Sec. 502. Findings
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Congress finds that— capital access remains one of the largest barriers to overcome for socially and economically disadvantaged business owners as well as for the smallest small businesses; according to the Double Jeopardy: COVID–19’s Concentrated Health and Wealth Effects in Black Communities study conducted by the Federal Reserve banks, in 2020— firms owned by people of color are more likely to have weak capitalizations, limited bank relationships, and little in cash reserves; and 51 percent of Black-owned businesses have less than 3 months of cash reserves in case of an emergency, which is nearly 7 percentage points higher than their peers; according to the Small Business Credit Survey conducted by the Federal Reserve banks, in 2021— 31 percent of firms that sought financing received the full financing sought by the firm; firms owned by people of color were least likely to receive the full amount of financing sought by the firm, with 15 percent of Asian-owned businesses, 16 percent of Black-owned businesses, and 19 percent of Hispanic-owned businesses receiving full financing, as opposed to 35 percent of non-Hispanic White-owned businesses receiving full financing; and firms with fewer employees were also least likely to receive the full financing sought by the firm, with 23 percent of businesses with 1 to 4 employees and 37 percent of businesses with 5 to 49 employees receiving full financing, as opposed to 55 percent of businesses with 50 to 499 employees receiving full financing; the Community Advantage Pilot Program of the Administration has helped increase lending backed by the Administration to firms owned by people of color, women, and veterans and firms classified as startups; from fiscal year 2018 to fiscal year 2022— 13 percent of loans under the Community Advantage Pilot Program went to Black business owners, while 4 percent of loans under the loan program under section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) ) (in this section referred to as the 7(a) loan program ) went to Black business owners; 15 percent of loans under the Community Advantage Pilot Program went to Hispanic business owners, while 8 percent of loans under the 7(a) loan program went to Hispanic business owners; 20 percent of loans under the Community Advantage Pilot Program went to women business owners, while 17 percent of loans under the 7(a) loan program went to women business owners; and 9 percent of loans under the Community Advantage Pilot Program went to veteran business owners, while 5 percent of loans under the 7(a) loan program went to veteran business owners; and from fiscal year 2020 to fiscal year 2021, 14 percent of loans under the Community Advantage Pilot Program went to startup business owners, while 7 percent of loans under the 7(a) loan program went to startup business owners.
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