Scott, Hickenlooper Introduce Bill to Encourage Rural and Minority-Owned Small Business Growth
WASHINGTON — Today, U.S. Senators Tim Scott (R-S.C.) and John Hickenlooper (D-Colo.) introduced the Expanding Access to Credit for Small Business Act, widening the criteria of the Small Business Administration’s (SBA) flagship 7(a) small business loan program to include fintech lenders.
At the height of the coronavirus pandemic, millions of rural and minority small business owners did not have access to banks, making it difficult to access the Paycheck Protection Program (PPP) and other financial services. These businesses are often located in lower-income neighborhoods. The Expanding Access to Credit for Small Business Act would allow fintech companies, that stepped in the gap to provide loans to small businesses, to participate in the 7(a) program.
"As a former small business owner, I know all too well the barriers to entry that prevent entrepreneurs from opening up shop," said Senator Scott. "The Expanding Access to Credit for Small Business Act is just one step we can take to ensure minority communities and folks in rural America have just as much access to the American Dream as anyone else."
"Our bipartisan bill will modernize the SBA’s primary loan program to help underserved small businesses grow and thrive," said Senator Hickenlooper. "You shouldn’t need a big bank to get an SBA loan."
The bill would lift the Small Business Lending Company (SBLC) moratorium and provide resources for the success of the program. Specifically, the bill would:
- Remove the moratorium on new SBLC licenses;
- Re-appropriate unused COVID funds from various stimulus bills to be used by the SBA to provide oversight of the new SBLCs;
- Include reporting requirements to gauge the success of the program;
- Include a rule of construction that would prohibit the SBA administrator from becoming the primary regulator of fintech companies; and
- Require the administrator to check for financial soundness and compliance when considering new applicants to the program.
What They’re Saying
The Electronics Transactions Association: "ETA members — both banks and fintechs — have helped millions of American small owners access billions of dollars under the Paycheck Protection Act. We applaud and support Senators Scott and Hickenlooper’s legislation that builds on this success and allows fintechs to participate in the SBA’s 7(a) small business lending program," said Scott Talbott, SVP of government affairs.
Innovative Lending Platform Association: "The Innovative Lending Platform Association applauds Sens. Scott and Hickenlooper for the introduction of the Expanding Access to Affordable Credit for Small Businesses Act. Fintechs played a critical role in reaching millions of the smallest businesses during PPP, many of which were left behind by traditional lending institutions. By removing the moratorium on new SBLC licenses, new types of lenders will be able to provide responsible and affordable credit to all types of small businesses including those that are minority-owned or rural based."
Bipartisan Policy Center: "BPC Action applauds the efforts of Senators Scott and Hickenlooper to build on successful features of the Paycheck Protection Program (PPP) by allowing more non-depository financial institutions to participate in government-guaranteed small business lending via the Expanding Access to Credit for Small Businesses Act. As the country heads toward economic recovery, expanding access to capital for small businesses — especially those hardest-hit by the crisis — will be critical. We look forward to working the senators and helping?this legislation become signed into law," said Michele Stockwell, executive director of Bipartisan Policy Center Action.
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