Policy Agenda: Access to Capital
Despite their numbers and economic importance, small business owners—particularly women, minorities and other underserved populations—face significant hurdles accessing capital. New alternative/online lending opportunities have recently sprung up to fill this market need, which is a potentially positive development for small businesses. However, alternative sources of financing operate in an almost entirely unregulated market—making many small business owners vulnerable to predatory practices. To fully realize the economic potential of small businesses, we must ensure greater access and more options for entrepreneurs to obtain responsible capital by:
- Maintaining and expanding Small Business Administration (SBA) lending, counseling and procurement programs.
- Maintaining and expanding the Community Development Financial Institutions (CDFI) Fund.
- Promoting responsible lending practices by lenders and brokers as set forth in the Small Business Borrowers’ Bill of Rights.
- Identifying state and federal agencies, including the Consumer Financial Protection Bureau (CFPB), that can promulgate non-bank small business lending regulations under existing law, as well as looking for more expanded legislative solutions.
- Ensuring fair and clear regulations on crowdfunding and other non-bank, non-VC sources of capital while providing safeguards for business owners and investors.
- Improving data sharing between the IRS and online lenders.
- Supporting reauthorization of the State Small Business Credit Initiative, which funds new and existing state programs that support lending to and investment in small businesses.
- Making permanent the fee waiver on SBA-backed loans under $150,000.
- Providing small businesses, particularly minority businesses, with increased opportunities to participate in SBA loan programs and small business development center programs.
- Ensuring that women entrepreneurs get fair access to capital.
- Increasing the artificial lending cap for credit unions from 12.25% to 27.5% of assets.
- Enacting policies to strengthen and expand community banks, which currently provide more than half of small business lending.
- Supporting the CFPB's collection of small business lending data.
- Promoting responsible small business and consumer lending protections at the state level.