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 positive development for small businesses. However, alternative sources of financing operate in an almost entirely unregulated market—making some 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 obtaining responsible capital by:
- Promoting responsible lending practices by lenders and brokers as set forth in the recently released Small Business Borrowers’ Bill of Rights.
- Identifying state and federal agencies that can promulgate 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. Specific actions include:
- Directing the Securities and Exchange Commission (SEC) to issue final Title III crowdfunding rules.
- 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 Consumer Financial Protection Bureau's collection of small business lending data.