High school graduates have been given unsecured loans to go to college - sometimes graduating with a degree that does not bring an income that allows for the timely repayment of the loan. If we are willing to burden 18 year-olds with $100k of unforgivable debt to get a college degree, why not offer them $10k-$20k loans to start a business?
Similar terms to current student loans would apply. One significant change I propose is a cap on accrued interest and/or no compounding interest. Interest is applied only to the principle and payments are applied to principle first. Payments would be deferred for a set amount of time - between one and five years - perhaps with the option to begin repayments earlier.
High school graduates would fill out the FAFSA and submit a business plan and receive a loan to start a business instead of go to college. Perhaps trade school or vocational programs are involved in the plan, but the idea is to promote self-reliance and entrepreneurship.
A go-getter with a pressure washer and a pickup truck can be a high return investment both in terms of economic return and in terms of benefit to their community.
Unrestricted SBA Loan Approval for Women Entrepreneurs
To empower women in business, the Small Business Administration (SBA) should ensure equitable access to loans for all women, regardless of race, ethnicity, or background. Streamlined approval for startups led by women will foster diversity and innovation across industries.
Application Anonymity to Ensure Fair Evaluation
Removing all demographic information (race, background, gender, etc.) from loan and business applications would enable merit-based assessments. This step would promote fairness by ensuring approvals are determined by business potential and personal dedication rather than identity factors.
Increased Access to Capital for Startups, Independent of Personal Credit
Many entrepreneurs face barriers due to limited or poor personal credit history. To support small businesses, banks should prioritize assessing business viability over personal credit for first-time applicants. Loans based on the business’s potential, not just the individual’s credit score, would empower more entrepreneurs to contribute to the economy.