I started my own business and that opportunity should be open to everyone

Growing up the son of a single mother, mired in poverty in North Charleston, South Carolina, I didn’t know if opportunity would ever come knocking. Thankfully, by the grace of God, my mother’s love, and some hard work, I learned to go knock on opportunity’s door instead. While poverty touches people from diverse backgrounds, people who look like me are far more likely to feel its impact. Which is why, as we celebrate Black History Month, we must focus on expanding and improving our free-market system to ensure all Americans have both the access and opportunity to share in our country’s economic success. 

When I wanted to start my own business, I struggled to get my first loan. All I had as collateral was an old Nissan with over 250,000 miles on it, and I barely had a credit score. Luckily, I developed a relationship with my bank, worked to strengthen my credit score, and with the help of a friend who put up some money, I eventually achieved my dream of opening a business.  

But so many stories don’t end up like mine – Americans across the country struggle to access sources of funding, including in our capital markets system. 

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For Black Americans, that problem is only exacerbated – with 57% of Black business owners citing credit availability as a concern, and 40% saying they will never have equal access to capital. While obtaining funding is an issue for all businesses, many minority-owned business owners don’t have access to the same networks that some of their competitors are able to tap into.  

As a result, Black entrepreneurs receive less than 2% of venture capital funding each year. That’s why I’m working to improve access to our capital markets system, with the goal of opening doors to opportunity for businesses and entrepreneurs across our country, so that individuals from Detroit, Michigan, to North Charleston, South Carolina, can have the same access to investment opportunities that companies in Silicon Valley and New York City already enjoy.  

To that end, I’ve put forward a proposal called the "Empowering Main Street in America Act." The driving force behind this idea is to improve access to capital for a broader swath of entrepreneurs, including in minority communities and in rural and non-metropolitan hubs.  

My proposal will address the challenges small businesses face by tailoring regulations for small and new companies looking to grow and expand their operations. This targeted relief, or cutting of red tape, enables businesses to invest in growth rather than burdensome regulatory compliance – which is particularly important for businesses that don’t have an army of lawyers on the payroll. 

And frankly, it’s not just about raising capital. We need policies and programs that create new avenues for hardworking Americans to invest in their local communities. Data shows that Black Americans participate in the stock market significantly less than White Americans.  

This is made worse by the fact that the Securities and Exchange Commission (SEC) wants to make it harder to qualify as an accredited investor, which will impact minority investors the most. To allow for a more diverse group of investors to participate in our capital markets, my legislative framework responsibly expands the definition of who can qualify as an accredited investor.  

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With these changes, individuals won’t be cut off from opportunities to succeed based on the number of zeroes in their bank accounts, and instead will increase the geographic and demographic pools of such investors. 

Lastly, financial literacy is imperative to financial success and is also key to market participation, but unfortunately, it is declining among adult Americans – and Blacks and Hispanics are disproportionately impacted.  

My framework will enhance financial education programs to increase market understanding and participation, which will ultimately help more Americans achieve financial security. I firmly believe education is the best path to success, and if you are aware of both opportunities and risks, you’re better able to make informed decisions for yourself and your family.  

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Most importantly, my framework is designed to create opportunity. It supports pro-growth policies that will result in more high-paying jobs and investment opportunities in minority communities across the country.  

As we celebrate Black History Month, efforts to lift up minority families like my "Empowering Main Street in America Act" should be the focus of our conversations. The strongest path forward for our country’s economy begins with providing all Americans with the tools they need to achieve financial security and ultimately, build their own version of the American Dream. 

Republican Tim Scott represents South Carolina in the United States Senate. He is author of the new book, "America, a Redemption Story: Choosing Hope, Creating Unity" (Thomas Nelson, August 9, 2022).