Massachusetts needs hedge funds to help fuel our economy

·3 min read

These days – when inflation is sky-high, economic uncertainty is the norm and store shelves are more likely to be empty than full – it’s easy to feel pessimistic about the future of local small business. As director of the Marshfield Chamber of Commerce, I talk to local business owners daily about what we can do to provide the certainty, stability and resources to grow their business, hire more employees and keep Massachusetts moving forward. As a small-business owner myself, I see firsthand the challenges of inflation, labor shortages and record fuel prices.

Through my conversations and my work, I have seen how many people don’t realize the vital role that private investment funds – like hedge funds – can and do play in helping to support small businesses in our communities. These financial tools help provide critical capital to companies across the South Shore, enabling them to grow their operations and hire more workers. This is more important than ever as we enter a period of economic uncertainty and, potentially, a recession in the next year or two.

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All across the country, private funds contribute $716 billion in credit to businesses of all sizes. This money helps them expand more rapidly than they could with traditional financing. In turn, that means they can hire more people, buy more equipment and otherwise expand. When businesses grow, the coffee shops, restaurants and retail stores in their area also benefit because workers often shop and eat near their office.

In addition to providing access to capital, managed funds help spur innovation at our small and mid-size businesses – something essential regardless of industry or size. That means empowering companies to reach broader consumer markets through e-commerce, keep up with technological changes and develop new ways to deliver the products and services that individuals and families depend on.

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One of the most beneficial aspects of private funds is their ability to navigate all market conditions, delivering returns on investments even during tumultuous times like those we live in now. We saw this during the 2008 financial crisis when many private funds stepped up to help support businesses when many could no longer access capital through other means. This creates much-needed stability and certainty – not only for markets but for our small-business owners.

Unfortunately, many people – including policymakers in Washington – don’t understand what a lifeline private funds are for small and mid-size businesses. Instead, they are pushing regulatory and legislative proposals that would make it more difficult for small-business owners to access capital, innovate and hire.

Instead of pretending that hedge funds and other large financial institutions are harming local businesses, politician should be honest that they work in concert and both benefit from pro-growth, pro-business policies. A booming economy helps large, medium and small businesses.  Likewise, a bad economy will hurt the Fortune 500 and the corner store.

Lara Brait is the executive director of the Marshfield Chamber of Commerce.
Lara Brait is the executive director of the Marshfield Chamber of Commerce.

During these uncertain times, we must do everything we can to help the employers and job creators who keep our communities and economies strong – not introduce unnecessary and misguided roadblocks to growth. In my work with the Chamber of Commerce, I’ve seen the energy and spirit that make small businesses the heart and soul of our communities. They deserved elected officials who genuinely help them, not ones who push empty anti-business talking points.

Lara Brait is the executive eirector of the Marshfield Chamber of Commerce and is the owner of Brait Point, a real estate development firm in Marshfield.

This article originally appeared on The Patriot Ledger: Hedge funds provide critical capital to companies across South Shore