A law that changed the U.S. landscape
It’s hard to believe that 30 years ago, female business owners couldn’t obtain a loan or a credit card without the signature of a male. I was one of those women.
The National Association of Women Business Owners (NAWBO) and other groups had long been advocating for better policy. The U.S. Small Business Administration’s 1988 report demonstrated how little was known about the complexity and diversity of femaleowned businesses and the off-base thinking and approach to public policy that had resulted. This became the catalyst for a more concerted effort. NAWBO’s then-president, Gillian Rudd, and NAWBO members across the country pushed presidential candidates and members of Congress to provide more policy support of female entrepreneurs.
At a news conference on the steps of the U.S. Capitol in early 1988, Rudd called out the SBA on its misguided report of women-owned businesses being mostly based at home with sales under $10,000 per year.
Rudd said we need data and research on women business owners. She said banks need to stop demanding that men sign for loans for women and we need more education and business counseling across the country to help women to grow their businesses even more.
Through intense lobbying, strategic communications and grassroots political action, NAWBO educated elected officials and agency staffers on the economic impact of women-owned businesses. They showed how much more job growth, wealth generation and trade could be produced if women had the same support and access to business ownership as men.
Rudd convinced Rep. John LaFalce, D-N.Y., to author HR 5050, and President Reagan signed it into law on Oct. 25, 1988.
In a short six months, we helped hold hearings on this subject and one of our witnesses didn’t have a husband, brother or living father available to sign for a loan, so her 17-year-old son had to co-sign the loan for her. This was a major eye opener for the U.S. House Small Business Committee.
Some of the tenets for HR 5050 opened several doors for more women to start their own business. The legislation:
• Eliminated state laws requiring women to have a male relative or husband co-sign a business loan.
• Established the Women’s Business Center Program. WBCs provide not only business education but a supportive environment that helps build self-efficacy and confidence. More than 100 centers in 48 states have helped more than 2 million women start and expand businesses.
• Created the National Women’s Business Council. The council tracks women business owners and reports back to the president and Congress on how they are doing based on a nonpartisan approach. Democratic and Republican women serve on the council along with organizations like NAWBO.
• Required the Census Bureau to include women-owned C-Corporations when reporting data. Before 1988, government agencies tracked mostly self-employed women but overlooked larger women-owned enterprises.
On the 30th anniversary of HR 5050, it’s important to reflect on this revolutionary legislation and its place in American women’s history. I’m proud and grateful to have been involved in this historical legislation.
Neese, founder of Neese Personnel, is a past president of NAWBO.