The Biden-Harris Administration is increasing small business lending limits and helping small businesses compete for federal contracting opportunities
Small businesses are the engines of our economy and the heart and soul of our communities. Today, the White House announced new actions by the Small Business Administration (SBA) and the Office of Management and Budget (OMB) to increase access to federal lending and contracting opportunities for small businesses. SBA is announcing it is making it easier for traditionally underserved small businesses to access capital from mission-oriented lenders by increasing the cap on their SBA 7(a) loans from $350,000 to $500,000. OMB is releasing procurement guidance on both upcoming contracts and subcontracting opportunities to better enable federal agencies to support small business trying to compete for the over $700 billion in federal contracts. And federal agencies are leveraging small disadvantaged businesses at record rates to improve resilience in federal research and development (R&D) supply chains.
President Biden and Vice President Harris invested a record $56 billion in SBA-backed capital in small businesses last year-and have overseen a small business boom. American entrepreneurs have filed over 20 million new business applications, the most in any single Presidential term in history. And these applications are leading historic business creation, with new establishment growth higher under President Biden than at any point in the last quarter-century. Entrepreneurs are thriving across communities, with business ownership doubling among Black families, hitting a 30-year high for Hispanic families, exceeding a 30-year high for Asian Americans, and surpassing pre-pandemic levels for women business owners. The Biden-Harris agenda continues to make sure that small businesses in every corner of the country-rural, suburban, urban, and everywhere in between-have the resources they need to grow and thrive.
In advance of Small Business Saturday, the Biden-Harris Administration is doubling down on investments in entrepreneurs by taking the following actions:
- Expanding caps on critical lending programs. Today, the SBA is announcing an increase of the maximum loan amount backed by their Community Advantage Small Business Lending Companies (CA SBLCs) from $350,000 to $500,000 for active lenders in good standing. These mission-based non-depository lenders-often Community Development Financial Institutions (CDFIs)-focus on providing access to capital to underserved businesses and underinvested businesses, ensuring that women, people of color, veterans, rural, and low- and moderate-income communities have access to SBA-backed capital. This step builds on prior action by the Biden-Harris Administration to support small businesses through CA SBLCs, including making the program permanent following a successful pilot launched by the Obama-Biden Administration.
- Improving forecasting of upcoming federal contracting opportunities. OMB is issuing guidance to federal procurement officials to strengthen government-wide procurement forecasts. Agencies have long been required to prepare annual forecasts of upcoming federal contract opportunities for businesses, but variance in the quality and timeliness has made it difficult for small businesses to prepare their proposals and more effectively compete against larger businesses. Today's memo will help align timelines and expectations, better enabling small business to understand when new opportunities will become available and plan ahead to compete for federal awards.
- Increasing access to federal subcontracting opportunities. In 2023, small businesses received a record $86 billion in subcontract awards from the federal government. Building on this success, OMB is issuing guidance to federal agencies on ways to continue to expand subcontracting opportunities for small businesses, the primary gateway for them to compete as prime contractors. This also improves the resilience of supply chains for critical government needs by increasing competition and expanding the pool of businesses engaged in federal contracts. This guidance describes promising policies and strategies adopted by forward-thinking agencies, and encourages federal procurement officials to recognize prime contractors who meet or exceed their subcontracting plan goals and work to strengthen their small business supply chains.
- Leveraging Small Disadvantaged Businesses (SDBs) to meet research and development (R&D) Needs. Federal R&D investments are integral to maintaining American leadership in emerging science and technology. The Biden-Harris Administration has made significant progress in leveraging the talents of SDBs for federal R&D contracts, with two-year average annual spending at $2.5 billion in Fiscal Years 2022 and 2023-an all-time high and nearly $450 million a year more than in 2020. Following OMB's call for agencies to strategically build out resilience within specific supply chains, the White House, SBA, and the National Aeronautics and Space Administration (NASA) released an internal set of best practices to help agencies reach even greater heights in the R&D sector, including actions to strengthen planning, outreach, and use of the resources available through the 8(a) Program.
Both of OMB's actions build on significant work by the Biden-Harris Administration to help small and underserved businesses access federal contract opportunities, including awarding a record $178.6 billion in federal contracting opportunities to small businesses (28.4% of eligible federal dollars) and a record $76.2 billion to small disadvantaged businesses (12.1% of eligible federal dollars).
