Cardin, Cantwell, Schumer, Booker, Cortez Masto & Harris Introduce Legislation to Invest in Minority-Owned Businesses
WASHINGTON —U.S. Senate Committee on Small Business & Entrepreneurship Ranking Member Ben Cardin (D-Md.), U.S. Senate Committee on Commerce, Science, and Transportation Ranking Member Maria Cantwell (D-Wash.), Senate Democratic Leader Chuck Schumer (N.Y.), and U.S. Senators Cory Booker (D-N.J.), Catherine Cortez Masto (D-Nev.), and Kamala D. Harris (D-Calif.) today introduced the Minority Business Resiliency Act. The bill would make the Minority Business Development Agency (MBDA), which was created by Executive Order in 1969, permanent and expand the reach of the agency by creating regional MBDA offices, strengthening its grant making capacity, and increasing its coordination with other federal agencies.
“MBDA is the only federal agency specifically created to help minority entrepreneurs start and grow successful businesses—making it one of our best tools to address the disproportionate impact of COVID-19 on minority-owned businesses,” Cardin said. “It is long past time for Congress to make MBDA permanent and give the agency all the resources necessary to support minority entrepreneurs who face pervasive and historic barriers to business ownership.”
“The Minority Business Development Agency helps entrepreneurs launch and grow their businesses,” Cantwell said. “This legislation would make this agency permanent and ensure that we are doing everything we can to support minority-owned companies during these times of unprecedented challenges due to the COVID-19 pandemic.”
“We’ve seen over and over again that communities of color, including minority-owned businesses, have been disproportionately affected by the COVID-19 crisis, which is why we must do more to ensure these business owners and entrepreneurs get the targeted resources they need to recover and thrive,” said Leader Schumer. “The MBDA is one of the best tools we have to address the barriers these businesses have faced for generations, and there’s never been a clearer case or more appropriate time for making the agency permanent and expanding its programs to further support the success of minority-owned businesses.”
“Minority-owned businesses are key drivers of growth in towns and communities across the country, but often face steep challenges when it comes to things like access to capital, mentorship, and training,” Booker said. “These existing disparities have only been compounded by the disproportionate impact of COVID-19 on minority communities and the ensuing economic downturn. Our bill addresses these challenges head-on by strengthening and expanding the Minority Business Development Agency so it can provide greater relief to minority-businesses as they weather this economic storm.”
“In Nevada, our minority-owned businesses serve the needs of our incredibly diverse communities, but the economic crisis caused by the coronavirus pandemic has had a disproportionate impact on minority entrepreneurs,” said Senator Cortez Masto. “In this time of crisis, it’s more important than ever that we do everything we can to support minority-owned businesses, and that includes putting in place these permanent programs to foster entrepreneurship and build wealth in Nevada’s communities of color.”
“The COVID-19 pandemic has shed light to the disparities already facing minority-owned small businesses,” said Harris. “With over 40% of Black small businesses closed due to COVID-19, its imperative Congress ensure that we are doing everything we can to support and lift up these businesses, particularly during a health and economic pandemic. I’m proud to join my colleagues in introducing the Minority Business Resiliency Act— enhancing and making MBDA permanent will provide the resources and funding needed for minority-owned businesses to succeed in California and across the nation.”
The COVID-19 pandemic has highlighted the pre-existing disparities that minority entrepreneurs face in access to capital, mentorship and technical training. According to a National Bureau of Economic Research analysis of the impact of COVID-19 on small businesses, from February to April of this year, an estimated 41 percent of Black-owned businesses, 32 percent of Latino-owned businesses, and 26 percent of Asian-owned businesses closed while 17 percent of white-owned businesses closed.
Prior to the pandemic, minority business enterprises (MBEs) were key drivers of growth in new business formation in America in spite of the many barriers they face. For example, MBEs are 2 to 3 times more likely to be denied loans than non-MBEs; on average, the annual gross receipts reported by MBEs is only one-third of the annual gross receipts reported by non-MBEs; and MBEs are half as likely as non-MBEs to have employees.
The Minority Business Resiliency Act would:
- address the disparate impact COVID-19 has had on minority businesses by increasing MBDA’s fiscal year 2020 budget to support MBEs through this crisis;
- provide certainty by placing the MBDA in statute and formally establishing processes for its largest program, the Minority Business Development Center (MBDC) Program;
- make the MBDA more effective by putting into law the mission and goals of the agency and giving it the proper tools to carry them out successfully;
- build a diverse pipeline of entrepreneurial talent by creating a new program to spur entrepreneurship at historically Black colleges and universities (HBCUs) and minority serving institutions (MSIs), and ensuring regional coverage of the MBDC Program; and
- expand the geographic reach of the MBDA by authorizing the creation of regional and district MBDA offices.
Similar legislation was introduced in the House last year by Congressmen Jerry McNerney (D-Calif.) and Don Young (R-Alaska). The measure is endorsed by the Page 30 Coalition, which includes the U.S. Black Chambers, U.S. Hispanic Chamber of Commerce (USHCC), the National Asian American Chamber of Commerce, and the Association for Enterprise Opportunity; and the National Urban League, the U.S. Chamber of Commerce, the National Minority Supplier Diversity Council, and the Black Economic Alliance.
“We're witnessing firsthand the pandemic-induced collapsing of more than 40% of Black-owned businesses due to lack of relief funding. We commend Senator Cardin for introducing the Minority Business Resiliency Act of 2020, which would expand the reach of MBDA. MBDA plays an integral role in cultivating and supporting the nation's minority business owners. As the voice of the nation's Black business owners we urge Congress to pass the Minority Business Resiliency Act of 2020,” said Ron Busby, President, U.S. Black Chambers.
“USHCC proudly supports the Minority Business Resiliency Act, which would help many minority entrepreneurs realize their dreams of business ownership. Now is the time to invest in America’s minority entrepreneurs by making MBDA a stronger agency. In addition to placing MBDA in statute, the Minority Business Resiliency Act would authorize the creation of new regional offices and formation of new public private partnerships with Hispanic-Serving Institutions, Historically-Black Colleges and Universities, and Minority-Serving Institutions to help the agency reach more minority entrepreneurs in even more communities,” said Ramiro A. Cavazos, President & CEO, USHCC.
“The U.S. Chamber of Commerce supports the Minority Business Development Act of 2020, important legislation which would help many minority entrepreneurs realize their dreams of business ownership,” said Rick Wade, Vice President of Strategic Alliance and Outreach, U.S. Chamber of Commerce. “Now is the time to strengthen the MBDA, invest in America’s minority-owned firms and help the American economy!”
“We urge lawmakers to pass the Minority Business Resiliency Act of 2020 as it will strengthen and establish the MBDA into federal statute,” said Jamon Phenix, Coalitions Manager, Page 30 Coalition. “This critical proposal would increase MBDA’s Fiscal Year 2020 budget to further safeguard MBEs from the devastating inequities brought on by the health crisis, promote a diverse entrepreneurial pipeline with the creation of new programs at historically Black colleges and universities and minority-serving institutions, and establish a process for the Minority Business Development Center Program to expand its regional coverage.”
“At a time when Black businesses are closing their doors at a higher rate than all others while simultaneously struggling to gain access to public and private capital, Congress needs to pass the Minority Business Resiliency Act and finally make the Minority Business Development Agency a permanent fixture in government. For far too long, we’ve endured the consequences of systemic exclusion facing small businesses owners and entrepreneurs of color,” said David Clunie, Executive Director, the Black Economic Alliance. “We need to upend oppressive practices that have prevented Black Americans from true economic inclusion, and every person and institution has an active role to play. This legislation would provide the funding necessary to deploy vital resources to Black businesses—including grants and technical assistance—that aren’t getting support elsewhere.”
Maryland boasts the highest concentration of minority-owned businesses in the country and as committee Ranking Member, Cardin has made increasing federal support for MBEs a top priority.
In May, Cardin and Booker released a proposal to make improvements to federal small business relief programs in order to make it easier for minorities and other underserved small business owners to access the capital they need to survive COVID-19. The senators’ proposal also addresses historical, systemic disparities in access to startup and operating capital, as well as technical training and mentorship, so underserved small businesses have the resources they need to adapt their businesses to the changes caused by COVID-19.
In October 2019, Cardin introduced the Ushering Progress by Leveraging Innovation and Future Technology (UPLIFT) Act of 2019, which would foster innovation and entrepreneurial ecosystems in underserved communities by providing Historically Black Colleges and Universities (HBCUs), minority serving institutions (MSIs), and community colleges with the resources to establish and expand incubators and accelerators for underserved entrepreneurs.
In July 2019, Cardin introduced three bills to increase Small Business Administration (SBA) lending to minority-owned and other underserved entrepreneurs:
- the Closing the Credit Gap Act would make permanent SBA’s 7(a) Community Advantage Pilot Program, which has a record of getting capital to minority entrepreneurs at higher rates than the traditional 7(a) program;
- the Unlocking Opportunities in Emerging Markets Act would establish an Office of Emerging Markets (OEM) within SBA’s Office of Capital Access to ensure that SBA’s access to capital initiatives address the specific needs of entrepreneurs in underserved domestic emerging markets in a coordinated way; and
- the Small-Dollar and Veterans Loans Enhancement Act would eliminate or reduce fees on SBA 7(a) small-dollar loans of $150,000 or less, which make up the majority of the loans that go to women-, minority- and veteran-owned and rural small businesses.
Next Article Previous Article