Making a call to honorable Ben Cardin


The Honorable Ben Cardin
United States Senate
509 Hart Senate Office Building
Washington, DC 20510

Dear Senator Cardin:

I write to you on behalf of the United States Minority Chamber of Commerce (U.S. MCC), a non-partisan, non-profit organization with over 25,000 stakeholder companies and partners, predominantly small- and medium-sized businesses. Recognized nationally and internationally by the United States Departments of Defense and Energy, US AID, the World Bank and the United Nations, we work to promote, maintain and sustain economic growth and progress for minority-owned business enterprises.

On behalf of our member organizations, we wanted to express our deep concern about new, proposed regulations that would undermine minority small business access to the financing they need to grow and serve their communities. New proposed rules from the Small Businesses Administration (SBA) seek to restrict sub-$350,000 7(a) loans by arbitrarily reducing the already-reasonable existing fee caps for referral and packaging agents and also by prohibiting agents from serving both the small business and the lender in the loan process.

Referral and packaging agents exist as intermediaries to help small businesses like our members gain access to affordable capital under $350,000, often after they have already been turned down by a bank. These new rules threaten to force agents and lenders out of the market, particularly for the kinds of small-dollar loans that many minority-owned small businesses need but are often hard to come by. If the proposed rule goes into place, Maryland’s minority-owned small businesses could either be forced to pay substantially higher rates or lose access to capital altogether.

Minority-owned companies in Maryland and across the country already face increasing barriers to the credit they need. The SBA itself said that the major constraint limiting small businesses owned by minorities is inadequate capital and a lack of access to public funds. Despite the number of minority-owned small businesses growing at 10 times the national average between 2007 and 2017, the U.S. Department of Commerce Minority Business Development Agency found that minority small businesses are less likely to receive approval for loans, receive approval for smaller loan amounts, and are saddled with higher interest rates for business loans than their non-minority counterparts. As a result, minority firms are less likely to apply for loans in the first place, due to fears of rejection.

This makes the sub-$350,000 SBA-backed market even more important for minority-owned small businesses. Referral and packaging services are a key way to connect companies to loans and do so with a knowledgeable partner agent who can help secure the lowest rate.

We urge you to tell the SBA to reject this misguided rule.  It is already hard enough for minority small businesses like our members in Maryland and across the country to gain access to the funding they need to launch, grow, or even just maintain their businesses. Referral and packaging services are an indispensable resource for small businesses and for banks, and they help enable the sub-$350,000 SBA loan market.

Please do not let this misguided rule undermine the ability of minority-owned small businesses secure the funding they need to pursue their American dream.


Thank you,

Doug Mayorga

Founder and CEO, U.S. Minority Chamber of Commerce

[email protected]