USWCC Participates in Small Business Committee Roundtable
USWCC’s Washington Representative Janet Kopenhaver participated in a Small Business Committee Roundtable discussion hosted by Ranking Member Rep. Nydia Velazquez (D-NY-7) that focused on access to capital. Others legislators present were Reps. Judy Chu (D-CA-27), Donald Payne Jr. (D-NJ-10) and Alma Adams (D-NC-12).
Ranking Member Nydia Velazquez opens the Roundtable discussion. Also present were Reps. Alma Adams (far left, partially blocked) and Judy Chu (far right).
Rep. Velazquez stated in her opening remarks that improving access to capital for small businesses, especially women-owned and minority-owned small businesses, is a priority of the Committee. She asked those in attendance for suggestions and ideas about how the Committee legislatively could help. She pointed out that her goal was to improve access to loans in order to bring them into parity with other small businesses.
Rep. Judy Chu began the discussion about access to capital. She first remarked on the importance of small businesses which create 3 million jobs a year and 2/3 of all net new jobs in the United States. The biggest challenge for these small businesses is access to capital. She added that making the situation even worse is that lending institutions have been cutting the amount of funding for small businesses, with totals decreasing by 20% since 2008. Yet loans to large businesses have risen by 4% during the same time period. The Congresswoman described four Small Business Administration lending entities that were helping small businesses – Microloan, Small Business Investment Company (SBIC), 7a loan and 504 loan programs. Representatives from each of these groups presented a short background on their lending practices.
Rep. Judy Chu (D-CA) acknowledges a Wells Fargo representative as the largest 7a lender to small businesses.
Following the presentations, Velazquez saluted these lenders and pointed out that small businesses were having a hard time obtaining loans because the bigger loans are much more profitable and lending institutions tend not to offer loans below $5 million. This leads to a serious underserving of small business capital needs who do not require that much funding.
Rep. Donald Payne (D-NJ) discusses the congressional letter sent to SBA about better access to capital for small businesses.
Velazquez concluded that the SBA estimates that there are 125,000 small businesses that require capital in amounts from $250,000 to $5 million. She also made a pitch for the critical need for the provisions in Section 1071 of the Dodd Frank legislation to be implemented. This legislative language would mandate reporting requirements and data collection about loans to small businesses in order to identify business and community development needs and opportunities of women-owned, minority-owned and other small businesses. Financial institutions would need to track and report on applications and loans given to women- and minority-owned small businesses, as well as make this data available to the public.
Rep. Velazquez presses the need to implement new data collection and reporting requirements outlined in the Dodd Frank bill that would track lending to women- and minority-owned small businesses.
Janet suggested that the Committee request the Government Accountability Office (GAO) to conduct a study on how many women businesses owners want to expand their operations and/or workforces, but cannot do so because they do not have adequate capital. Janet explained that she has heard from some non-supportive Hill staffers when discussing the USWCC Wake Up call report that maybe these women business owners do not want more revenue or to increase their operations. A GAO study would greatly help to refute this misnomer.
Rep. Alma Adams (D-NC) thanks the attendees for their suggestions and insight into access to capital issues for small businesses.
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