Opportunity Fund founder and CEO Eric Weaver (@ericthefez) and other small business lending leaders gathered in Washington D.C. last week to launch the Small Business Borrowers' Bill of Rights, which outlines six fundamental financing rights that Opportunity Fund believes all small business owners deserve.
"There are some very troubling practices in the small business credit market that we need to contain without stifling innovation. The credit landscape is changing rapidly for small businesses. New online, data-driven and 'alternative' lenders are offering credit to 'unbankable' entrepreners. Some charge rates well over 100% APR without disclosing the true cost of borrowing," said founder and CEO Eric Weaver.
The Small Business Borrwers' Bill of Rights (BBoR) is the first-ever consensus on responsible small business lending practices. The six rights are:
- 1. The Right to Transparent Pricing and Terms, including a right to see an annualized interest rate and all fees
- 2. The Right to Non-Abusive Products, so that borrowers don't get trapped in a vicious cycle of expensive re-borrowing
- 3. The Right to Responsible Underwriting, so that borrowers are not placed in loans they are unable to repay
- 4. The Right to Fair Treatment from Brokers, so that borrowers are not steered into the most expensive loans
- 5. The Right to Inclusive Credit Access, without discrimination
- 6. The Right to Fair Collection Practices, to prevent harassment and unfair treatment
At the briefing to announce the Borrowers' Bill of Rights, former head of the U.S. Small Business Administration Karen Mills (@KarenGMills) delivered a keynote address on the changing credit landscape. 'Opportunity Funded' entrepreneurs Catarah Hampshire (@CatarahSGD) and Shoneji Robison, owners of Southern Girl Desserts, shared their powerful experience falling prey to predatory lenders before finding affordable credit from Opportunity Fund.
For more background on the small business credit landscape and the need for borrower protections, check out this article - Why We Need a Small Business Borrower's Bill of Rights" - that provides a rich context for why and how we created the Borrowers' Bill of Rights. Published in The Aspend Journal of Ideas, the article is authored by Opportunity Fund's Vice President of Policy and Research Gwendy Donaker Brown and Joyce Klein, Director of the Aspen Institute microenterprise Fund for Innovation, Effectiveness, Learning and Dissemination (FIELD).
Join us. Stand for small business owners' rights!
We encourage all small business lenders, credit marketplaces, and brokers to join us by attesting that they abide by the Borrowers' Bill of Rights.
>> Become a Signatory
Organizations that are not small business lenders, credit marketplaces, or brokers are encouraged to become Endorsers.
>> Become an Endorser
We announced these rights alongside the other responsible business lending coalition members Accion, Aspen Institute, Fundera, Funding Circle, Lending Club, MultiFunding, & Small Business Majority. We are thrilled to see new organizations signing on already and hope to see our coalition grow as new organizations endorse the Borrowers' Bill of Rights.
Learn more about the Small Business Borrowers' Bill of Rights by clicking here.