One of the major challenges entrepreneurs confront is lack of quality, affordable capital. Banks favor large corporations over independent businesses -- and, with racial and gender discrimination widespread, they are making it especially hard for entrepreneurs of color and women entrepreneurs of all races to launch and expand their own businesses. This hurts the small business sector and the country overall by contributing to wealth inequality and compounding the racial wealth gap.
We, the undersigned small business owners, support a set of comprehensive banking and capital access reforms that ensure transparency, fairness, and equity in small business lending, including legislation that:
- Protects small businesses from predatory lenders and debt collectors
- Makes SBA loans more available and a better match for small businesses
- Eliminates bank processing lag time that slows down cash flow
- Provides more financing that focuses on community reinvestment instead of extraction from communities
- Strengthens anti-discrimination protections
- Protects businesses from cyber-fraud and cyberattack
- Provides alternatives to the friends-and-family network for capital
When lawmakers consider policy solutions to address these issues, we call on them to keep in mind these core small business ideals:
- Banks and other financial institutions, in exchange for charters and/or licenses to do business, should serve the public interest (and not only shareholders) -- they receive public support to exist, play an important structural role in our economy, and have fundamental obligations to the public.
- Racial, gender, and economic equity are central to the public interest. Our current financial system reflects centuries of inequity. We need a system of capital access that moves us toward rebuilding that system based on principles of equity.
- Small businesses should receive capital on an equitable basis and on fair terms, taking broader equity concerns and community needs into account. We need protection against predatory inclusion or infusions of capital that promote displacement and further inequity.