Cantwell, Cardin Lead Introduction of Legislation to Expand & Make Permanent Minority Business Development Agency
WASHINGTON, D.C. – Today, U.S. Senator Maria Cantwell (D-WA) joined U.S. Senate Committee on Small Business and Entrepreneurship Chair Ben Cardin (D-MD) and 13 Senate colleagues in introducing the Minority Business Resiliency Act of 2021. The bill would make permanent and expand the reach of the Minority Business Development Agency (MBDA), which was created by Executive Order in 1969. The bill would also place MBDA regional offices in more communities, increase the agency’s grant making capacity, and create a Senate-confirmed Assistant Secretary of Commerce for Minority Business Development.
Introduction of the bill comes on the heels of the Biden Administration’s FY2022 budget proposal, which would increase funding to MBDA by more than 40 percent and appoint an Assistant Secretary of Commerce to manage the agency.
“The Minority Business Development Agency helps entrepreneurs launch and grow their businesses,” Cantwell said. “This legislation would make this agency permanent and ensure that we are doing everything we can to support minority-owned companies during these times of unprecedented challenges due to the COVID-19 pandemic.”
“MBDA is one of our best tools to address the historic barriers to small business ownership that Black, Latino, Asian and Indigenous entrepreneurs face,” Cardin said. “Congress must make MBDA permanent and give the agency the resources necessary to support minority entrepreneurs who face pervasive and historic barriers to business ownership.”
The Minority Business Resiliency Act of 2021 would give the nationwide MBDA program certainty by codifying it into law and strengthen support for MBDA Business Centers. As of July 2020, the MBDA Business Center in Tacoma worked with nearly 200 clients throughout Washington state and the Pacific Northwest from the African, Asian, Hispanic American, American Indian and Alaskan Native communities. The Center offers a range of services, including business consulting, financial management and planning, market research, and webinars during the COVID-19 crisis. In 2019, the Center received an “outstanding” rating from the Department of Commerce for helping secure millions of dollars in contracts and transactions for minority-owned Washington State businesses.
Minority business enterprises (MBEs) have been among the hardest hit during the pandemic. According to a National Bureau of Economic Research analysis of the impact of COVID-19 on small businesses, from February to April 2020, an estimated 41 percent of Black-owned businesses, 32 percent of Latino-owned businesses, and 26 percent of Asian-owned businesses closed while 17 percent of white-owned businesses closed.
The disproportionate impact of the COVID-19 pandemic on minority-owned businesses reflect long-standing racial disparities in access to capital, mentorship, and technical training. MBEs are more likely to be denied loans than non-MBEs; on average, the annual gross receipts reported by MBEs is only one-third of the annual gross receipts reported by non-MBEs; and MBEs are half as likely as non-MBEs to have employees.
The Minority Business Resiliency Act of 2021 would address the disparate impact COVID-19 has had on minority businesses and support them on the road ahead by:
- Making MBDA permanent in statute and formally establishing processes for its largest program, the Minority Business Development Center (MBDC) Program;
- Expanding the geographic reach of the MBDA by authorizing the creation of regional MBDA offices and rural business centers;
- Creating a new program to partner with historically Black colleges and universities (HBCUs) and minority serving institutions (MSIs) to build a pipeline of entrepreneurial talent;
- Designating a Senate-confirmed Assistant Secretary of Commerce for Minority Business Development to lead the MBDA;
- Increasing MBDA’s grant-making capacity to carry out economic development and research; and
- Increasing MBDA’s fiscal year 2021 budget to fund these initiatives.
Cantwell was also a cosponsor of the Minority Business Resiliency Act of 2020.
In addition to Senators Cantwell and Cardin, the legislation is cosponsored by Senate Majority Leader Chuck Schumer (D-NY), and U.S. Senators Alex Padilla (D-CA), Jacky Rosen (D-NV), Kyrsten Sinema (D-AZ), Cory Booker (D-NJ), Catherine Cortez Masto (D-NV), Chris Van Hollen (D-MD), Raphael Warnock (D-GA), Dianne Feinstein (D-CA), Ben Ray Lujan (D-NM), Richard Blumenthal (D-CT), Dick Durbin (D-IL), and Tina Smith (D-MN).
The bill is endorsed by the National Urban League, U.S. Black Chambers (USBC), Small Business Majority, Association Enterprise for Opportunity (AEO), National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), the Page 30 Coalition, and Local Initiatives Support Coalition (LISC).
A section-by-section summary of the bill is available HERE.
The full text of the letter is available HERE.
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