Harris, Cardin, Cantwell, Schumer, Booker, Cortez Masto Introduce Legislation to Invest in Minority-Owned Businesses
New Bill Would Broaden Reach of Minority Business Development Agency & Make It Permanent
WASHINGTON, D.C. — U.S. Senators Kamala D. Harris (D-CA), Ben Cardin (D-MD), Maria Cantwell (D-WA), Chuck Schumer (D-NY), Cory Booker (D-NJ), and Catherine Cortez Masto (D-NV) on Thursday 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.
“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.”
“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 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 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 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-CA) and Don Young (R-AK). 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.
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