- Three senators propose Unlocking Opportunities in Emerging Markets Act to improve capital access to underserved communities
- Bill looks to create an office within the U.S. Small Business Administration to develop strategies and programs related to emerging markets
- Sponsors say the COVID-19 pandemic has highlighted pre-existing challenges that woman, minorities, and veterans face in starting a business
Three senators have introduced a bill calling for new strategies, programs, and policies to ensure that underserved entrepreneurs gain equitable access to loans and other services offered through the U.S. Small Business Administration.
The Unlocking Opportunities in Emerging Markets Act was introduced Wednesday in the Senate Committee on Small Business & Entrepreneurship by Senators Ben Cardin, Tammy Duckworth, and Mazie K. Hirono. Cardin previously introduced legislation with the same name and intent in 2019.
The bill would establish an Office of Emerging Markets within the SBA’s Office of Capital Access to “ensure that SBA’s access to capital initiatives address the specific needs of entrepreneurs in underserved communities in a coordinated way.” Cardin said Congress must “examine, fine-tune, and, if necessary, shake up programs” at the SBA to ensure that the initiatives can be tailored to meet the needs of women, veterans, minorities, and underserved or underbanked communities.
In a statement, the senators say minority entrepreneurs have historically faced greater challenges in access to capital, technical training, and mentors. They cite an analysis from the National Bureau of Economic Research that looked at a period between February and April of 2019 and found that Black-, Latino-, and Asian-owned businesses closed at a higher rate than White-owned businesses. The senators also say that minorities have faced more difficulty securing a business loan, or are more likely to be charged a higher rate, and that only 29 percent of small businesses in the United States are owned by minorities despite these groups making up 39 percent of the population.
The senators say the COVID-19 pandemic has further highlighted these disparities. Minority-owned businesses have been disproportionately affected by the pandemic, and an Associated Press analysis found that these businesses also faced lengthy delays when applying for Paycheck Protection Program loans.
The bill would create strategies and programs to implement an integrated approach to small business development concerns in emerging markets. It would also establish partnerships to assist with the promotion of economic success of small businesses in emerging markets, develop and recommend policies on the SBA’s microloan program and other capital access opportunities to better serve emerging markets, and review these initiatives to evaluate their effectiveness.
The legislation has won the endorsement of several business groups, including the Friends of the Microloan Program, U.S. Black Chamber, Association of Women’s Business Centers, Association for Enterprise Opportunity, Opportunity Finance Network, Mission Lenders Working Group, and the National Association for Latino Community Asset Builders.