Minority business development agency elevated to permanent status

“President Biden has made clear his commitment to not just rebuilding to how things were before COVID-19, but to building back better and more equitably. The Minority Business Development Agency is ready to step into this historic moment and build on its success – because we recognize that America’s road to recovery runs through our minority business community. Making MBDA a statutory Agency provides MBDA with the authorities, workforce and resources needed to help level the playing field on behalf of minority businesses and minority entrepreneurs.”

 – U.S. Secretary of Commerce Gina Raimondo

After more than 50 years, the Minority Business Development Agency has been made permanent, its director has been elevated to Under Secretary of Commerce, and new tools and authority will allow the agency to address the longstanding economic inequities that face our nation’s 9 million business owners of color.

These long-awaited historic provisions are part of the Bipartisan Infrastructure Investment and Jobs Act, signed by President Biden earlier this month.

The expansion and elevation of MBDA is of special interest to the National Urban League, not only because Black entrepreneurship and business ownership are at the heart of our mission. Robert J. Brown, Vice Chair of the National Urban League Board of Trustees, created and developed the agency – then known as  Office of Minority Business Enterprise – while serving as Special Assistant to President Richard Nixon in 1969.

“We must also provide an expanded opportunity to participate in the free enterprise system at all levels – not only to share the economic benefits of the free enterprise system more broadly, but also to encourage pride, dignity, and a sense of independence,” President Nixon said upon signing the Executive Order creating the agency.  “In order to do this, we need to remove commercial obstacles which have too often stood in the way of minority group members – obstacles such as the unavailability of credit, insurance, and technical assistance.”

During the COVID-19 pandemic, Black-owned businesses shuttered at twice the rate of White-owned businesses, and were largely excluded from relief that was distributed as part of Congress’s stimulus bills.

Even before the pandemic, Black and Latino Americans owned fewer than 10 percent of small businesses with employees, despite making up 30 percent of the nation’s population.

The landmark Infrastructure Investment and Jobs Act includes the following provisions:

• Expands the geographic reach of the MBDA by authorizing the creation of regional MBDA offices, rural business centers, and increasing the number and scope of existing programs.
• Creates a presidentially appointed and Senate-confirmed Under Secretary of Commerce for Minority Business Development to lead the agency.
• Increases the MBDA’s grant-making capacity to partner with community and national nonprofits engaged in private and public sector development as well as research.
• Mandates the creation of the Parren J. Mitchel Entrepreneurship Education Grants Program to cultivate the next generation of minority entrepreneurs on the campuses HBCUs and MSIs across the Nation.
• Creates a council to advise the Under Secretary on supporting MBEs; and Authorizes the Under Secretary to coordinate federal MBE programs.

“This legislation is transformative and signifies a new era in minority business development and progress toward addressing the long-standing racial disparities in access to capital, contracts, and business ecosystems,” U.S. Department of Commerce Deputy Secretary Don Graves said.

The National Urban League and our network of 91 affiliates have counseled, mentored, and trained more than 60,000 business owners over the last decade and a half; we look forward to expanding and enhancing our work with the partnership of the revitalized MBDA.