Protect Access To Credit For Small Business

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Published on June 28, 2024, 12:29 pm
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When I think about the factors that have been crucial to the beginnings and growth of our small business, the support of our community of family, friends, and neighbors in the Bronx is at the top of the list. Access to credit was also crucial to us in the early days; as a Black-owned business, we had challenges securing traditional loans at the outset of our entrepreneurial journey. 

That is why I am concerned about a bill being pushed in the U.S. Senate that would fundamentally alter the credit card market, putting hurdles in front of up-and-coming and existing small businesses like ours.

In the early days of Sol Cacao, we used credit cards to purchase equipment, supplies, and inventory. We were also able to manage cash flow by utilizing flexible payment terms and reward programs, allowing us to reinvest profits back into the business. This financial flexibility was crucial for Sol Cacao’s growth, especially during the unpredictable times of the pandemic. When the world shut down, our business pivoted to online sales. By offering electronic payment options, we were able to continue processing transactions that were easy, convenient, and safe, during what was otherwise a tremendously difficult time for small businesses.

Small businesses like mine need policies that can help us build on our success. There are a few reasons why I am concerned about the Durbin-Marshall bill being pushed in the Senate. 

First, the legislation could tighten funding that banks and credit unions use to extend loans to small businesses. This means that banks and credit unions would have to raise interest rates and make credit less accessible to small businesses, making it harder to start a business. 

The bill would also put at risk the rewards programs that many of us use to fund business expenses. If the Durbin-Marshall bill becomes law, University of Miami research predicts that small businesses will lose $1 billion in rewards. That could make all the difference for small businesses.

Finally, by introducing less secure payment networks to the equation, this bill could make the payments system more vulnerable to scam attempts and data breaches. Small businesses are especially vulnerable to cyberattacks and fraud, so we need strong security to protect our businesses and our customers.

Congress should focus on ways to better support small businesses instead of pushing legislation that would upend what we rely on — like access to capital, credit card rewards, and hassle-free payment options for our customers.

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About Daniel Maloney

Daniel Maloney and his brothers own Sol Cacao, an artisan “bean to bar” chocolate manufacturer that crafts single origin chocolate bars in the South Bronx.

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Featured image credit: DepositPhotos.com

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Jonas Bronck is the pseudonym under which we publish and manage the content and operations of The Bronx Daily.™ | Bronx.com - the largest daily news publication in the borough of "the" Bronx with over 1.5 million annual readers. Publishing under the alias Jonas Bronck is our humble way of paying tribute to the person, whose name lives on in the name of our beloved borough.