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Mr. CARSON. Mr. Speaker, today I am reintroducing the Emerging Business Encouragement Act which will give new small businesses a more equal playing field to secure federal contracts.
Emerging businesses face obstacles that are distinctly different from more well-established small businesses. Under the Emerging Business Act, the Small Business Administration would create a new designation for an Emerging Business Enterprises based on the company's age, size and total compensation. This will encourage meaningful opportunities among like-sized enterprises compared to competition against larger, fully-established enterprises.
Emerging businesses often have trouble securing federal contracts. The Emerging Business Encouragement Act will expand opportunities by requiring federal agencies to set contracting goals for emerging business enterprises equal to or not less than 3 percent of contracts and subcontracts.
Additionally, many emerging businesses have difficulty accessing the capital they need to develop products and hire workers. Under the Emerging Business Encouragement Act, the percentage of federal loan guaranty authority for Small Business Administration loans would increase from 50 percent for all small businesses to 65 percent for emerging business enterprise, providing a significant incentive for lenders to lend to these businesses.
We must support all job creators as our economy continues to recover, but there are significant differences between a startup with only a few employees and an established business with a few hundred employees and decades of experience. This legislation will help these emerging businesses overcome the unique challenges they face in their first few years of operation, and it will ensure these businesses are able to compete for federal contracts and gain access to critical small business loans.
To be certified as an emerging business enterprise, a company must be 10 percent or less the size of the current SBA designation for a small business, which is typically capped at 500 employees.
The company must be less than five years old at the time of certification with annual compensation of individuals in management positions not exceeding 200 percent of the annual mean wage for ``Management Occupations'' defined by the U.S. Department of Labor. These standards will ensure that those businesses benefiting from EBE programs are truly emerging.
With this bill, we can help entrepreneurs get through their first few years, when so many businesses fail, so they can grow and create jobs. And it provides incentives for lenders to provide capital to emerging businesses, one of the top concerns for entrepreneurs.
Mr. Speaker, I invite my colleagues to join me in supporting this important bill.
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