In the heartland and the Rust Belt, small businesses are experiencing a season of change—some call it a renaissance, others a reckoning. From Detroit’s city hall to the halls of Iowa State University, government leaders are promising to cut red tape and spark entrepreneurship. But as reforms roll out, the impact on business owners is anything but uniform.
Detroit, long infamous for its labyrinthine licensing requirements and sky-high taxes, is now making headlines for a very different reason. On August 15, 2025, city officials announced sweeping changes aimed at making it easier to launch and operate a business. Under Mayor Mike Duggan’s leadership, and with strong support from the city council, Detroit has overhauled its licensing and regulatory processes. Business licenses are now issued every two years instead of annually, and new businesses can hit the ground running with provisional licenses, bypassing what used to be months of waiting. Several redundant and arbitrary licenses—about 30 in total, covering trades like plumbers and electricians—have been scrapped, thanks to a 2019 state law prohibiting municipalities from duplicating state-level licensing.
According to the Mackinac Center for Public Policy, these changes mark a dramatic turnaround for a city that once “had the highest income, property, and business taxes in Michigan and was the hardest city in America to open a restaurant due to excessive local licensing.” In his 2017 “State of the City” address, Mayor Duggan lamented that major projects like the construction of a basketball stadium were hampered by a shortage of licensed plumbers—120 were needed daily, but only 58 met the city’s unique licensing requirements at the time. The mayor saw this as a call to action, and the city has since made “steady progress on nearly every regulatory issue identified in that report,” as Jarrett Skorup of the Mackinac Center noted.
The trend toward deregulation isn’t confined to Detroit. In Ames, Iowa, the conversation is playing out on a national stage. On August 12, 2025, GOP Senator Joni Ernst hosted a small business event at Iowa State University, where Small Business Administrator Kelly Loeffler touted her agency’s role in supporting entrepreneurs. “Since January 20, 2025, SBA has approved 46,430 504 and 7(a) loans for over $24 billion—as well as 25,032 disaster loans for $3.8 billion. This equates to nearly 2,500 loans per week,” SBA spokesperson Maggie Clemmons told CNN.
Yet the optimism from the stage didn’t resonate with everyone in the audience. Laura Pager, president of Gale Construction Company, expressed deep skepticism. “I don’t know who the 2,000 small businesses are that were approved every week. I could tell you it’s not mine,” Pager told CNN. She recounted losing approximately $6 million in work this year—contracts lost after the Department of Government Efficiency (DOGE) slashed federal spending and agency staffing. Pager’s experience highlights a disconnect: while federal agencies boast about loan approvals and streamlined processes, some business owners say they’re struggling more than ever to navigate a shrinking and less accessible government.
“We don’t have the number of resources and the people to go to anymore,” Pager said, noting that a key SBA contact had retired without replacement. “Agencies we work with generally have a much more limited staff now. And I feel like they’re flustered.” Her story is echoed by others in the sector. Victor Santana, who owns a Chicago-based company that helps small businesses secure federal contracts, described the current environment as one of confusion and uncertainty. “They are lost,” Santana said of the business leaders he met at the event. “They can’t figure out which way is up, which way is down.”
The event in Iowa was part of a larger push by the Trump administration and its allies to reframe the relationship between government and business. Senator Ernst, who chairs the Committee on Small Business and Entrepreneurship, has made downsizing the federal government a centerpiece of her pitch to voters. “We know that federal government is not the answer when it comes to issues at the local level. Those that are most responsive are at the local level,” she said. Ernst also promoted bipartisan legislation to raise the maximum loan limits for small businesses, aiming to boost domestic manufacturing—a bill she hopes will see a Senate vote in September 2025.
Other Republican lawmakers, including Iowa Representatives Randy Feenstra, Zach Nunn, and Mariannette Miller-Meeks, have rallied around Trump’s sweeping tax and spending cuts, arguing that these moves free up resources for small business growth. Feenstra, for example, highlighted the new law’s tax breaks for manufacturing investment, quipping, “Maybe some of you don’t always think it’s beautiful. I do.” The administration’s pitch is that by “reshaping the federal government to be more responsive to the private sector,” as Loeffler put it, they are fostering an environment where entrepreneurship can thrive.
But the reality is nuanced. While some business owners welcome the rollback of regulations and the promise of tax relief, others worry about the consequences. Jordi Quevedo-Valls, who co-founded a startup marketplace, voiced concern over the Environmental Protection Agency’s rollback of environmental protections. “I mean that I completely disagree with. I mean, the science is there,” he told CNN. The elimination of clean energy tax credits in Trump’s legislative package has also sparked debate in Iowa, a state that leads the nation in wind energy production. Representative Nunn defended the shift, saying, “It’s most important that we’re not dependent on foreign energy anymore. And this bill delivers that.”
Meanwhile, deep cuts to Medicaid and new work requirements have become political flashpoints. Majority Leader Steve Scalise argued that “by putting in place responsible work requirements, now it’s going to help the truly needy be able to get better care in programs like Medicaid. And then the folks that are going to go get work, which is a good thing by the way, are going to be able to get work and get a job and get health care in the private sector, which is going to be even better than Medicaid.” Democrats, for their part, have seized on these changes in their messaging against the law, warning of reduced support for vulnerable populations.
Back in Detroit, the effects of local deregulation are already being felt. The city’s reforms, which include repealing arbitrary occupational and business licenses in 2022 and further easing regulatory processes this year, are designed to “create jobs, grow neighborhoods, and help build a more vibrant city.” While there’s still work to be done, the Motor City’s shift from regulatory caution to entrepreneurial encouragement is a marked change from years past.
Whether in Detroit or Des Moines, the story of small business in 2025 is one of transition—sometimes bumpy, often contested, but undeniably consequential for the future of local economies and the American workforce.
