Creative Capital is Driving Economic Recovery
As small business owners get creative in raising capital, the economy is beginning to show steady improvement. It’s no secret that credit is a long-standing problem for small business owners. And while the Small Business Administration is offering more loans to entrepreneurs than before the Great Recession, many are still having a hard time finding the credit they need.
Small Business Majority’s scientific opinion polling revealed 90% of small business owners view the availability of credit as a problem. Furthermore, 61% agreed that it is harder to get a loan now than it was in 2008.
Mick Mulvaney is something of a novelty among Washington bureaucrats: He seems to want less power.
Mulvaney, as acting director of the Consumer Financial Protection Bureau, just proposed watering down his own agency in order to make it less capable of fulfilling its mission to protect consumers. In doing so, he showed he has no regard for the millions of American small businesses that need fraud protection and want to see Wall Street held accountable for practices that harm our economy.
Not one of Mulvaney’s recommendations would help the CFPB do its job better. He asked lawmakers to put the agency at the mercy of politics by subjecting it to congressional appropriations, instead of funding it through the Federal Reserve as it is now, and said he wants CFPB rules to be subjected to legislative approval. He also believes the president should have direct oversight of the bureau’s director, including the option to remove the director for purely political reasons. Finally, Mulvaney asked for more policing of the agency through the creation an inspector general’s office housed at the agency that would monitor the CFPB’s work.
This post was co-authored by Chicago City Treasurer Kurt A. Summers, Jr. and Brad McConnell, CEO of Accion serving Illinois & Northwest Indiana.
It’s difficult for most small businesses to obtain a loan. Just ask Margo Strotter, owner of Ain’t She Sweet Cafe, which now has two locations–one in Bronzeville and one in Beverly.
When Margo was starting out she was her own bank, but she knew that wasn’t a long-term solution to her capital needs so she eventually sought help from traditional lenders. Unfortunately, those institutions were either unwilling or unable to help Margo.
Then she had a breakthrough. While attending an event at the Urban League, Margo was put in touch with Accion, a lender that is committed to helping small businesses, particularly those in underserved communities. She ended up receiving two loans from Accion over the years: The first helped her get her business off the ground, the second came 10 years later and allowed her to expand to a second location.
In Chicagoland, there are a lot of Margos. In fact, the area is home to more than 230,000 small firms, making it the country’s third-largest small business hub. And yet, as big banks focus on big businesses, it has become harder and harder for Chicago’s small business owners and entrepreneurs to secure reasonable loans from responsible lenders.
Entrepreneurs are a vital component of a thriving American economy. Indeed, small businesses represent 99% of all employer firms and account for half of our nation’s jobs and economic output, and their creativity spurs innovation in all sectors of the economy. That’s why it’s important to take time to appreciate our country’s entrepreneurs during November, which is National Entrepreneurship Month.
During National Entrepreneurship Month, policymakers should recognize our nation’s innovators and job creators by taking time to address the primary issues that are holding them back, including lack of access to capital, the need to stabilize healthcare costs and fairness in tax reform efforts.
Improving access to capital is one of the most crucial issues for entrepreneurs. Small Business Majority’s polling found 90 percent of small business owners identify access to capital as a top concern. This finding is no surprise given that many small business owners are still struggling to access capital post-recession. And when small businesses are approved for loans, it’s often not for the full amount requested. In fact, the Federal Reserve found of those small business owners who did receive a loan, only half were approved for the full amount requested. Continue reading
When Jose Rodriguez opened OFBS NOW, a small insurance and brokerage agency in Pasadena, he knew that one day he might want to take out a loan to grow his business. After three years of success, he’s getting ready to take that next step — but he has some trepidation.
“I’ve seen a lot of my small business peers take out bad loans and become trapped in cycles of debt,” said Rodriguez. “Before taking out a loan, I wanted to make sure I had all the right information so I didn’t fall victim to predatory lending.”