VP Harris plans to help minority-owned small businesses

Vice President Kamala Harris used her time at the Freedman’s Bank Forum on Oct. 4 to announce new public and private-sector efforts to advance racial equity.

Harris said the administration recognizes the continued difficulty that Black-owned businesses have in finding funding. She acknowledged that they routinely are the first to suffer during an economic downturn.

Among a slate of new actions by the Biden-Harris administration, the vice president announced that the Small Business Administration (SBA) would propose a rule this fall to expand its lender base by lifting the moratorium on new Small Business Lending Companies. The action would allow new lenders to apply for a license to offer SBA-backed 7(a) small business loans.

Also, the Minority Business Development Agency (MDBA) will issue a $100 million notice of funding opportunity to provide technical assistance grants for entrepreneurship technical assistance providers to help businesses owned by socially and economically disadvantaged individuals launch, scale, and connect with growth capital.

Harris said to facilitate greater availability of small-balance mortgages, HUD would issue requests to solicit specific and actionable feedback on the barriers that prevent the origination of these mortgages and recommendations for increasing the volume of small-mortgage loans in federal programs.

“Small businesses are the engines of our economy and the path to economic prosperity for countless Americans in underserved communities,” the vice president asserted. “Community lenders – including CDFIs, MDIs, and others – are vital to unlocking the full economic potential of these communities, turning previously sidelined talent into a source of economic growth and shared prosperity for all.”

Earlier, Janet Yellen, the U.S. Department of Treasury secretary, said the White House sought to use the Freedman’s Bank Forum to shine a spotlight on how the administration’s pandemic relief efforts supported Black – and minority-owned businesses.

The forum, launched in 2015, seeks to develop strategies to help stamp out and overcome systemic racism in the financial industry.

“Unfortunately, for too long, the small business ecosystem in underserved communities has struggled to keep up with better-funded businesses and entrepreneurs in more prosperous communities,” Harris stated.

“Entrepreneurs of color regularly report being turned away by traditional financial institutions for loans at higher rates than their White counterparts. And the community lenders committed to filling that gap similarly report that shortfalls in capital and technical capacity limit their ability to invest in the communities that need them the most.”