In advance of Small Business Saturday on November 25th, the Biden-Harris Administration is announcing new actions to support small businesses—a key pillar of Bidenomics—and releasing new data that highlights the small business boom taking place during this Administration. Under President Biden, Americans have filed a record 14.6 million applications to start businesses – a sign that the historic investment in small businesses is driving confidence and optimism from entrepreneurs, and generating more resilient and competitive markets.
Entrepreneurs of color are particularly benefiting from the Biden-Harris Administration’s increased lending and investments in small businesses. Data from the Federal Reserve’s Survey of Consumer Finances shows that between 2019 and 2022, the share of families owning a business increased by 9%, with particularly large increases among Black and Hispanic households. The percentage of Black households owning a business during this same period more than doubled — after falling between 2007 and 2019. These increases support wealth building in Black and Hispanic communities, as business owners report more wealth as compared to non-business owners in this survey. And under President Biden, we’ve achieved the fastest growth in Black business ownership in over 30 years.
Today, the Biden-Harris Administration celebrates the hardworking Americans who run our small businesses and are the engines of our economy by announcing the following new actions:
- $50 million in American Rescue Plan funds will help thousands of small businesses access historic investment opportunities from the President’s Investing in America agenda. The U.S. Department of the Treasury is announcing awards of more than $50 million to 20 states to provide legal, financial, and other advisory services that are expected to help more than 10,000 small businesses owned by individuals from traditionally underserved communities secure loans and investments to grow and expand. These awards are being provided through the State Small Business Credit Initiative’s (SSBCI) Technical Assistance Grant Program – part of the American Rescue Plan’s historic support for underserved small businesses that is providing capital, building ecosystems of opportunity and entrepreneurship, and creating new jobs and economic opportunity. This announcement represents only a portion of the nearly $10 billion SSBCI funds deployed to states, tribes, and territories to launch and expand capital access programs for roughly 100,000 small businesses. Each dollar of SSBCI funds catalyzes $10 of small business lending and investments – resulting in tens of billions of new small business financing across the country through 2030. To date, the Treasury Department has already approved more than $8 billion in funding to all 50 states, and an additional $108 million in technical assistance grants to 32 states through the SSBCI Capital Grant and Technical Assistance Grant programs.
- Small Business Administration (SBA) delivered $50 billion to small businesses in Fiscal Year 2023, with major increases in support for underserved businesses, including minority-owned businesses. Today, the SBA released data on the performance of its lending programs in Fiscal Year 2023, including its signature 7(a) Loan Program, which supports financing to small business for working capital and a range of other uses, and its 504 Loan Program, which provides financing for major fixed asset purchases. That data shows SBA delivered a historic $50 billion in capital to small businesses across the country in Fiscal Year 2023. Highlights from the data include:
- Total SBA Lending: The SBA has backed $108 billion in 7(a) and 504 loans to small businesses during the Biden Administration – 32% more than the same time in the prior administration.
- Minority Lending: Since 2020, the share of the SBA’s loan portfolio going to minority-owned businesses has increased from 23% to over 32%. For example, the number and dollar value of SBA-backed loans to Black-owned businesses has more than doubled. The SBA backed $3 billion in loans to Latino-owned businesses in FY23 – a record-breaking high. Lending to AAPI-owned small businesses is on the rise, with loan count and total loan dollars both increasing by over a third since 2020. Finally, loans to Native-owned small businesses are up 70% and total loan dollars have nearly doubled since 2020. These are just a few of the results of SBA’s efforts to expand access to its core capital programs for all small businesses.
- Women-Owned Small Businesses: Lending to women-owned small businesses is once again on the rise, with loan counts increasing by 70% since 2020 and total loan dollars exceeding $5 billion in 2023.
- Veteran-Owned Small Businesses: Loans to veteran-owned small businesses are up by a third since 2020, with total loan dollars exceeding $1 billion in 2023.
- Small dollar loans. Small businesses consistently voice the need for access to small dollar loans, with survey results indicating over 50% seek loans of less than $100,000. According to another survey, only one-third of the smallest businesses – those with $100,000 or less in annual revenue – report receiving the full funding they request from banks. The SBA has worked to increase small dollar loans, and in FY23 delivered nearly $90 million in microloan funding – loans of $50,000 or less—with 35% of those loans going to Black-owned businesses and 15% going to Latino-owned businesses. SBA delivered more loans in its signature 7(a) loan program under $150,000 in FY23 than in FY22, FY21, and FY20 – an overall 45% increase since President Biden took office.
- SBA and the Department of Agriculture strengthen partnership to invest in rural small businesses. This week, the SBA and USDA signed a memorandum of understanding to strengthen their long-standing partnership to create jobs and economic growth in small and underserved communities. Together, the agencies will provide trainings to rural businessowners, work with agricultural producers to identify ways to export products, and expand the collaboration between USDA’s Rural Partners Network and SBA’s Resource Partners Network to improve economic security for small businesses throughout rural America.
The Biden-Harris Administration has already taken significant steps to support small businesses in the past few months. This includes:
- SBA expanded its lending program focused on underserved communities for the first time in 40 years. This fall, the SBA issued new licenses to lenders in the Small Business Lending Company (SBLC) program for the first time in 40 years. The lenders in this program historically outperform banks and credit unions in lending to minority-owned businesses. The three new licensed lenders – Arkansas Capital Corporation, Alaska Growth Capital, and Funding Circle – have expertise and history lending to traditionally underserved communities. Arkansas Capital Corporation is a community development financial institution (CDFI) serving Arkansas and the bordering states, and since 2019 has delivered more than half of their lending to Persistent Poverty Counties – counties with at least a 20% poverty rate for over 30 years. Alaska Growth Capital is a certified Native CDFI with more than 60% of activities dedicated to serving Alaska Native, Native American, and Native Hawaiian businesses and communities. Funding Circle is an online lending platform that has originated more than $4.5 billion in loans to small businesses, with 33% of current loans going to small businesses in low-to-moderate income neighborhoods and 40% going to small businesses in rural areas.
- Treasury released a Notice of Funding Opportunity for $75 million SSBCI Investing in America Small Business Opportunity Program. In October, Treasury announced a $75 million competitive grant program with American Rescue Plan funds for states to provide services to help very small and underserved businesses access opportunities created by the President’s Investing in America agenda – which includes the historic investments made by the Bipartisan Infrastructure Law, Inflation Reduction Act, CHIPS and Science Act, and American Rescue Plan – by offering them technical assistance.
- The Minority Business Development Agency (MBDA) awarded $100 million through the Capital Readiness Program to invest in small business incubators and accelerators. The MBDA awarded 43 non-profit community-based organizations funding to support underserved entrepreneurs launch and scale their small businesses. This program, funded through the American Rescue Plan, is the largest-ever direct federal investment in small business incubators and accelerators of its kind.
- SBA’s Community Navigators Program provides critical technical assistance. This summer, the SBA announced that its more than 50 American Rescue Plan-funded Community Navigators grantees had already helped to secure nearly $250 million in approved funding for small businesses, trained over 290,000 business owners, and conducted 145,000 hours of one-on-one counseling. With funding set to expire by the end of this year, the Biden-Harris Administration proposed additional fundingfor the program in its FY24 Budget proposal and has called on Congress to continue the program.
- Historic investments in small businesses have been provided through the federal procurement system. In 2022, the Biden-Harris Administration awarded a record-breaking $163 billion in federal procurement opportunities to small businesses. These awards include a record $69.9 billion, or 11.4% of federal contracting spending, to Small Disadvantaged Businesses (SDBs) – exceeding the Administration’s FY22 goal – and over $28 billion to service-disabled Veteran-owned (SDVOB) small businesses, or 4.6% of federal contracting spending.