On Thursday, September 9, the House Small Business Committee passed a $25 billion bill that would provide funding and assistance to small businesses. Included in this bill is a $500 million pilot program for worker and consumer cooperatives to access SBA loan products without the requirement of a personal or entity guarantee.
“Small businesses are the foundation of our economy and ultimately the key to our nation making a full economic recovery,” said Chairwoman Nydia Velázquez (D-NY-7). “The small business policies that we advanced today represent a generational investment in America’s entrepreneurs and will help businesses recover from COVID now and prosper in the future. That’s why Congress and the Biden administration must continue moving forward with the Build Back Better agenda and pass this legislation.”
The cooperative community has long advocated for equitable access to SBA capital. The pilot program, modeled on the Small Business Administration’s 7(a) program, will provide loan guarantees to eligible small business cooperatives for activities including short- and long-term working capital; purchasing equipment and materials; purchasing, constructing or renovating real estate and buildings; and expanding existing business.
“NCBA CLUSA thanks Chairwoman Velázquez for her continued support of cooperative businesses,” said Doug O’Brien, president and CEO of the National Cooperative Business Association CLUSA International (NCBA CLUSA). “Co-ops are a tested model for building a more resilient, inclusive and sustainable economy. The Co-op Lending Pilot Program will be critical to ensuring more people can use the cooperative business model to recover from the impacts of COVID-19 by supporting community-owned businesses.”
This pilot program, which will depend on community financial institutions to administer the loans, also has the support of the National Cooperative Bank. “National Cooperative Bank thanks Chairwoman Velázquez for her support of small business cooperatives. This bill will increase access to capital for this vital business segment that helps create jobs and fuel local economies,” said Chuck Snyder, chairman and CEO of National Cooperative Bank.
The bill now returns to the House Budget Committee to be included in the larger Build Back Better Act before being considered by the full House of Representatives and then the Senate.