Congressman Carson Reintroduces Emerging Business Encouragement Act
WASHINGTON, DC – Today, Congressman André Carson reintroduced the Emerging Business Encouragement (EBE) Act, which designates and provides unique assistance to startup businesses.
“While efforts made over the last several years have our economy back on track, we cannot sit back and relax. New businesses still face significant obstacles and many people are still struggling to find good paying, stable jobs,” said Congressman Carson. “My Emerging Business Encouragement Act seeks to help startups overcome some of the unique challenges they face during their first few years. By helping emerging businesses access capital and lucrative government contracts, this bill will help them gain a foothold in the market, create jobs, and begin contributing to the local economy.”
Background on the Emerging Business Encouragement (EBE) Act
Emerging businesses face obstacles that are distinctly different from more well established small businesses. Under the EBE Act, the Small Business Administration (SBA) would create a new designation for an Emerging Business Enterprises (EBE) based on the company’s age, size and total compensation.
To be certified as an EBE, a company must be 10 percent or less the size of the current SBA designation for a small business, which is typically capped at 500 employees. The company must be less than five years old at the time of certification with annual compensation of individuals in management positions not exceeding 200 percent of the annual mean wage for “Management Occupations” defined by the U.S. Department of Labor. These standards will ensure that those businesses benefiting from EBE programs are truly emerging.
Emerging businesses often have trouble securing federal contracts. The EBE Act seeks to expand opportunities by requiring federal agencies to set a 3% contracting goals for EBE contracts and subcontracts.
Additionally, many emerging businesses have difficulty accessing the capital they need to develop products and hire workers. Under the EBE Act, the lenders would be incentivized to lend to EBE businesses by waiving fees paid under the SBA’s 7(a) Loan Program.
This bill has been endorsed by the National Black Chamber of Commerce and U.S. Hispanic Chamber of Commerce. Their endorsements acknowledge the unique difficulty minority businesses have in accessing the capital and contracts needed to grow past the startup phase. This bill will help minority businesses overcome these obstacles, which in turn will grow businesses and create more jobs in minority communities.