July 30, 2020--The Small Business Lending Disclosure and Broker Regulation Act introduced today by Rep. Nydia Velazquez provides small businesses with much-needed protections from predatory lending--an issue that is becoming ever more urgent as business owners grow more desperate to keep their doors open during the economic fallout of Covid-19.

The Act would extend protections in the federal Truth in Lending Act--which requires lenders to make common-sense disclosures of costs and terms in clear language to consumers--to small business owners. This will allow small business owners to understand the full cost of financing, compare options and make informed financial decisions. It’s astounding that these protections have not been extended to the nation’s small businesses already and we urge our lawmakers to pass this legislation swiftly.

Many underserved entrepreneurs have been left behind by federal small business aid programs and traditional lenders are tightening up their lending activities. This is a potential recipe for disaster as small business owners may seek alternative sources of funding from lenders who do not disclose interest rates, terms or fees. Creating protections from predatory loans by ensuring access to clear financing terms will be crucial to giving these small business owners a chance to survive and recover. We need a strong small business sector to have a strong economy. This bill goes a long way at giving Main Street entrepreneurs the information they need to make informed financial decisions that will allow them to survive and rebuild.