From bakeries to bridal shops: Small businesses would suffer from Basel III Endgame

This week is Small Business Week, a chance to celebrate the entrepreneurs and doers that make the American economy run. As we tip our hats to these trailblazers, it's important to remember that Basel III Endgame would have negative real-world consequences for small business owners.

Don't take our word for it. Here's what small business owners from around the country are saying: 

  • Jill Bommarito, Founder and CEO of Ethel's Baking Company in Michigan, warned that Basel III Endgame could push small business owners to predatory lenders: "If enacted, this rule would not only cut off many small businesses from accessing the capital they need to grow, but it will push small business owners to predatory lenders because they'll have no other choice. Alarmingly, the same survey of small business owners shows small business owners turning to predatory lending amid the capital crunch is already beginning. I come from a family of entrepreneurs and have seen firsthand the consequences of predatory lenders. It's simply unconscionable." (Jill Bommarito, "The Basel III rule would hamstring small businesses like mine," American Banker, 1/15/2024)
  • Elke Weil-Millan, Owner of Panorámica Strategic Communications in North Carolina, argued that Basel III Endgame would harm North Carolina's small businesses, especially those that are minority owned: "Our state is home to nearly 1 million small businesses, a majority of which were able to open their doors thanks to the lending services made available by banks. They now continue to look to these financial institutions for continuing access to capital in order to pay for ongoing business expenses. Encouraging the passage of higher capital requirements would put these lending systems at stake, as banks would quickly look to protect their own pockets and reduce loan availability. It would be grim news for Hispanic small businesses owners, who are quickly becoming a growing portion of all minority owned businesses, but could see their growth stymied under these new potential changes." (Elke Weil-Millan, Letter, n.d)
  • Dina Akel, owner of Viera Luxe, a New Hampshire bridal boutique, pointed out that the proposal would make it harder for small businesses to run their operations and contribute to the local economy: "This proposal will increase borrowing costs, making it harder for lower- and middle-income families to buy a car or their first home, for small businesses to secure essential funding to hire more workers, and for farmers to take out loans for next year's crops. Think about it this way, If our customers are struggling, the first thing they will be cutting back on is purchases of our products and services. It will require banks to maintain nearly 20% more capital, resulting in increased borrowing costs for lower- and middle-income Americans. Small and new businesses rely on loans to run their operations, make payroll, and contribute to their local economy. Without reliable access to credit, they become more vulnerable, affecting the hiring of new employees and expansion plans." (Dina Akel, Linkedin, 11/2023)

Moving forward with Basel III Endgame would be catastrophic for small businesses around the country. It's time for regulators to scrap the proposal and start over.