Next to owning a home, business equity is the largest source of wealth in the United States. Small businesses are the backbone of the American economy, providing almost half of all jobs in the U.S. and creating nearly two-thirds of all new jobs.
Yet barriers to credit access prevent Americans from starting businesses and building generational wealth, further widening the racial wealth gap. Congress and federal agencies are charged with enforcing fair lending laws and ensuring equitable access to capital, but don’t have the data they need to answer basic questions about small business lending. Further, the COVID-19 pandemic and the uneven economic recovery have continued to impact small business owners.
It is especially critical to avoid placing additional burdens on microbusinesses and small businesses of color, which historically have been most vulnerable at times of economic peril. To that end, the Center for Responsible Lending (CRL) is advocating for two measures that would help small business owners: improving Paycheck Protection Program (PPP) loan forgiveness and strengthening section 1071 of the Dodd-Frank Act.