Legislation addresses uphill battle that Black and Brown and low-income communities face when it comes to safe and affordable small business financing options

For Immediate Release: 
May 2, 2024

Contact: 
Olivia Goethals
olivia@sgstrategies.com | (309) 502-1991

ILLINOIS–Today, the Illinois Senate passed SB 2234, the Small Business Financing Transparency Act. The following is a statement from Jane Doyle, Senior Regulatory Policy Associate at Woodstock Institute:

“Today’s passage of SB 2234 by the Illinois Senate marks a significant step forward in our ongoing efforts to promote transparency and fairness in small business lending. Under this bill, small businesses would be entitled to know the APR – or annual percentage rate – of a loan offered by a nonbank company. Consumers have been entitled to such information since 1968 when the federal Truth in Lending Act was enacted.

Research shows that small businesses in Black, Brown and lower income communities disproportionately turn to online nonbank lenders for financing. These lenders are essentially unregulated, and some even charge rates as high as payday lenders. What’s worse is small businesses are not even entitled to know a loan’s interest rate before signing on the dotted line.” 

“This legislation aims to address these challenges by establishing a regulatory framework for nonbank lenders based on the Small Business Borrowers Bill of Rights, a national set of best practices developed by the Responsible Business Lenders Coalition. By ensuring transparent pricing and terms, this legislation will empower small business owners to make informed financial decisions and help protect them from exploitation.

“Small businesses are the backbone of our communities, and they deserve the support and protections necessary to thrive. We urge Illinois State Representatives to swiftly pass SB 2234 to give small businesses basic protections when borrowing money.”

Only two other states – California and New York – have enacted similar transparency protections.

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Woodstock Institute advances economic and racial justice within financial systems through research and advocacy across Illinois and the United States. Among their areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.