SBA backed over 100,000 small business financings this year-the most in over 15 years
Today, Vice President Harris announced that the Small Business Administration (SBA) provided a record $56 billion through more than 100,000 small business financings in Fiscal Year (FY) 2024-the most in more than 15 years. The Vice President also announced new actions by the Biden-Harris Administration to cut red tape and expand access to Federal contracting opportunities.
"Small businesses are the backbone of our economy. And we know that small business owners need access to capital to hire more employees, grow their businesses, and advance innovation," said Vice President Harris. "Today I am proud to announce that the U.S. Small Business Administration has made record lending to over 100,000 small businesses in the last year, the most by the agency in over 15 years. When small businesses thrive, our local economies thrive."
The Biden-Harris Administration has powered a small business boom across the country. Since President Biden and Vice President Harris took office, American entrepreneurs have filed nearly 20 million applications to start new businesses. Business ownership has doubled among Black families and hit a 30-year high for Hispanic families.
While the Biden-Harris Administration doubles down on supporting this small business boom, Congressional Republicans have repeatedly tried to cut SBA's funding by nearly a third and want to raise taxes and costs for small businesses by repealing Inflation Reduction Act investments.
Building on these efforts to support small businesses, Vice President Harris is announcing:
New Records for Lending to Small Businesses
The SBA released its 2024 Capital Impact Report, showing that the agency increased its lending to small businesses to a record high $56 billion in FY 2024-a 50% increase over FY 2020. Further, SBA provided over 100,000 small business financings last year-the most in over 15 years. Since FY 2020, SBA has increased lending to underserved businesses including a:
- 3x increase in loans to Black-owned businesses
- 2.5x increase in loans to Latino-owned businesses
- 2x increase in loans to women-owned businesses
- 2x increase in small dollar loans (loans of less than $150,000)
Increasing Access to Federal Contracting Opportunities
The SBA is proposing new regulations to increase small business participation on multiple award contracts, a popular buying tool used for over 20 percent of all contracting by the Federal Government. The proposed rule will require agencies to set aside orders made under these contracts when two or more small business contract holders are expected to submit competitive offers. Multiple award contracts allow agencies to meet mission needs in a timely, cost-effective manner by awarding task and delivery orders to contract holders using streamlined competitions.
The SBA proposed rule will require agencies to take steps that make it easier for small businesses to become contract holders on multiple-award contracts where they will then be eligible to compete for task and delivery orders through streamlined competitions. SBA projects that the new rule, if finalized as proposed, will result in up to $6 billion in additional awards to small businesses each year. This new proposed rule will further implement OMB's January 2024 memo on "Increasing Small Business Participation on Multiple-Award Contracts." The members of the Federal Acquisition Regulatory Council will also be proposing regulatory changes in the near future to implement OMB's guidance and align with SBA's rulemaking.
Direct Support to Meet Businesses' Individual Needs
This summer marked the first year of the Capital Readiness Program (CRP), funded by the Minority Business Development Agency (MBDA)'s State Small Business Credit Initiative (SSBCI) and announced by Vice President Harris in August 2023. The CRP is a $125 million investment to help minority and underserved entrepreneurs grow and scale their businesses, the largest-ever direct Federal investment in small business incubators and accelerators of its kind. Today's data shows the incredible impacts the 43 program awardees have already made in their communities in the first year of the program. Through September 30, 2024, following their efforts to quickly stand-up programs, the 43 awardees have already:
- Enrolled over 6,300 small businesses
- Hosted nearly 2,500 networking events
- Supported the formation of over 2,600 new businesses
- Raised over $260 million in capital for small businesses
Cutting Red Tape for Small Businesses Seeking Federal Contracts
The SBA just launched MySBA Certifications to simplify and streamline certifications for small business Federal contractors. The Biden-Harris Administration committed to using every tool at its disposal to reduce administrative burden for small businesses seeking to compete for Federal contracts. Building on this goal, MySBA Certifications is a one-stop-shop that allows small business owners to apply for multiple certifications with a single application, rather than submitting separate applications for the HUBZone, 8(a), Women Owned, and Veteran Owned Small Business Certification programs. SBA also simplified and modernized its application-using plain language, eliminating redundant questions, and reducing documentation requirements-reducing the time to apply by 40% for a single certification and over 70% for multiple certifications. SBA's new operational efficiencies will reduce processing times across the programs-meaning firms will receive their decisions more quickly and can begin competing for sole-source and set-aside contracts. In FY 2024, SBA certified more than 17,000 small businesses-a single year record and a nearly 40 percent increase over FY 2023. The agency expects to build on this success with MySBA Certifications and significantly grow the base of certified small business government contractors-helping the Federal Government meet the President's 15 percent small disadvantaged business goal in FY 2025.
Leveraging Public and Private Capital Through the State Small Business Credit Initiative
The Department of the Treasury plans to release the 2022-2023 SSBCI Annual Report next week, providing additional background on data first previewed in July 2024. SSBCI is a nearly $10 billion program that is providing investment and support to small businesses across the country. Through 2023, SSBCI had already enabled access to $3.1 billion in public and private financing for thousands of small businesses. The report will show that 75% of transactions supported underserved businesses and 78% supported very small business with fewer than 10 employees through the end of 2023.
In 2024, local jurisdictions have continued to leverage partnerships to catalyze SSBCI dollars. Efforts include:
- The Access Small Business program by Calvert Impact: This program leverages funds from SSBCI to bring access to capital and technical assistance to underserved small businesses in New York, New Jersey, Nevada, and Washington State, as well as access to capital markets for community lenders. Partners include the Community Reinvestment Fund, Grow America, and the Urban Investment Group at Goldman Sachs Alternatives.
- The Initiative for Inclusive Entrepreneurship (IIE): IIE is a public-private collaboration to ensure the equitable implementation of SSBCI. IIE's initial 18-month pilot was incubated by Hyphen, a leading national public-private partnership accelerator. The initiative's implementation partners include Aspen Institute's Business Ownership Initiative, Founders First Capital Partners, JumpStart, Mission Driven Finance, Next Street, Nowak Metro Finance Lab, and Scale Link. Across IIE programs, the Initiative deployed over $10 million in direct funding and secured over $177 million in loans, loan matches, grants, and private capital. Additionally, Mission Driven Finance announced the Indigenous Futures Fund, combining a target of $25 million in credit and $2 million in grants to support Tribal SSBCI recipients. Starting in July 2024, the Milken Institute began serving as IIE's new home.
- Tribal Consortia: In August 2024, SSBCI announced a consortium of 125 Alaska Tribes, the nation's largest Tribal SSBCI consortium and part of the most expansive investment in small business financing for Tribal governments in history. In total, four Tribal consortium representing 170 Tribes have been awarded $124 million in SSBCI Capital Program funds to support investments in Tribal enterprises and small businesses. Partnerships among Tribal Nations are important to expanding the reach of SSBCI.
- Supportive Business Services: In September and October 2024, Treasury announced 14 awards to 12 states and two Tribal governments through the $75 million Investing in America Small Business Opportunity Program (SBOP). SBOP grantees will provide legal, accounting, and financial advisory services to small businesses in a wide range of industries and will engage at least 34 partners for program deployment.
Developing New Tools to Help Small Businesses Access Capital, Customers, and Technical Assistance
The Interagency Community Investment Committee (ICIC) developed fifteen state-specific small business resource guides, covering over 55 programs offered by nine federal agencies. The guides are intended to help small businesses identify federally-supported sources of capital and technical assistance available in their communities, and help direct businesses to federal contracting and tax resources. ICIC leadership has been conducting a series of virtual events in October with small business owners to talk about the Biden-Harris Administration's small business programs and these new resource guides.
