- March 28, 2019
- Posted by: matt
- Category: Blog
I’m not sure that access to capital is the number one problem facing small business today, but it clearly serves as one factor that contributes to lower business start-up rates, more business failures, and slower small business. That’s why I’m pleased to see that Third Way, a newish DC-based think tank, is pitching a big idea that they are calling the Opportunity Bank.  The Opportunity Bank is a proposed trillion dollar funding pool (over ten years) that would update and supercharge the US Small Business Administration’s (SBA) 7a loan program, which currently serves as one of the largest sources of debt capital for small business. The 7a loan program is popular, but it falls far short of meeting current needs. The Third Way report hits this issue hard, noting recent Fed research showing that many firms fail to even pursue loans due to bureaucratic burdens and fear of rejection.  The Opportunity Bank would increase lending via more funds for lending, reduced administrative fees, and other tweaks to increase both interest in and use of these loan programs. This is an interesting concept and a hopeful sign that new ideas for supporting small business may get a hearing in DC and beyond.