S 5631: SOAR Act

S 5631 in plain English: The SOAR Act would create a Small Business Administration grant program awarding cash grants of at least $1,000,000 each to eligible entities to support new small businesses. The program would be funded at $80,000,000 per year from fiscal years 2027 through 2036.

Stated purpose

The SOAR Act aims to create a federal grant program under the Small Business Act that funds organizations — such as incubators and accelerators — which help startup businesses get started and grow by providing them with resources, mentorship, and support services.

Key points

• Creates an SBA program to award cash grants of at least $1,000,000 each to support new small businesses
• Appropriates $80,000,000 per year for fiscal years 2027 through 2036 to fund the program

Arguments supporters make

• Most venture capital flows to just a few cities and leaves out women and minority entrepreneurs — this program would spread startup resources more fairly across the country.
• Startups have historically created nearly all net new jobs, so investing in the organizations that help them succeed could boost employment and economic growth broadly.
• Providing grants to accelerators and incubators rather than directly to startups lets experienced organizations decide how best to help entrepreneurs, putting resources where expertise already exists.

Arguments opponents make

• Federal grant programs for accelerators add bureaucracy and government involvement in a startup ecosystem that many believe works better when driven by private market decisions.
• Requiring accelerators to serve at least 10 startups per year and meet other federal conditions could push these organizations to prioritize compliance over finding and backing the most promising entrepreneurs.
• Concentrating grants through a government competition may favor well-connected or established accelerators over newer or community-based organizations, potentially reinforcing existing inequalities rather than fixing them.

Tradeoffs

Directing federal funding toward underserved entrepreneurs and regions could open opportunities that the private market has not provided, but it also means using public dollars to influence an ecosystem many argue functions best with minimal government intervention. Grants flow to the supporting organizations rather than startups directly, which keeps government at arm's length from individual businesses but also means the benefit to any specific entrepreneur depends on how well the funded accelerator performs.

Current status in Congress: In committee.

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