Small Businesses Mourn the Demise of MBDA

“It has become clear that the Minority Business Development Agency (MBDA), the only federal agency dedicated to supporting minority entrepreneurship, effectively no longer exists. We mourn this loss. Where the agency once had upward of 100 employees, MBDA now has no more than one politically appointed staffer remaining. As for the state-level business development centers supported by MBDA funds, their federally funded work has stopped and their federal contracts have been or will soon be terminated. The sudden and ruthless halting of MBDA operations happened because the Trump administration is using DEI as an excuse to eliminate any and all government programs that help level the playing field.   

The consequences of the president’s action will be disastrous and will reverberate for years to come. MBDA was created in 1969 by President Richard Nixon. It was made permanent and expanded by a bipartisan infrastructure bill in 2021. At that time, President Joe Biden celebrated the expansion of MBDA because he believed it would help level the playing field for under-resourced entrepreneurs. MBDA received almost $70 million in funding for fiscal 2025 and has a track record of offering a fantastic ROI: In the previous fiscal year, MBDA helped businesses access loans totaling more than $1.5 billion, which helped create or maintain 23,000 jobs. MBDA also leveraged funds from the State Small Business Credit Initiative to create the Capital Readiness Program (CRP), which began in 2024 and was the largest federal program of its kind. In its first year, CRP assisted more than 6,000 entrepreneurs and helped raise $263 million to support small business growth. Given that impact, it’s no surprise that Small Business Majority’s research found that among minority-owned small businesses that received publicly funded support, roughly 1 in 4 had help from MBDA.

It is clear that the demise of MBDA did not result from a failure to achieve its mission. We also have serious concerns about the legality of the president unilaterally dismantling an agency backed by funding appropriated through Congress. As a result, we are exploring what options small businesses may have, if any, to require that the Trump administration re-start MBDA operations. President Trump is playing a dangerous game with the future of small businesses, and appeasing his political base at the cost of a whole generation of entrepreneurs will not stand.”