In a move that could invigorate black small businesses amid COVID-19, Capitol Hill leaders have proposed new legislation to invest in minority businesses.
More specifically, a group of U.S. senators that includes Senate Democratic Leader Chuck Schumer (D-N.Y.), Sen. Cory Booker (D-N.J.), and Sen. Kamala D. Harris (D-Calif.) in early July introduced the Minority Business Resiliency Act. The bill is aimed to build-up the Minority Business Development Agency (MBDA) several ways. It calls for making the agency permanent, expanding its reach with new regional MBDA offices, intensifying its grant-making capacity, and enlarging its coordination with other federal agencies.
Part of the U.S. Department of Commerce, the MBDA’s efforts include supporting minority firms in all industries, ranging from construction to manufacturing to information technology to professional services.
Broken down in a news release, the 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.
The coronavirus pandemic displayed 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 in 2020, an estimated 41% of Black-owned businesses, 32% of Latinx-owned businesses, and 26% of Asian-owned businesses closed while 17% of white-owned businesses closed.
Booker stated, “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. 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.”
“The COVID-19 pandemic has shed light to the disparities already facing minority-owned small businesses,” said Harris.commenting on the bill. “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.”
A similar bill was introduced in the House last year by Congressmen Jerry McNerney (D-Calif.) and Don Young (R-Alaska). It is endorsed by the Page 30 Coalition, which includes the U.S. Black Chambers, U.S. Hispanic Chamber of Commerce, 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.
“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,” added Sen. Ben Cardin, (D-Md.), a sponsor of the bill. “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.”
In May, Booker and Cardin presented a proposal to block underserved and small businesses from falling further behind during and after the COVID-19 economic crisis, Black Enterprise reported.