A bipartisan group comprising U.S. Sens. Chris Coons, D-Del. and Tim Scott, R-SC, and Reps. Jason Crow, D-Colo., and Troy Balderson, R-Ohio, has introduced The Next Generation Entrepreneur Corps Act to spur new business and job creation in underserved communities by starting a competitive fellowship for entrepreneurs. With a five-year investment of $368 million, the bill will identify talented entrepreneurs through a national competition and directly support the creation of more than 320 new businesses each year.
During this crisis, small businesses are struggling to return to pre-pandemic levels, with hundreds of thousands of businesses permanently closed.
Even before the public health crisis, entrepreneurs faced substantial barriers to success. Most would-be entrepreneurs have limited access to capital, and this problem is worse for minorities, who are twice as likely to be denied loans, more likely to receive lower loan amounts, and pay higher interest rates than their white peers. These barriers to entry are also stark in low-income areas, where there are proportionally fewer self-employed workers and small businesses.
Under The Next Generation Entrepreneur Corps Act, a selection committee of 12 industry experts will review applications and select 320 entrepreneur fellows annually from diverse backgrounds to start both traditional and high growth-potential businesses in distressed, low-income census tract areas. The program will also set forth a framework to expand the number of fellows selected annually for greater impact.
“Creating opportunities for business growth in a post-COVID-19 economy will be necessary to regain the 10 million jobs still missing due to the pandemic,” Coons said. “New businesses account for nearly a third of total job creation each year. We must ensure that entrepreneurs can act on their innovative ideas in the places that need them the most. We need a range of bold new approaches to rebuild Main Street America in distressed communities, and the Next Generation Entrepreneur Corps should be part of this effort.”
“As a former business owner and entrepreneur, I understand the challenges that come with starting a business,” said Scott. “Small businesses are the backbone of the American economy, and it’s important that we continue to spur economic development. The Next Generation Entrepreneur Corps Act is a great avenue to help encourage small business creation in [underserved] communities. I look forward to my Senate colleagues supporting this legislation.”
“As our country works to rebuild from the pandemic, we need to make sure we are supporting the next generation of entrepreneurs. These men and women have the ingenuity, resourcefulness, and grit to make sure we are rebuilding and revitalizing our communities during this critical time,” said Crow.
“It’s critical now more than ever our country identifies and uplifts the next generation of entrepreneurs – including those in my home state of Ohio,” said Balderson. “The skills and talent these individuals bring to the table will help fuel America’s economic recovery. We just need to ensure they have the right resources at their disposal.”
The United States has national fellowships to attract the next generation of talent to public schools, international development work and public service. Now, with nearly 75 percent of small businesses experiencing a negative impact from COVID-19, the Next Generation Entrepreneur Corps Act seeks to invest in a new wave of talent to rebuild Main Street.
The Next Generation Entrepreneur Corps Act will:
- Create a competitive fellowship program.
- Provide healthcare, living expenses, and student loan support. Fellows will receive a $120,000 two-year stipend for living and basic startup expenses, healthcare, and interest-free federal student loan deferral for two years.
- Provide mentorship and networking opportunities. Fellows will receive immersive training, be matched with a local business mentor, and access support from an advisory board of CEOs and venture capitalists.
- Partner with the Small Business Administration 8(a) Small Business Development program. This SBA program currently helps socially and economically disadvantaged entrepreneurs gain access to government contracting. Through this program, fellows will be provided a fast track to apply for 8(a) certification, and fellows with 8(a)-eligible businesses will be matched with mentors via the 8(a) Mentor Protégé program.
- Provide access to capital. Fellows will connect with investors and SBA-backed lenders, and receive fast-track access to credit. A $30 million fund will encourage equity investment in corps members’ businesses.
- Be available to transitioning business owners, new entrepreneurs and previous business owners who have lost their business due to the public health crisis, but currently lack the resources or capital to start another venture.