As a small business owner, I know how important affordable loans are to helping local businesses grow and thrive. Unfortunately, too many small business owners are unable to take the next step to improve their business – like investing in new technology or hiring more employees – because they are unable to take out a loan. What’s more, recent efforts to raise interest rates would make it even harder for small business owners to access the loans they need.
Currently, Colorado caps interest rates on supervised consumer loans to protect consumers from exorbitant interest rates. Some lenders are seeking to raise the maximum annual percentage rate that they can legally charge, which would result in millions of extra interest for Coloradans. This increase in cost would amount to predatory lending and render loans unaffordable for too many small business owners, who often lean on consumer loans to finance necessary costs for their businesses.
The small business share of total bank loans dropped from 50% in 1995 to 30% in 2012, and Small Business Majority’s polling found 91% percent of small business owners identify access to capital as a top concern. We don’t need to make this challenge even worse for small businesses.
I want our state lawmakers to understand increased interest rates will harm small businesses. What we really need is better business loans for Colorado entrepreneurs to ensure our small business community thrives – not higher interest rates.