In recent weeks, Trump escalated his assault on small businesses by signing an Executive Order to gut the Minority Business Development Agency (MBDA). The MBDA was created to assist businesses owned by people of color — who face the greatest barriers to accessing capital — the resources and opportunities necessary to start and sustain their businesses. Through its nationwide network, the MBDA has played a crucial role in helping minority-owned businesses secure funding, create jobs, and navigate economic challenges, including during the COVID-19 pandemic. This reckless move will have a significant impact on small businesses, particularly entrepreneurs of color who rely on the MBDA for support. Today, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released a fact sheet to educate the Trump Administration and members of the public about the MBDA’s mission, its essential role in supporting minority-owned businesses, and its impact on economic growth.
The Minority Business Development Agency (MBDA), housed within the U.S. Department of Commerce, is the sole federal agency dedicated to assisting minority business enterprises (MBEs) in overcoming social and economic disadvantages by helping expand MBE access to capital, untapped markets, business contracts, and other resources. Through a network of local business development centers, the MBDA carries out its mission of supporting the growth and competitiveness of MBEs by providing technical and business assistance, support, and resources, as well as advocacy and research on behalf of MBEs.
Initially established as the Office of Minority Business Enterprise by the executive order of Richard Nixon, the MBDA gained formal statutory authorization under the Minority Business Development Act of 2021, enacted as part of the Infrastructure Investment and Jobs Act (Public Law 117-58) signed into law by President Joe Biden. Under the Biden Administration, MBDA’s network helped businesses secure over $3.2 billion in contracts and $1.6 billion in capital for MBEs, and helped to create and retain over 23,000 jobs. On March 5, 2024, a Texas federal judge ruled that the MBDA could no longer consider race when determining eligibility for programs.
Statutory Functions
The MBDA was formally codified by the Minority Business Development Act as part of the Infrastructure Investment and Jobs Act. This legislative action was a bipartisan recognition of the agency's critical importance to our national economic infrastructure. The law explicitly established several core statutory functions that the MBDA is mandated to fulfill:
The MBDA Business Center Program is central to the agency's mission, providing technical assistance and business development services through 38 business centers nationwide. These centers—located in red and blue states-- serve as vital lifelines for entrepreneurs who might otherwise lack access to resources necessary for growth and sustainability.
The MBDA's Research and Data Collection responsibilities include analyzing data related to the success or failure of businesses and conducting research on economic conditions affecting these enterprises. This includes mandatory Biennial Reports that provide crucial insights for policymakers and business leaders.
The Information Clearinghouse function establishes and maintains a repository for demographic, economic, financial, managerial, and technical data pertinent to businesses, in order to increase accessibility for business owners and researchers who might otherwise face significant barriers to obtaining such information.
Additionally, the Annual Diverse Business Forum conducted by the MBDA assesses capital formation challenges and opportunities for businesses, and aims to promote dialogue and solutions that benefit our entire economy.
From 2021 to 2024, MBDA has provided significant funding to key states through its business centers and capital readiness programs.
