News Column

Congressman Carson introduces Emerging Business Encouragement Act

June 17, 2014

WASHINGTON, June 17 -- Rep. Andre Carson, D-Ind. (7th CD), has issued the following news release:

Today, Congressman Andre Carson introduced the Emerging Business Encouragement (EBE) Act, which will help emerging businesses compete for federal contracts and obtain access to federally backed loans as they get off the ground.

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 contracting goals for EBEs equal to or not less than 5 percent of 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 percentage of federal loan guaranty authority for SBA loans would increase from 50 percent for all small businesses to 65 percent for EBEs, providing a significant incentive for lenders to lend to these businesses.

"I believe we must support all job creators as our economy continues to recover, but there are significant differences between a startup with only a few employees and an established business with a few hundred employees and decades of experience," Carson said. "This legislation will help these emerging businesses overcome the unique challenges they face in their first few years of operation, and it will ensure these businesses are able to compete for federal contracts and gain access to critical small business loans."

This legislation will:

* Create a new designation for Emerging Business Enterprises, similar to those already in place for women and minority owned businesses.

* Establish a 5 percent federal contracting goal for Emerging Business Enterprises.

* Amend the SBA Express program under the Small Business Act to provide incentives for financial institutions to lend to Emerging Business Enterprises.

* Have a negligible impact on direct spending, as determined by the Congressional Budget Office.

Click here for a fact sheet with additional details about the Emerging Business Encouragement Act.

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Source: Targeted News Service

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