FACT SHEET: Vice President Harris to Announce Support to Help Historically Underserved Entrepreneurs Tap into Bidenomics-Fueled Small Business Boom
During visit to local D.C. small businesses, Vice President Harris will announce grants to non-profit and community-based organizations from $125 million Capital Readiness Program to support underserved small businesses' access to capital—a key pillar of Bidenomics
Today, Vice President Kamala Harris will announce the 43 winners of the $125 million American Rescue Plan-funded Capital Readiness Program (CRP) awards competition, critical funding that will help underserved entrepreneurs launch and scale their small businesses—a key pillar of Bidenomics.
The CRP is the latest American Rescue Plan investment in navigation and support services for small businesses, building upon the $300 million in funds already announced or deployed through the Small Business Administration's (SBA) Community Navigator Program and the Treasury Department's State Small Business Credit Initiative (SSBCI). Under the Biden-Harris Administration, the United States has seen the strongest showing for new business applications on record—12.6 million—and recent reports show that the U.S. is continuing that trend in 2023 – a sign of confidence from entrepreneurs that Bidenomics is working. Vice President Harris will announce the awards while visiting a local D.C. minority-owned retail village, Sycamore & Oak, that houses other local small businesses.
The Capital Readiness Program is the largest-ever direct Federal investment in small business incubators and accelerators of its kind. Administered by the Minority Business Development Agency (MBDA), which was made permanent and expanded thanks to the President's Bipartisan Infrastructure Law, the Capital Readiness Program is also the largest initiative in the over 50-year history of the MBDA.
The 43 winning organizations – a mix of non-profit and community-based organizations, private sector entities, and institutions of higher education located across the country – are forming partnerships to assist and train underserved entrepreneurs seeking resources, tools, and support to start or scale their businesses in high-growth, high-wage industries such as healthcare, climate resilient technology, asset management, infrastructure, and more.
"President Biden and I firmly believe that for America's economy to be strong, America's small businesses must be strong. I am proud to announce that we will invest an additional $125 million in small businesses across our country through a national network of small business incubators and accelerators," said Vice President Kamala Harris. "President Biden and I are fighting to ensure that every entrepreneur in America — no matter who they are or where they live — can access the capital to start or grow a business, create jobs, and thrive."
Examples of awardees include:
- Arizona Hispanic Chamber of Commerce Foundation (Phoenix, Arizona) is receiving $3 million to deliver an enhanced business accelerator and incubator program to help underserved entrepreneurs in Arizona, Nevada, and California to access capital – including by connecting small businesses with their partners at Raza Development Fund, World Bank, and other funding entities, to help secure assistance on projects focused on renewable energy, information technology, and infrastructure development.
- Bridgeway Capital (Pittsburgh, Pennsylvania) is receiving $2 million to serve at least 340 minority-owned and rural entrepreneurs in Pennsylvania, West Virginia, and Ohio. Bridgeway Capital will use CRP funds to scale up its cohort-based Regional Investments for Social and Equitable Prosperity (RISE UP) business education programs to help entrepreneurs build capacity to access revenue-generating growth opportunities and the capital needed to realize these opportunities.
- The Urban League of Greater Atlanta, Georgia is receiving $3 million to deliver incubator and accelerator services through its Entrepreneurship Center to historically underserved entrepreneurs that are starting or operating enterprises in high-growth industries including healthcare, climate-resilient technology, infrastructure, and transportation and logistics.
- The Northern Great Lakes Initiative (Marquette, Michigan) – a partnership between a community lender and a small business incubator – is receiving $3 million to create a streamlined process that will support entrepreneurs in Michigan, with an emphasis on West Michigan, from the launch of an idea, through incubation of a new business, to capital for growth.
- The Capital Region Minority Supplier Development Council (Silver Spring, Maryland) is receiving $3 million to support its Ingenuity Consortium, a regional approach to supporting entrepreneurial opportunities for underserved small business owners through a collaborative of six Historically Black Colleges and Universities and Minority-Serving Institutions—like the University of Maryland Global Campus, Bowie State University, Morgan State University, and Virginia State University—and six capital access partners.
A full list of CRP award-winners is available here.
Additionally, the Biden-Harris Administration is announcing the first approvals of awards for up to $58 million to 12 states as part of the State Small Business Credit Initiative (SSBCI) Technical Assistance (TA) Grant Program. In total, the SSBCI TA Grant Program will provide roughly $200 million to states, territories, and tribal governments to help small businesses access the historic support for underserved small businesses included in the American Rescue Plan—including an unprecedented nearly $10 billion through the Treasury Department's SSBCI. SSBCI is expected to directly benefit roughly 100,000 small businesses over the next decade, including underserved entrepreneurs – providing capital, building ecosystems of opportunity and entrepreneurship, and creating new jobs and economic opportunity.
Investing in small businesses is at the center of the President and Vice President's plan to grow the economy from the middle out and bottom up, not the top down. Today's announcement through the Capital Readiness Program and the SSBCI TA Grant Program are just the latest steps the Biden-Harris Administration is taking to ensure that small businesses and entrepreneurs in every community benefit from the small business boom ushered in under this Administration.
Additional actions the Administration has taken under the President's Bidenomics agenda to support small businesses and underserved entrepreneurs include:
Expanding Access to Capital
- Delivering Historic Support to Minority-Supporting Community Financial Institutions to Improve Access to Capital for Historically Underserved Small Businesses. Stemming from funding Vice President Harris secured during her time in the Senate, through the competitive Community Development Financial Institutions (CDFI) Equitable Recovery Program, Treasury has awarded over $1.7 billion in grants to more than 600 CDFIs across the country to support lending to small businesses and microenterprises and other community investments. Additionally, the Emergency Capital Investment Program (ECIP) has distributed nearly $9 billion to CDFIs and Minority Deposit Institutions designed to support their provision of loans, grants, and forbearance for small businesses and minority-owned businesses, especially in low-income and underserved communities. Based on preliminary analysis, Treasury projects that investments across the entire ECIP portfolio may increase lending in Latino communities by nearly $58 billion and in Black communities by up to $80 billion over the next decade.
- Making Permanent Programs that Boost Lending to Underserved Communities. In order to address persistent gaps in access to capital for small businesses, earlier this year SBA finalized a rule allowing more than 100 nonprofit lenders participating in the Community Advantage pilot program to secure permanent access to SBA loan products. These lenders have a proven track record of higher rates of lending to underserved businesses, including Black, Latino, women, and veteran-owned businesses.
- Expanding Lending Licenses to Address Capital Access Gaps. For the first time in 40 years, SBA is increasing the number of licenses for non-depository lenders that make government-guaranteed loans in SBA's flagship loan program. This action will expand competition among lenders and provide more borrowing options for the capital that is so critical to small business growth. SBA will award new licenses based on lenders' organizational capacity and their capability to fill gaps in the small business lending marketplace, including those to new businesses, small-dollar loans, and those to traditionally underserved communities.
- Forming the Interagency Community Investment Committee (ICIC). In July of 2022, Vice President Harris announced the formation of the Interagency Community Investment Committee (ICIC) chaired by the Treasury Department. The ICIC facilitates collaboration and operational coordination of federal community investments to maximize the impact of federal dollars. This June, they released an Action Plan with a slate of new steps to improve the alignment of various federal programs and facilitate the flow of more resources into underserved rural and urban communities across the country.
- Streamlining and Simplifying Small Business Lending. SBA is modernizing the lending criteria and conditions for SBA's business loan programs and reducing red tape for SBA lenders, which will expand the number of credit-worthy business owners who can access an affordable loan. SBA is doing this by simplifying standards that determine who qualifies for an SBA loan, reducing paperwork required of lenders, and increasing lender flexibility for small-dollar loans.
- Delivering Historic Support for Small Business Investment in Clean Energy Projects. The Environmental Protection Agency (EPA) has launched the Greenhouse Gas Reduction Fund (GGRF), a $27 billion program to mobilize financing and private capital for clean energy projects that reduce air pollution. The GGRF will launch a national network of nonprofit finance institutions to invest in clean technology deployment, with a particular focus in low-income and disadvantaged communities, while simultaneously building the capacity of community lenders that serve those communities. As a result, small business owners will be able to access financing, such as below-market interest rate loans, that they may not have been able to obtain from traditional banks. Small business owners may also be able to receive predevelopment support and technical assistance to move early-stage project ideas from the drawing board to execution.
Making historic investments in helping small businesses navigate available resources
- Meeting Small Business Owners Where They Are. Funded by the American Rescue Plan, SBA's $100 million Community Navigator program provides funding to nonprofits, state and local governments, Resource Partners, and tribal entities who partner with trusted and culturally competent community service providers to close resource, capital and educational gaps for small businesses. As of July 2023, Community Navigators have helped secure nearly $250 million in approved funding for small businesses, trained over 290,000 business owners, and conducted 145,000 hours of one-on-one counseling. Last year, Federal agencies also hosted events and webinars aimed at supporting more equitable contracting opportunities under the Bipartisan Infrastructure Law and creating opportunities for key stakeholders across the contracting landscape to connect, including federal and State DOT officials, prime contractors, and industry.
- Providing dedicated support at MBDA Business Centers to help businesses become "contract ready." The Bipartisan Infrastructure Law made the MBDA permanent. MBDA also awarded nearly $3 million in funding to 26 of its Business Centers to support the hiring of federal contract specialists in each Center focused on assisting underserved businesses access contracting opportunities, including those stemming from Bipartisan Infrastructure Law funding. Specialists will provide wide-ranging technical assistance to help small businesses, including by facilitating access to capital and by coordinating targeted matchmaking between underserved businesses and both government acquisition offices and prime contractors.
- Maximizing Federal Agency Resources from the Bipartisan Infrastructure Law to Support Small Businesses. SBA, MBDA, and DOT all signed Memorandums of Understanding with each other to help small and disadvantaged businesses better access resources, foster equity in procurement initiatives, and improve access to capital and resources available from the Bipartisan Infrastructure Law. Specifically, the MOUs will help small businesses in transportation obtain bonds or increase their bonding capacity to compete in DOT-funded projects and will make available to DOT stakeholders the network of SBA Small Business Investment Company (SBIC)-related resources to facilitate access to private capital for small businesses pursing BIL contracts.
Leveraging federal spending to support small businesses
- Using Federal Contracting Dollars to Support Small and Disadvantaged Businesses. Recognizing that the federal government spends more than $650 billion each year on purchasing goods and services, President Biden has directed agencies to use federal purchasing power to grow federal contracting with underserved small businesses. He set a goal that 15% of federal procurement dollars go to small disadvantaged businesses by 2025. Last month, SBA announced that the federal government awarded a record $162.9 billion in federal contracts to small businesses and a record $69.9 billion of that to small disadvantaged businesses.
- Ensuring CHIPS Act Funding Supports Small Businesses. The Administration is ensuring that small businesses benefit from the $52.7 billion CHIPS Act. For example, this year the Department of Commerce released two funding applications that, among other elements, required applicants to outline how they will support inclusion of small businesses in their projects. In the fall, an additional funding opportunity for projects with capital investments below $300 million will be released, which may be of interest to small and medium sized businesses.
- Creating Contracting Opportunities in Clean Energy and Energy Efficiency. In addition to spurring billions in private-sector investments that will lower energy costs for small businesses, the Inflation Reduction Act includes $200 million for state-based grants to train contractors to install home energy efficiency and electrification improvements and nearly $9 billion for state-based rebate programs energy efficiency and appliance upgrades for consumers. These investments will save families money and create jobs and opportunity in the home contracting sector, which contains hundreds of thousands of small businesses.
- Leveling the Playing Field for Innovative Small Businesses. The Inflation Reduction Act doubled the Research and Development (R&D) Tax Credit to $500,000 for small businesses, leveling the playing field and bolstering the ability for small businesses to innovate and commercialize to solve global problems.
- Improving Federal Certifications for Small Businesses. The Department of Transportation (DOT) has proposed a rule to modernize the Disadvantaged Business Enterprise (DBE) and Airport Concession DBE (ACDBE) programs, including, among other things, increasing the net worth threshold for DBEs so that minority- and women-owned businesses do not "graduate out" of the DBE program once they start achieving modest success, as well as simplifying eligibility certification requirements and the interstate certification process. Also, in January, SBA launched its new VetCert platform, featuring customer experience improvements for Veteran entrepreneurs and business owners seeking certification.
- Expanding Rural Opportunities. The Inflation Reduction Act significantly expands the Rural Energy for America Program, which supports rural small businesses and agricultural producers with clean energy and energy efficiency upgrades. The U.S. Department of Agriculture estimates that this expansion will reach more than 41,500 small businesses and farms. The Act also provides more than $9 billion to assist rural electric cooperatives, which serve more than 21 million businesses, homes, and farms, in boosting resilience, reliability, and affordability, including through clean energy projects.
- Cutting Energy Costs for Small Businesses. The Inflation Reduction Act includes a number of provisions that will save small business owners money on energy costs including:
- A tax credit that covers 30% of the cost of switching over to low-cost solar power – lowering operating costs and protecting against the volatile energy prices that are currently squeezing small businesses.
- A tax deduction of up to $5 per square foot in commercial buildings to support energy efficiency improvements that deliver lower utility bills.
- A tax credit of up to $7,500 for purchasing clean commercial vehicles up to 14,000 lbs in weight, like vans and pick-up trucks, or up to $40,000 for purchasing clean heavy-duty vehicles, which will help small businesses save on fuel and operating costs.
The 43 entities will complete the final stages of the process necessary for their award to be distributed in the coming weeks.
Kamala Harris, FACT SHEET: Vice President Harris to Announce Support to Help Historically Underserved Entrepreneurs Tap into Bidenomics-Fueled Small Business Boom Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/363676