The U.S. Small Business Administration (SBA) is working to expand its network of banks and other lenders that will lend capital to support small businesses in historically racially discriminated or underserved communities.
In addition the SBA has a concerted effort underway to support women and minority-owned small businesses and entrepreneurs and is currently seeking to remove regulatory barriers for ex-offenders to apply for capital for entrepreneurship or operate a small business.
Those were some of the new initiatives the SBA has underway under the Biden Administration, the Administrator of the SBA, Isabella Guzman, said during the Leadership Café, hosted by Goucher College and the Greater Baltimore Committee on April 5 at the college. Mileah Kromer, associate professor of political science and the director of the Sarah T. Hughes Center for Politics and Donald C. Fry, President & CEO, Greater Baltimore Committee, served as moderators of the monthly speakers program.
“It’s beyond critical” that small businesses and entrepreneurs are supported by the SBA, Guzman said, in part because they are often the civic leaders in their communities. In addition, she said, “entrepreneurship is a pathway to building wealth.”
As for the COVID-19 pandemic and the economic recovery, Ms. Guzman said, the SBA went from serving about 60,000 borrowers annually to 11.4 million borrowers under the federal Paycheck Protection Program with $1.2 trillion in relief funding distributed.
“This has really been a transformative time,” she said.
With the economy largely recovered from the pandemic and creating jobs again the SBA sees “a lot of opportunity on the horizon” for small businesses “as do many Americans, she noted, as the agency has seen a 30% growth in entrepreneurship” since the pandemic began in the U.S. in 2020.
“We’ve seen application rates just go off the charts,” Ms. Guzman said.
During the last two years, she said, the strong interest in entrepreneurship have been driven predominately by women and people of color. The mission of the SBA is “so critical right now,” she said, because women and people of color tend to face barriers to capital, which has historically resulted in underinvestment in such businesses. Under the Biden Administration, she said, the SBA wants to remove those barriers so they can contribute to economic growth.
In response to a question about planned improvements to the SBA’s Community Advantage Program, which aims to support business investment in underserved communities, Ms. Guzman said that under the Biden Administration the pilot program will be extended to 2024. Efforts also will be undertaken to grow the number of lenders that will issue loans in underserved markets and simplify the loan application process.
In response to another question regarding how higher education can best prepare students interested in pursuing entrepreneurship or operating a small business, she noted that students should be taught how to pivot and be flexible as circumstances change – a key business lesson from the pandemic. She also said it would be beneficial if students were taught how to develop the “entrepreneurial mindset,” including how to assess and take risks and how to develop and test new business ideas before investing heavily in them.