Legislation has been reintroduced in the USA seeking to ensure certain loan programs of the Small Business Administration are made available to legitimate cannabis-related businesses and service providers.
While the SBA doesn’t lend money directly to small business owners, it sets guidelines for loans made by its partners. This reduces their risk and makes it easier for them to access capital, which in turn makes it easier for small businesses to get loans.
SBA loans are currently unavailable to those in the cannabis sector who are operating legally – but there are moves to change this.
The Ensuring Safe Capital Access for All Small Businesses Act of 2021 introduced by House Small Business Committee Chairwoman Nydia M. Velázquez yesterday would give small firms legally operating in the cannabis industry access to several SBA programs:
- the 7(a) loan guaranty program
- disaster assistance
- the Microloan program
- the Small Business Investment Company program
- the 504 loan program.
“This legislation will spark growth by extending affordable capital to small firms in the cannabis space,” said Chairwoman Velázquez. “Simultaneously, the bill acknowledges the structural disadvantages facing entrepreneurs of color and seeks to level the playing field.”
The full text of the Act can be found here.
In December last year, the House passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act of 2020, which contained a provision championed by Chairwoman Velázquez that would enable Small Business Administration loans and services be made available to entities that are cannabis-related legitimate businesses or service providers.
“For too long, outdated federal laws have kept small businesses operating in this legal and legitimate industry unable to access federal lending programs,” said Chairwoman Velázquez at the time.
Other SBA/cannabis related legislation introduced yesterday was Rep. Dwight Evans’ H.R. 2649, the Homegrown Act of 2021, which would establish an SBA grant program providing state and local governments funding to help small businesses navigate cannabis licensing and employment.
Additionally, Rep. Jared Golden introduced H.R. 2652, the Ensuring Access to Counseling and Training Programs for All Small Business Act of 2021. This would forbid SBA resource partners from not providing qualified small businesses their services solely on the basis they operate in the cannabis sector.