MBDA Ruling is a Disappointing Setback for Underserved Small Businesses

“We are profoundly disappointed and strongly disagree with U.S. District Court Judge Mark T. Pittman’s decision today, which ruled that the Minority Business Development Agency’s (MBDA) presumption that businesses owned by Blacks, Latinos, and other minorities are disadvantaged is unconstitutional. 

The MBDA is the only federal agency solely dedicated to supporting the development and expansion of minority business enterprises, which is essential to building a thriving and equitable economy. As business formation has surged over the past three years, the agency has been a proven lifeline for many entrepreneurs seeking to start and grow their businesses in our nation’s most under-resourced communities. Their mission is critical to addressing the historic barriers that these businesses face. 

The agency’s important work is now more important than ever as it is playing a critical role in deploying technical assistance to underserved businesses through the State Small Business Credit Initiative (SSBCI). SSBCI has a particular focus on helping socially and economically disadvantaged entrepreneurs access the capital and technical assistance they need to invest in job-creating opportunities. The MBDA is a critical partner in ensuring federal dollars are distributed equitably. 

This ruling and others like it, such as the recent lawsuits targeting grant and loan programs for people of color, will restrict access to critical capital and opportunities for small businesses that have historically been shut out of traditional banking opportunities. Government programs and private institutions must not be deterred from supporting business owners of color, particularly Black entrepreneurs, who continue to face structural inequities preventing their growth and prosperity. 

Small Business Majority firmly believes in the mission of the MBDA and we will continue to stand by the Agency and champion their efforts to support our nation's minority entrepreneurs. We hope that this case will be dismissed in the Court of Appeals. Moving this case forward would be a setback to the progress made in recent years to expand diverse entrepreneurship opportunities.”

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