Cantwell Secures Inclusion of Bill to Boost Minority Business Development in Infrastructure Package
Legislation would make permanent Minority Business Development Agency
Established by executive order by President Richard Nixon in 1969 to promote the growth and competitiveness of minority-owned businesses by providing access to capital, access to contracts and access to market opportunities, the Minority Business Development Agency (MBDA) was targeted for elimination in Donald Trump's federal budget request for the 2018 fiscal year — only to be subsequently restored in the president's FY19 budget, becoming the only federal agency to be restored after its proposed elimination.
After such a rollercoaster existence, Sen Maria Cantrell (D-Wash), chairwoman of the Senate Commerce, Science and Transportation Committee, has now gotten a new measure related to the MBDA included as part of the current bipartisan infrastructure proposal.
Cantwell successfully steered the Minority Business Resiliency Act of 2021 through the Commerce Committee, which passed it overwhelmingly by voice vote. Hours later, it was approved by the full Senate.
“Growing minority businesses is a priority,” said Cantwell. “By making this agency and its programs permanent, along with doubling its budget, provides the support needed to give these business owners the capacity they need to create new jobs.”
The Minority Business Resiliency Act of 2021 would codify the MBDA in law instead of executive order, making it permanent. It would authorize $110 million in annual funding to the MBDA through fiscal year 2025—more than double the agency’s current appropriation of $48 million.
In addition, it would locate new MBDA regional offices in more communities, create new programs to assist rural minority-owned businesses, enhance workforce development and entrepreneurship programs at minority-serving institutions of higher education, increase the agency’s grant-making capacity, and create a Senate-confirmed position to oversee the agency at the Department of Commerce. Cantwell introduced the legislation in April.
Cantwell met last month with minority entrepreneurs from across Washington state to discuss how they had utilized the resources, technical assistance and training available through the MBDA Business Center in Tacoma to successfully grow their small businesses. As of July 2020, the Tacoma MBDA Business Center worked with nearly 200 clients throughout Washington state and the Pacific Northwest from the Black, Asian American, Pacific Islander, 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. Last month, Commerce Secretary Gina Raimondo joined Sen Cantwell to announce MBDA Tacoma would receive a $2 million award to support their operations over the next five years.
Minority businesses hit by pandemic
Minority business enterprises (MBEs) were among the hardest hit during the pandemic. According to a National Bureau of Economic Research analysis, 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. This disproportionate impact exposed long-standing racial disparities in access to capital 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.
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