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Advocacy Update: SBA Microloan Program Goes To Markup

Posted By WIPP Advocacy Team, Tuesday, March 10, 2020

Updated on March 11, 2020 at 1 PM EDT

 

Today, only 16% of conventional loans and 4.4% of commercial loan dollars go to women-owned businesses. One of WIPP’s Policy Priorities, to “Increase access to capital for women-owned businesses,” continues to gain traction through legislation modernizing the SBA Microloan Program. 

The House Committee on Small Business (HSBC) held a markup March 11 where both SBA Microloan Program modernization bills, H.R. 6079 and H.R. 6078, passed the Committee unanimously without amendments.Chair Nydia Velázquez acknowledged WIPP for its support. Next stop will be vote by the full House.

 March 7, 2019 HSBC Hearing

As I reminder, the SBA Microloan Program assists entrepreneurs in obtaining loans under $50,000. SBA provides funds to nonprofit intermediary lenders. Intermediaries, in turn, provide microloans to small businesses. At 48.7%, women are the greatest consumers of these microloans.

In March 2019, at a HSBC hearing on Modernization of the Microloan Program, Michelle Richards, Executive Director of the Great Lakes Women’s Business Council, testified on behalf of WIPP. She called attention to the 1/55th rule as the number one pain point for microlenders and advocated for its elimination in any modernization of the program. 

The 1/55th rule, which was implemented as part of the pilot program in 1991. Current law requires that for the first half of each fiscal year the lesser of $800,000 (or 1/55th of available loan funds) is made available to loan intermediaries in every state, restricting the availability of capital for small businesses in larger states and underutilization of available funds by smaller states.

On the Senate side, our Advocacy Team worked closely on this issue with Senator Tammy Duckworth (D-IL) last April, who introduced the Microloan Program Enhancement Act (S. 996). The bill adopts two of WIPP’s key recommendations on improvements that should be made to the Microloan Program. Read more

 

 

Tags:  Advocacy  microloan  SBA 

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