Why Business Owners Should be Careful of the Proposed Price Gouging Prevention Act of 2025

Business owners across America are feeling the squeeze. With inflation driving up costs and consumer expectations for fair pricing remaining high, many are caught between maintaining profitability and avoiding accusations of price gouging. A proposed federal bill could make this balancing act even more precarious for small businesses.

The Price Gouging Prevention Act of 2025, introduced by Senator Elizabeth Warren and other Democratic lawmakers, aims to crack down on excessive price increases by large corporations. While the legislation primarily targets companies with over $100 million in revenue, it signals a broader shift in how pricing practices will be scrutinized. For small business owners, this creates both challenges and opportunities that require careful financial planning.

Understanding this proposed legislation and exploring alternative financing options like small business loans can help entrepreneurs navigate these uncertain times without compromising their operations or customer relationships.

What the Price Gouging Bill Means for Business

The Price Gouging Prevention Act of 2025 would give the Federal Trade Commission and state attorneys general new powers to investigate and prosecute companies for excessive price increases. The bill specifically mentions “abrupt trade policies” and “exceptional market shock” as factors that will be considered when evaluating pricing decisions.

Companies with revenue exceeding $100 million would face the strictest scrutiny. They would need to publicly report any price changes that exceed their average pricing from the previous 120 days in SEC filings, along with detailed information about product costs and margins. The legislation would also allocate $1 billion in additional funding to the FTC for enforcement.

However, businesses with less than $100 million in revenue receive some protection under the proposed law. They would be shielded from price gouging litigation if they can demonstrate legitimate cost increases. This protection acknowledges that smaller businesses often have less control over their supply chains and operating costs.

The Inflation Challenge for Small Businesses

Small business financing becomes crucial when inflation affects every aspect of operations. From raw materials to labor costs, entrepreneurs are seeing expenses rise across the board. Many companies cited in recent earnings calls, including major retailers like Costco and Best Buy, have pointed to tariffs as a driving force behind price increases.

Federal Reserve Chair Jay Powell noted that tariff costs ultimately get passed through the supply chain, with someone in that chain bearing the expense. For small businesses, absorbing these costs without raising prices can quickly erode profit margins and threaten long-term viability.

The challenge becomes even more complex when considering customer perception. Consumers are increasingly sensitive to price increases, with 73% expecting companies to understand their unique needs according to recent Salesforce research. Small business owners must carefully balance their need to maintain profitability with their customers’ expectations for fair pricing.

Why Small Business Loans Are Critical During Uncertain Times

Rather than immediately raising prices to offset inflation, small business financing offers entrepreneurs alternative strategies for managing increased costs. Access to capital can help business owners:

Maintain Competitive Pricing: With adequate working capital, businesses can absorb short-term cost increases while developing long-term pricing strategies that won’t alienate customers.

Invest in Efficiency: Small business loans can fund equipment upgrades, technology improvements, or process optimizations that reduce operating costs over time.

Build Inventory Strategically: Access to financing allows businesses to purchase inventory in bulk at current prices, protecting against future cost increases.

Weather Economic Storms: Having a financial cushion helps businesses maintain operations during periods when raising prices isn’t feasible or advisable.

The ARF Financial Solution: Bankroll Revolving Line of Credit

For small business owners seeking flexible financing solutions, ARF Financial’s Bankroll Revolving Line of Credit offers unique advantages during inflationary periods. This small business financing option provides up to $1.5 million in funding with terms extending up to 36 months.

What sets Bankroll apart is its flexibility. Business owners can draw funds as needed during a revolving period of up to one year, with minimum draws of $5,000. This means entrepreneurs can access capital precisely when they need it, whether for covering unexpected cost increases, investing in efficiency improvements, or maintaining inventory levels.

The revolving structure also means that as business owners make payments, those funds become available again. This creates a financial safety net that can help businesses navigate inflation without resorting to dramatic price increases that might trigger scrutiny under future price gouging legislation.

Strategic Approaches to Pricing During Inflation

Small business owners should consider several strategies when managing pricing during inflationary periods:

Gradual Adjustments: Rather than implementing large, sudden price increases, consider smaller, more frequent adjustments that reflect actual cost changes.

Value Communication: Clearly communicate the value proposition to customers, helping them understand what they’re receiving for their investment.

Cost Analysis: Regularly review all business expenses to identify areas where efficiency improvements could offset inflationary pressures.

Flexible Financing: Maintain access to small business loans or lines of credit to provide breathing room when deciding whether to raise prices.

The Benefits of Proactive Financial Planning

Businesses that establish small business financing relationships before they’re desperately needed are in a much stronger position to weather economic uncertainty. ARF Financial’s Bankroll product, for example, can be approved for amounts up to $1.5 million, but business owners only need to take an initial draw of $5,000. This means they can have significant financing capacity available without the immediate burden of large payments.

This proactive approach allows businesses to respond to market conditions strategically rather than reactively. When inflation drives up costs, having pre-approved financing means business owners can choose to absorb costs temporarily while implementing longer-term solutions, rather than feeling forced to raise prices immediately.

Preparing for Future Regulatory Scrutiny

While the current price gouging bill primarily targets larger corporations, small business owners should still prepare for increased scrutiny of pricing practices. This preparation includes:

Documentation: Maintain detailed records of cost increases and the business rationale behind any price adjustments.

Alternative Solutions: Explore small business financing options that can help absorb cost increases without immediately passing them to customers.

Customer Communication: Develop clear messaging about value proposition and any necessary pricing changes.

Efficiency Investments: Use small business loans to invest in operational improvements that can offset inflationary pressures.

Building Financial Resilience

The combination of inflation and potential price gouging legislation creates a complex environment for small business owners. However, those who plan strategically and maintain access to flexible financing options are better positioned to thrive.

ARF Financial’s Bankroll Revolving Line of Credit exemplifies the type of small business financing that can help entrepreneurs navigate these challenges. With its combination of high approval amounts, flexible terms, and revolving structure, it provides the financial flexibility needed to make strategic decisions rather than reactive ones.

Taking Action in Uncertain Times

The proposed price gouging legislation reflects a broader trend toward increased scrutiny of pricing practices across all industries. While small businesses with revenue under $100 million receive some protection, the smart strategy is to prepare for a future where all pricing decisions face greater examination.

Small business financing provides the foundation for this preparation. By establishing access to capital before it’s urgently needed, business owners create options for themselves. They can choose to invest in efficiency, build inventory strategically, or simply maintain competitive pricing while developing longer-term cost management strategies.

The current economic environment requires careful balance between maintaining profitability and avoiding the appearance of price gouging. Small business loans and revolving credit facilities provide the financial flexibility needed to achieve this balance successfully.

Don’t wait until inflation forces difficult pricing decisions. Explore your small business financing options today and build the financial resilience needed to navigate whatever economic challenges lie ahead.