Dozens of small business owners from across the United States, including five from Pennsylvania, gathered in Washington, D.C. on Tuesday, urging policymakers and the Federal Reserve to reconsider the proposed Basel III Endgame regulation. The small business representatives argue that this new rule would increase the cost of accessing capital, such as business loans or lines of credit.
During their visit, the small business owners held meetings with over 40 lawmakers and senior officials at the Federal Reserve, emphasizing the potential negative impact of the proposed regulation on small businesses. They also submitted a comment letter signed by more than 3,000 small business owners nationwide, including 166 from Pennsylvania.
The Pennsylvania delegation included Ben Johnson from Freya Systems, Media; Heather Kniess from Shiny Happy Cleaners, Pittsburgh; Kevin Lewis from Premisien, Inc., Philadelphia; Marc Domingos from Movers For Me, Mechanicsburg; and Silvia Lucci from LUHV FOOD, Hatboro.
Kevin Lewis, owner of Premisien in Philadelphia, stated, “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. We are asking the lawmakers and the Federal Reserve to abandon this proposed regulation and instead partner with us to remain competitive and forward-leaning.”
Accessing necessary capital for growth has become increasingly challenging for small businesses as interest rates have soared to 20-year highs and lending has tightened due to the Federal Reserve’s efforts to curb inflation and reduce demand.
A recent survey conducted by Goldman Sachs 10,000 Small Businesses Voices revealed that 78% of small business owners are concerned about their ability to access capital, a significant increase from April 2022 when 77% were confident about credit. Only 29% of small business owners currently believe they can afford to take out a loan given current interest rates.
If access to capital continues to tighten, 67% of respondents said they would have to halt expansion plans, 42% would need to lay off workers or stop hiring, and 21% may have to close their businesses. Nearly one-in-three (31%) cited 2023 as being their most challenging year over the past four years, a close second to the height of the pandemic in 2020 (37%).
The survey also found that 87% of small business owners believe it is important for their elected officials in Washington to weigh in with the Federal Reserve regarding the impact of new bank capital requirements.
For more information on the Tell the Fed to Stop the Squeeze on Small Business campaign, visit the official 10,000 Small Businesses Voices website.
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