Sens. Tim Scott, R-S.C., Chris Coons, D-Del., and Reps. Jason Crow, D-Colo., and Troy Balderson, R-Ohio, introduced an act Wednesday that pushes a five-year $368 million investment to entrepreneurs from underserved communities selected through a national competition.
Called the Next Generation Entrepreneur Corps Act (.pdf), the bill is intended to directly support the creation of 320 new businesses each year, according to a news release, and help entrepreneurs have access to capital they might not otherwise have.
Barriers to capital access have only risen during the COVID-19 pandemic and minority groups in particular wrestle with being twice as likely to be denied loans and often pay higher interest rates than peers, according to the release.
"As a former business owner and entrepreneur, I understand the challenges that come with starting a business," Scott said in the release. "Small businesses are the backbone of the American economy, and it’s important that we continue to spur economic development. I created my Opportunity Agenda to help create hope in underserved communities, and the Next Generation Entrepreneur Corps Act is a great avenue to help encourage small business creation in those communities. I look forward to my Senate colleagues supporting this legislation."
The act would gather a selection committee of 12 industry experts to review applications for the program and select 320 entrepreneur fellows annually from diverse backgrounds to jump start traditional and high-growth-potential businesses in distressed, low-income census tract areas, according to the release. The program would extend financial support for health care, living expenses and student loans covered by a $120,000 two-year stipend for living and basic startup expenses.
Fellows will also receive immersive training, be matched with a local business mentor and access support from an advisory board of CEOs and venture capitalists, according to the release. The Small Business Administration also will step in to help these entrepreneurs gain access to government contracting and lenders. A $30 million fund will be used to stimulate equity investment in fellows’ businesses among other lenders.
"Creating opportunities for business growth in a post-COVID-19 economy will be necessary to regain the 10 million jobs still missing due to the pandemic," Coons said in the release. "New businesses account for nearly a third of total job creation each year. We must ensure that entrepreneurs can act on their innovative ideas in the places that need them the most. We need a range of bold new approaches to rebuild Main Street America in distressed communities, and the Next Generation Entrepreneur Corps should be part of this effort."