"Access To Capital And The American Dream"
By Congressman Byron Donalds
Published in "Urban One's Engaging Black America 2023" – July 26, 2023

In recent years, national polling has suggested that belief in the American Dream is waning. The same national ethos that inspired our nation to grow from rural agrarian republic to hegemonic global superpower; the same inspiration that has historically captivated the ambitious imagination of billions across our globe; has falsely been lambasted as an overly idealistic relic of a bygone era by many self-defeatist detractors on the left. I refuse to subscribe to these outlandish lies.

My siblings and I were raised by a single mother in the inner city of Brooklyn, New York. She worked multiple jobs to keep a roof over our heads. With hard work and a strong attention to education, I graduated high school, college, became a longtime banker in Southwest Florida, and eventually won elected office. My story is unique to my own circumstances, but it is not an exception by any means. Everyone deserves the opportunity to succeed based upon their own merit, and as a member of Congress, I’ve made it a goal to utilize my background in the financial services industry to help bolster an American Dream for all.

Since joining Congress in 2021, one of my top legislative priorities has been to promote access to capital for individuals, and businesses of all sizes, through my Access Agenda. At its core, the Access Agenda aims to remove burdensome and unnecessary federal red tape, while promoting innovation and free market solutions. As a recovering banker, I have seen firsthand the technological advancements in the financial sector and their impact, particularly on the underbanked and non-banked communities. Economic opportunities that were once limited, have now become available to members of every socioeconomic status. Innovations like digital assets and FinTechs (financial technology firms) have opened the marketplace to the masses and have expanded financial literacy to an entirely new generation.         

In the early weeks of the Paycheck Protection Program (PPP) many minority and rural-owned businesses struggled to gain access to loan programs, due in large part to the limited number of lenders. Many of the lenders lacked relationships with these businesses and instead, prioritized existing relationships. The lenders viewed these pre-existing lending relationships as a more efficient and streamlined lending process. As the pandemic continued, FinTech firms began to fill the lending gap. By the end of PPP there were over 5,000 lenders, many of them non-bank financers, which helped provide financial assistance to those that had been struggling due to a lack of banking relationships. A May 2021 New York Fed study even found that “PPP applicants self-select among lenders, with underserved borrowers gravitating towards FinTech companies,” and nearly 25% of black-owned companies applied to FinTech lenders–more than twice the rate of firms whose owners were white, Asian, or Hispanic.

In the 118^th Congress, I am actively working to reform lending processes that will provide real returns for the American people. The 7(a) Lending Program is the Small Business Administration’s largest and most popular program. This program extends a government guarantee of 50-90%, to private lenders such as banks or credit unions that use their own deposits to provide loans to small businesses. The program also extends this guarantee to non-depository lending institutions like Small Business Loan Companies (SBLC’s.) While these loans are highly coveted since they typically offer better rates, lower fees, longer terms, and more flexible qualification terms and down payments, the number of licensed SBLC’s is capped at 14. Consequently, I introduced H.R. 3604 – The Expanding Access to Affordable Credit for Small Businesses Act, to fix this issue. My bill would remove this moratorium on new SBLC licenses and would allow FinTech firms to participate in the 7(a) lending program. 

My efforts to expand access to capital aren’t limited to just minorities or low-income Americans. Last year, I introduced H.R. 8660 - The Post 9/11 Veteran Business Acceleration Act, and this year, I am proud to have cosponsored H.R. 903 - The Veterans Entrepreneurship Act, introduced by Rep. Ben Cline of Virginia. Both pieces of legislation open-up the post 9/11 educational assistance program to allow qualified veterans to utilize these financial benefits. Qualifying veteran applicants can utilize this money to start or operate a small business in lieu of educational assistance. By providing alternatives to college, more opportunities are created for veterans to transition back into civilian life, create financial stability and build generational wealth.   

I believe in our nation, and I believe in the dynamic, industrious, and relentless spirit of the American people. Increased access to capital, bolsters the American Dream for all and I remain steadfast in my advocacy to make available the necessary tools for the American people to thrive and prosper.