Sen. Hickenlooper introduces 4 bills aimed at helping small businesses across Colorado

COLORADO (KRDO) - U.S. Senator John Hickenlooper (D-Colorado), a member of the Senate Small Business Committee, says he's passionate about bringing change for minority entrepreneurs, so he's helping introduce new legislation to help small businesses across the state.

Sen. Hickenlooper is no stranger to small businesses, as he knows the struggle of trying to obtain a loan. After getting turned down by 33 banks, it was The Women's Bank, a bank that supports women and others turned down by traditional vendors, who lent him the loan to open Wynkoop Brewing Company in 1988.

It's a reason why he is passionate about making it easier for small business and minorities to get on board.

"In small businesses, one of the things that they desperately need is the need to be able to access capital and some of the federal programs to help them," Hickenlooper said. "We as a country want to make sure that women and minority owned-business and businesses owned by veterans, that they get their fair share, just like mainstream businesses do."

These four bills are aim to expand capital for those who are looking to reduce their energy consumption for their business, help Native Americans who have small businesses be able to access capital more easily, dramatically expand SBIC, small business investment companies, to include more people of color and rural entrepreneurs.

"We want to make sure we can expand those SBIC's, once you expand and have more diversity in who is running those companies, you are going to expand the diversity of who they give loans to," added Hickenlooper.

The four bills:

1. MicroCapSBIC Designation

The SBA operates the Small Business Investment Company (SBIC) program, which was established to improve small businesses' access to capital and help them grow. To participate, investment companies' firms must be licensed with the SBA.

As of now, white men control 93% of venture capital funding and a majority of the venture capital is invested in Boston, New York City, and Silicon Valley.

According to Sen. Hickenlooper, less than 1% of these funds go to companies with Black entrepreneurs and only 2% to Latino business owners. With this bill, Sen. Hickenlooper would aim to create a new "MicroCapSBIC" entry-level license within the existing SBIC program that would expand who is eligible to be an investment manager to help small businesses grow by giving them access to capital. Grow the number of small funds in underserved communities. More specifically, the bill would authorize the SBA to create a MicroCap Small Business Investment Company license that will allow qualified underrepresented investment managers to participate in the program.

Managers would not need to have prior experience, but they must prove to be a business expertise and have a track record of successful business management.

MicroSBIC's would be required to invest at least half of their capital in "smaller enterprises" and a quarter in rural and underserved communities and important sectors like manufacturing.

2. SBA Office of Native American Affairs (ONAA) Enhancement and Modernization Act

Increasing funding for the SBA’s Office of Native American Affairs and creating an Associate Administrator position to set direction. The bill would create an Associate Administrator to carry out effective Native American Outreach programs. The Associate Administrator would be in charge of promoting policies, programs and assist with capital access, business development and attending to the needs of tribes and native businesses. Also would aim to double their funding.

3. Capital for Cooperatives Act
Cooperatives are businesses organized, owned, and governed by the people that use them. There are 30,000 U.S. cooperatives operate at 73,000 locations throughout the U.S., generating over $500 billion in revenue and providing over $25 billion in wages, according to Hickenlooper's team.
As of now, Cooperatives' unique one-member, one-vote structure stops them from being eligible for the SBA’s primary business loan program because cooperatives are not able to provide a personal guarantee, a requirement of the 7a loan program.

With this bill, Hickenlooper aims to fix this technical barrier by amending criteria for cooperative businesses to qualify for these loan guarantees.

Under the bill, SBA would be able to consider documented proof of a co-op borrower’s ability to repay the loan based on equity, cash flow, and profitability to determine lending criteria.

The bill would also allow SBA to establish new lending criteria for cooperatives as long as they are not based on personal or entity guarantees by the member-owners.

4.Green Energy Loan Enhancement Act

This act would further incentivize small businesses to make energy-efficient investments.
According to Hickenlooper and his team, the SBA 504 loan program provides long-term, fixed-rate financing for businesses to expand. The program incentivizes energy-efficient investments by allowing businesses who are looking to make such investments qualify for a larger loan - $500,000 more than the cap for non-energy efficient investments, which is $5 million. With this bill, Hickenlooper would aim to double the loan amount for business making energy-efficient upgrades up to $10 million dollars.

Eligible projects must either reduce the business’ energy consumption by at least 10% or generate more than 15% of the energy used by the applicant at the project facility (e.g. wind, solar, or geothermal energy sources).