Washington, DC – U.S. Senator Kirsten Gillibrand today announced that following her push, the Senate passed the Microloan Modernization Act, bipartisan legislation she cosponsored that would expand the Small Business Administration’s (SBA) Microloan Program to provide loans and technical assistance to minority and women business owners, as well as other entrepreneurs, who face challenges accessing the capital needed to start and expand small businesses because they are often denied loans by banks.
The Senate passed the Microloan Modernization Act last night. The bill was sponsored by Senator Deb Fischer (R-NE) and also cosponsored by Senators Tim Scott (R-SC), Chris Coons (D-DE), Jeanne Shaheen (D-NH), Joe Donnelly (D-IN), and Gary Peters (D-MI). The bill passed with unanimous support by the Senate Small Business Committee in March this year, and has also passed in the House of Representatives. The legislation will now need to be conferenced with the House-passed bill ahead of final passage into law.
“Many New Yorkers are proud entrepreneurs with great ideas and the drive to see them through, and I’m very pleased that this bipartisan bill to support them has passed the Senate,” said Senator Gillibrand. “The bipartisan Microloan Modernization Act would give many would-be small business owners, who often struggle to get loans from banks, more efficient access to capital to start and grow their businesses. New Yorkers are working incredibly hard to make their communities thrive, and I was proud to fight for this legislation to support small businesses, reward work and entrepreneurship, and help fix our economy.”
The Microloan Modernization Act would strengthen the SBA Microloan Program by raising the total limit on outstanding loans to intermediary lending organizations, which would allow for more loans to be made to minority, women, and other business owners. An additional provision of the Microloan Modernization Act that expands opportunities for more hands-on training assistance to help small business owners succeed passed into law as part of the Fiscal Year 2018 omnibus appropriations bill earlier this year.
According to the U.S. Senate Committee on Small Business and Entrepreneurship, women receive less than 5 percent of conventional small business loans, even though women-owned businesses make up nearly 40 percent of all businesses in the country. Additionally, the U.S. Department of Commerce has found that among smaller minority-owned businesses, loan denial rates for minority firms were about three times higher compared to those of non-minority-owned firms.
Since its inception, the SBA Microloan Program has delivered more than $722 million in loans to small businesses across America that have created or retained 212,000 jobs. In Fiscal Year 2017 alone, the program loaned over $8.4 million to 821 New York entrepreneurs and business owners. The SBA Microloan Program makes direct loans and grants to intermediary, non-profit organizations, which in turn provide microloans of up to $50,000, business-based training, and technical assistance to start-up and growing small businesses. The average loan size is $13,000.