[Congressional Record Volume 165, Number 130 (Wednesday, July 31, 2019)]
[Senate]
[Page S5253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARDIN:
  S. 2361. A bill to amend the Small Business Act to increase lending 
to underserved borrowers through the largest loan program of the Small 
Business Administration, and for other purposes; to the Committee on 
Small Business and Entrepreneurship.
  Mr. CARDIN. Mr. President, today I am introducing the Closing the 
Credit Gap Act to make the Small Business Administration's (SBA) 
Community Advantage program permanent.
  SBA created Community Advantage in 2011 to provide capital and 
support to small businesses that have been historically underserved by 
SBA's highest volume loan program, 7(a).
  Community Advantage allows nonprofit mission lenders like SBA 
microlenders, Community Development Financial Institutions (CDFI) and 
SBA 504 lenders to make 7(a) loans of up to $250,000 to small 
businesses.
  The program has shown year after year that it is more capable of 
getting capital into the hands of minority, women and veteran 
entrepreneurs than the 7(a)program. During Fiscal Year 2018, the most 
recent year for which complete data is available, only 4.5 percent of 
7(a) approvals went to Black business owners compared to 12 percent of 
Community Advantage approvals; 9 percent of 7(a) approvals went to 
Hispanic borrowers compared to 17 percent in the Community Advantage 
program; women-owned businesses received only 18 percent of 7(a) 
approvals while receiving 30 percent of all Community Advantage 
approvals; and veterans, who only received 4 percent of 7(a) approvals, 
received 10 percent of approvals in the Community Advantage program.
  Capital is the lifeblood of small businesses, so for many women, 
minority, veteran and other underserved entrepreneurs, Community 
Advantage is a lifeline, because the program fills a gap in traditional 
credit markets.
  Minority-owned business are two to three times more likely to be 
denied credit; more likely to avoid applying for loans, based on the 
belief that they will be turned down; and more likely to receive 
smaller loans and pay higher interest rates on the loans that they do 
receive. Rural businesses owners often face an uphill battle to secure 
funding for their startups. And women are significantly less likely 
than men to be approved for a business loan and are more likely to 
experience funding gaps.
  My bill will make this vital program a permanent loan product 
administered by SBA, and it will allow SBA to lift the cap up to 
$350,000 from $250,000 to help borrowers in more expensive regions and 
industries, as well as victims of abusive loan products.
  My home State of Maryland has the highest concentration of minority- 
and women-owned businesses in the country. That designation makes me 
proud, but it also makes me think of the countless entrepreneurs whose 
dreams of business ownership or growth remain unfulfilled because they 
could not get financing.
  If we pass the Closing the Credit Gap Act, we can empower more 
entrepreneurs who have the ideas but not the networks or capital needed 
to start and grow their businesses and create jobs.
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