WASHINGTON, D.C. – Today, U.S. Senator Jacky Rosen (D-NV), a member of the Senate Committee on Small Business and Entrepreneurship, announced her original co-sponsorship of the Minority Business Resiliency Act of 2021. This legislation would make the Minority Business Development Agency (MBDA) permanent under federal law and increase the number of MBDA regional offices to serve additional minority small business communities impacted by COVID-19.
“Especially during this time of economic disruption that has disproportionately affected minority populations, we must work to provide our minority-owned small business community with the resources they need to grow their enterprises,” said Senator Rosen. “The Minority Business Development Agency has helped countless businesses succeed and this legislation will allow for more to obtain the assistance they need. As a member of the Senate Committee on Small Business and Entrepreneurship, I will continue to work alongside Chairman Cardin to provide Nevada and our nation’s small businesses with the critical resources they need to not only recover from the pandemic, but to thrive.”
BACKGROUND: Minority business enterprises (MBEs) have been among the hardest hit during the pandemic. According to a National Bureau of Economic Research analysis of the impact of COVID-19 on small businesses, 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.
On March 30, 2021, the Federal Reserve Bank of New York released a report that found that in 2020, among entrepreneurs over the age of 45 – who represent 80 percent of all small business owners – there was a 19 percent decrease in active ownership for Asian-owned businesses, a 16 percent decrease for Black-owned businesses, and an 11 percent decrease for Latino-owned businesses while white-owned businesses experienced an 8 percent decrease.
The disproportionate impact of the COVID-19 pandemic on minority-owned businesses reflect long-standing racial disparities in access to capital, mentorship, 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.
The Minority Business Resiliency Act of 2021 would address the disproportionate impact COVID-19 has had on minority businesses and support them on the road ahead by:
- making MBDA permanent in statute and formally establishing processes for its largest program, the Minority Business Development Center (MBDC) Program;
- expanding the geographic reach of the MBDA by authorizing the creation of regional MBDA offices and rural business centers;
- creating a new program to partner with historically Black colleges and universities (HBCUs) and minority serving institutions (MSIs) to build a pipeline of entrepreneurial talent;
- designating a Senate-confirmed Assistant Secretary of Commerce for Minority Business Development to lead the MBDA;
- increasing MBDA’s grant-making capacity to carry out economic development and research; and
- increasing MBDA’s fiscal year 2021 budget to fund these initiatives.
The Minority Business Resiliency Act of 2021 is endorsed by the National Urban League, U.S. Black Chambers (USBC), Small Business Majority, Association Enterprise for Opportunity (AEO), National Asian Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), the Page 30 Coalition, and Local Initiatives Support Coalition (LISC).