, just the subscription cost can run you about $500 to $2,500 a month.

And then you're gonna be consuming data, which could be another hundred to two thousand dollars a month, just depending on your usage, to get something like this set up by a consultant like ourselves, actually, can cost anywhere from $5,000 to $30,000. You're gonna be paying ongoing maintenance because things break, don't they, and need support of $5,000 to $30,000 a month.

So, on the high end, I'm like adding this up; It's $2,500 for your seats potentially on the higher end, $2,000 for your consuming data. That's $4,500. You might be paying up to $30,000 to implement it. So that's about $35,000 and another $3,000 a month or $36,000 a year. I mean, your AI solution could be costing you $60,000 or $70,000 a year, depending on what you develop and what you're implementing.

So, I'm not saying you don't spend the money because I think that there is reason to do it. Just make sure you've done your ROI calculations in detail with your accountant to make sure that that $70,000 that you're spending in your first year makes sense and you are getting return on investment for the money that you're spending.

My name is Gene Marks, and you have been watching or listening to the Paychex Thrive Week in Review. Please remember to subscribe to our podcast on YouTube and your favorite podcast platform. In addition, if you would like help or tips or advice in running your business, sign up for a Paychex Thrive newsletter. Go to paychex.com/thrive.

And finally, go to go.paychex.com/midyear so you've got all of your checklists and tick boxes and compliance things you need to know as we're heading into the fall for 2026 when it comes to your employees and HR in general.

Thanks so much for watching and listening. My name is Gene Marks. We will see you again next time on the Paychex Drive Week in Review. Take care.

My name is Gene Marks, and you've been watching or listening to the Paychex Thrive Week in Review podcast. A few things to take away. First of all, if you are in need of HR or payroll help in your business, consider Paychex. Go to paychex.com/meetpaychex. That's P-A-Y-C-H-E-X.com forward slash M-E-E-T-P-A-Y-C-H-E-X. Please follow this podcast on your podcast platform or on YouTube if you are enjoying the content so you stay up to date on our latest episodes.

And if you need help or advice or tips in running your business, get our Paychex Thrive newsletter. Go to paychex.com/thrive and sign up for it there.

Hope you found this information helpful. I'll be back with you next week with more news that impacts your small business and mine. My name is Gene Marks. Thanks so much for watching or listening. Take care.

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