Chairman Williams: “Unleashing Main Street’s Potential: Examining Avenues to Capital Access”

WASHINGTON, D.C. – Today, the House Committee on Small Business is holding a full committee hearing titled “Unleashing Main Street’s Potential: Examining Avenue’s to Capital Access.”

Chairman Williams’ opening statement as prepared for delivery:

Good morning, and welcome to today’s hearing that will focus on finding solutions for entrepreneurs to more easily access capital so they can grow their businesses.

I’d like to start off by thanking all our witnesses for being with us today. We know you could be focusing on your core business operations, and we greatly appreciate your attendance and input.

Small businesses are the backbone of our communities and the engines of growth for our economy. Our nation’s job creators have faced many challenges over the past few years, from labor shortages to crippling inflation, yet still prevailed. While our business owners continue to face and overcome never-ending hurdles, as this Committee heard prior, access to capital remains a top concern for Main Street.

For a business to get off the ground, small business owners must invest their time and financial resources. For most entrepreneurs, this means going to the bank to secure a loan. This capital provides them with the resources needed to compete in the marketplace and contribute to the American economy.

Unfortunately, high interest rates and tightening lending standards are a significant barrier to growth for Main Street. We know American entrepreneurs who are just starting their journeys and have little credit history will be subjected to sky-high interest rates under the current economic headwinds.

As interest rates remain high, the federal government should be looking at other barriers that are making it more expensive to lend money to Main Street America. However, there is a proposal making its way through the Federal Reserve System that will do the exact opposite. I am of course speaking of the proposed Basel 3 capital requirements. If implemented, this rule would require banks to hold more of their capital on the sidelines rather than lend it out to small businesses. This would harm small businesses with thin credit histories the most if this is implemented. Main Street has been playing defense since this Administration came into office, and this rule would only serve to make matters worse.

For some businesses, they do not want to go to a bank and take on debt. These start-ups may turn to venture capital funds, which invest capital in exchange for equity in the business. This is a risky undertaking for the venture capitalist betting on a business’s success, but this type of financial agreement helped build some of the most successful businesses of our time.

Despite these tough economic headwinds, Main Street is still finding ways to thrive – just as it always does. We on this Committee are focused on ensuring our nation’s small businesses have a fighting chance, and I’m very much looking forward to today’s discussion.

With that, I will yield to our distinguished Ranking Member from New York, Ms. Velasquez.

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