Cannabis-related businesses, especially those from disadvantaged communities, would be eligible to get loans backed by the federal Small Business Administration for the first time under proposed legislation.
The bill – introduced by U.S. House Small Business Committee chair Nydia Velázquez – comes just a week after her panel heard industry advocates urge Congress to extend small-business financial assistance programs to marijuana-related companies.
The bill, Ensuring Safe Capital Access for All Small Business Act of 2019, would enable direct and indirect cannabis firms to be eligible for SBA-backed assistance such as microloans and loan guarantees.
Such programs are designed for borrowers who have difficulty accessing credit from conventional banking sources. The maximum loan amount from the SBA is $5 million. The total SBA guarantee for any one borrower may not exceed $3.75 million, according to the SBA’s website.
“I’ve authored legislation to let disadvantaged entrepreneurs in this space access SBA loans. We must ensure women, people of color and others in this new market secure financing,” Velázquez, a Democrat from New York, tweeted Friday.
Two other small business-related federal bills also were introduced:
- Ensuring Access to Counseling and Training Programs for All Small Business Act, by Rep. Jared Golden, a Maine Democrat. The bill would prohibit SBA resource partners such as the Small Business Development Centers from withholding services just because a business is cannabis-related.
- Grants would be provided to state and local governments to help small businesses with cannabis licensing and other challenges under the Homegrown Act, sponsored by Rep. Dwight Evans, a Pennsylvania Democrat.
Jeff Smith can be reached at [email protected]