Small Business Borrowers' Bill of Rights

Concerned by the emergence of predatory lending practices in the small business lending market, FIELD worked with a coalition including Accion, Fundera, Funding Circle, Lending Club, MultiFunding, Opportunity Fund, and Small Business Majority to launch the Small Business Borrowers' Bill of Rights (BBOR) in August 2015. Designed to foster greater transparency and accountability across the small business lending sector, the BBOR represents the first-ever consensus on responsible small business practices.

WHAT RIGHTS SHOULD SMALL BUSINESS BORROWERS HAVE?

The BBOR also identifies a set of specific practices that are required of lenders and brokers to comply with the rights.

FIELD helped to convene and facilitate the work of this multi-sector group, as it has come together to define a set of borrower rights and industry practices rooted in core values including transparency, fairness, inclusion and access. The Aspen Institute has endorsed the Small Business Borrower’s Bill of Rights, and FIELD will be reaching out to its key supporters and partners to educate them and enlist their support.

HOW CAN THE BBOR BE USED?

The BBOR can be used in three ways:

  • First, it can be a tool for educating small business borrowers about what they should be looking for, and demanding, in a relationship with a lender or broker.
  • Second, it can be a tool for encouraging accountability and, as needed, changing the behavior of some lenders and brokers. All small business lenders and brokers whose chief executives are willing to attest in writing that their organizations comply with all of the practices laid out in the BBOR are invited to become signatories.
  • Third, investors can use the BBOR to inform investment decisions, screen potential investments, and ensure investees employ responsible lending practices.

In addition, FIELD encourages other organizations – small business and consumer advocates, policy organizations and think tanks, policymakers and government agencies, and investors – to endorse the BBOR and take action to promote and support compliance with its practices. Through this industry-led approach, we hope to create market pressure for the small business lending market to adopt more responsible practices.

WHAT’S NEXT FOR THE BBOR?

FIELD and the other members of the Responsible Business Lending Coalition are now reaching out to key partners to educate them and encourage them to endorse or become signatories to the BBOR. In addition, FIELD and the other members of the coalition will continue to meet to determine whether other measures – such as the creation of a certification or ratings process – may be desired and feasible.

For more information, including the list of organizations that have signed onto or endorsed the BBOR and additional detail on the lending practices associated with the above rights, please visit the Small Business Borrower’s Bill of Rights website at www.responsiblebusinesslending.org.