U.S. Senator Tammy Duckworth (D-IL) has introduced the Microloan Program Expansion Act of 2019, which would improve the Small Business Administration’s (SBA) Microloan Program to help more small businesses – particularly women, Veterans, low-income and minority entrepreneurs – that may have been overlooked by traditional commercial lenders
The legislation would increase the total amount of loans that lenders may keep on their books, eliminate an outdated rule that prevents SBA from distributing more than 1/55th of its funding in any given state during the first half of the year, and require SBA to report to Congress and the public on the success of the microloan program.
Sheri Flanigan-Vazquez, chief operating officer of Justine Petersen, said the legislation “would significantly improve the program, providing more resources and removing barriers microlenders currently face in serving harder to reach communities and borrowers most in need of the resources to start their own dream business.”
Most small business owners seek small loans to grow their companies, with 55 percent of all small businesses seeking loans under $100,000. However, a Harvard white paper found the largest gaps in financing are for loans under $50,000. Since 1992, the SBA Microloan Program has helped fill that gap by providing small businesses owners with access to loans of less than $50,000.