WASHINGTON, November 14, 2023 – Dozens of small business owners from across the country are descending on Washington, D.C. today with a clear message for policymakers and the Federal Reserve: Stop the Squeeze on Small Business. The mobilization of small business owners comes as the Federal Reserve is considering a new regulation, called Basel III Endgame, which the Federal Reserve acknowledges would increase the cost of accessing capital – like a business loan or a business line of credit.
While in Washington, small business owners are meeting with more than 40 lawmakers and senior officials at the Federal Reserve to share the negative impact the proposed regulation would have on small business owners and are formally submitting a comment letter signed by more than 3,000 small business owners from across the nation.
“Small business owners are traveling to Washington because the Federal Reserve’s Basel III Endgame regulation will make it more expensive for banks to lend to small businesses, and those added costs will no doubt be passed on to us,” said Jessica Johnson-Cope, Chair of Goldman Sachs 10,000 Small Businesses Voices National Leadership Council and CEO & President of Johnson Security Bureau in The Bronx, NY. “Affordable lending is critical to the success of American small businesses because we use this capital to fund business operations and expansions across the nation. Banks often treat small businesses as risky borrowers. We believe this proposal will make capital inaccessible due to unaffordable borrowing costs. We are asking the lawmakers and the Federal Reserve to abandon this proposed regulation and to instead partner with us to identify regulations that allow us all to remain competitive and forward-leaning.”
For many small businesses, accessing the necessary capital to grow and scale their business has never been more difficult. Interest rates have jumped at a record pace to 20-year highs and lending has tightened in the Federal Reserve’s ongoing effort to curb inflation and reduce demand.
In surveys of small business owners conducted by Goldman Sachs 10,000 Small Businesses Voices since 2020, small business owners have consistently stated that access to capital is one of their top challenges. The most recent survey of small business owners, conducted last month, found that:
For more information on the Tell the Fed to Stop the Squeeze on Small Business campaign, please visit https://www.goldmansachs.com/citizenship/10000-small-businesses/US/voices/basel-iii-endgame/index.html
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Background on Basel III Endgame
Since Goldman Sachs 10,000 Small Businesses Voices launched in 2020, small business owners have consistently stated that accessing capital is one of the biggest challenges they face, which led 10,000 Small Businesses Voices to partner with the Bipartisan Policy Center to produce three policy reports to address small business financing gaps and modernize the Small Business Administration (SBA).
In July 2023, US regulators proposed the Basel III Endgame rule, which will require large banks and most regional banks to further increase the amount of capital they hold by an estimated 20% on average. This rule will have a negative impact on households and businesses seeking capital, including:
About 10,000 Small Businesses Voices
Goldman Sachs 10,000 Small Businesses Voices, which in April marked its three-year anniversary, builds on Goldman Sachs 10,000 Small Businesses and organizes program participants to advocate for policies that matter to them. Learn more at www.gs.com/10ksb-voices
About Goldman Sachs 10,000 Small Businesses
Goldman Sachs 10,000 Small Businesses is an investment to help entrepreneurs create jobs and economic opportunity by providing a comprehensive business education program and access to capital and business support services. To date, 10,000 Small Businesses has served over 14,000 small businesses across the United States. The program has reached businesses from all 50 states, Puerto Rico, and Washington, D.C. Learn more at www.gs.com/10ksb.
About Goldman Sachs
The Goldman Sachs Group, Inc. is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.
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