America's small businesses need every possible opportunity to out-compete and out-innovate the rest of the world. Last night, Congress opened more doors for our small businesses by approving trade agreements that will reduce and eliminate many barriers to some of the fastest-growing international markets. These agreements cut tariffs and red tape for our small exporters, helping increase U.S. exports by billions of dollars each year and supporting tens of thousands of new, good-paying jobs here at home.
I’m pleased to announce that the SBA hit an all-time record in small business lending this fiscal year: over $30 billion in lending supported to over 60,000 small businesses.
Let’s take a step back and see how we got here.
In October 2008, lending markets froze. Banks simply weren’t giving small business loans.
Then, President Obama signed the Recovery Act. We were able to raise the guarantee on SBA loans to 90%, and reduce or eliminate the fees. It worked. SBA lending roared back. We were able to bring 1,200 lenders back to SBA lending who had not made a loan since 2007. SBA lending quickly went back up to pre-recession levels as we helped to fill the gap in the marketplace.
In fact, these two provisions worked so well that Congress provided funding five more times to keep it going. Then, a year ago, the President signed the historic Small Business Jobs Act – the most important piece of small business legislation in over 10 years. It included those critical provisions, and it resulted in our highest quarter of SBA lending ever.
That brings us to today’s all-time record year in the nearly 60-year history of the SBA.
Ultimately, the decision to make these enhancements back in early 2009 ended up making a huge impact. By far, they were the biggest driving force behind the fact that – over the past 3 fiscal years – we supported over $70 billion in lending to over 150,000 small businesses in every corner of America.
But, today, we still have gaps to fill.
For example, data show that smaller loans under $250,000 are still down. And we know that these loans are particularly important in underserved communities. That’s why we’re working to broaden the spectrum of lenders, including mission-based lenders and CDFIs who can successfully reach into these communities using our new Community Advantage program. In addition, last week, the Vice President and I announced that 13 of our largest banks just made $20 billion in new commitments to small business lending over the next three years.
And, on a bigger level, the President is asking Congress to pass the American Jobs Act to put even more dollars in the pockets of small business owners, especially when they hire more workers and give raises.
When I was traveling around the country two years ago, many small businesses were telling me that they needed a loan just to keep their doors open. Today, though, I’m hearing from more and more businesses that need a loan to buy that next piece of equipment, to re-stock their inventory, or to hire more workers.
We’re gearing up for another great year in SBA lending. We’re back at the weekly SBA loan levels we saw before the recession hit, even without the special provisions that helped us fill the gap these past few years. We’re going to keep the momentum going, and continue doing everything we can to help small businesses do what they do best – create jobs.
I wanted to share with you a guest post from Navy Captain Brad Cooper, Executive Director of the "Joining Forces" initiative. I know I speak for all of us here at SBA when I say we are grateful for our military community and excited to be a partner in this nationwide initiative. -Karen
After nearly 10 years of war, our nation has asked more of our service members and their families than ever before. In an effort to help give back to our military community, we are asking Americans to get involved in any way they can - and Americans are stepping up in ways large and small.
In April, First Lady Michelle Obama and Dr. Jill Biden started Joining Forces- a national initiative that mobilizes and energizes all sectors of society to provide our military community opportunities and support. Here are six ways you can get involved:
Consider Hiring a Veteran- Our veterans possess a wide variety of skills and experiences that can be applied to the private sector. Learn about the companies that have made the commitment to hire or train veterans.
Pledge Service Hours- Pledge hours in honor of military families, find service projects and report your hours.
Find Service Opportunities- Search for service opportunities by zip code and take action in your community.
Send a Message of Thanks- A simple act of kindness can mean so much. Say thanks to a military family today.
Share your Support- How are you serving our nation’s military families? Tell us your story.
Share your own Volunteer Project- Have an idea to support military families in your community? Create a project and invite others to join.
In addition to Joining Forces, President Obama recently proposed the Returning Heroes and Wounded Warrior Tax Credit for our servicemen and women returning from overseas.As part of the American Jobs Act, this incentive provides employers a tax credit from $5,600 to $9,600 when hiring an unemployed veteran.
This week, I visited Raleigh Denim, a small business in North Carolina. Inspired by a junior-high shop teacher who taught him to make things by hand, a young man named Victor and his wife Sarah started their business in their apartment. They had the idea that there could be demand for a handcrafted, iconic American-made product like jeans. They bought a cheap, old sewing machine and hired local people who knew – or could be taught – the old-fashioned ways of American textile manufacturing, an industry that I myself learned when working for my family’s business during college.
Their plan worked. They’ve grown to about 15 employees, they’ve sold thousands of pairs of jeans, and now they’re expanding into overseas markets in Asia, Europe, and elsewhere.
Today, exporting is an important way for small business to scale up and create the jobs that America needs now. That’s one of the reasons that the President signed into law the Small Business Jobs Act last year, which gave the SBA $30 million a year for three years to award to states. They’re called State Trade Export Promotion (STEP) grants.
These STEP grants are a good example of how we’re working with state and local governments to support regional economic development. In Raleigh, I was joined by North Carolina’s Governor Bev Perdue to make the announcement that these funds have gone out the door nationwide.
North Carolina – home to about 7,000 small exporters – is receiving over $600,000 in STEP grant money to help small firms participate in trade shows, to help them go on trade missions abroad, and to promote their goods and services in foreign markets. Some of these STEP grants are even going to help provide translation services for businesses that need a website in a different language.
Let’s keep supporting small businesses like Raleigh Denim that want to start or expanding their exporting operation. That’s our commitment here at the SBA and throughout the Administration. If you're intrerested in exporting, go to www.export.gov
Picture Caption: SBA Administrator Karen Mills (in blue suit) and North Carolina Governor Bev Purdue (in grey suit) with Raleigh Denim owners Sarah and Victor Lytvinenko (far left and far right)
The thousands of small businesses that provide great products and services to the federal government have a big reason to cheer the President’s “QuickPay” announcement today, which will cut in half the amount of time it takes to put money in their hands to 15 days instead of 30 days. This results in a permanent infusion of cash flow into their business, which they can put towards working capital, expanding their businesses, marketing their products, and creating jobs.
Recently, I talked to Rachel Carson, the President of a Philadelphia business called Helicopter Tech. She was very excited when I asked her how this might help her business, saying that it would help with cash flow, payroll, and much more.
When businesses like hers consistently get paid faster, their financial footing gets stronger – permanently. And with nearly $100 billion each year in federal contracts going to small businesses, cutting in half the time they get paid is a powerful way to help businesses make the decision to go ahead and buy that next piece of equipment or hire that next worker.
Overall,“QuickPay” is a smart and powerful boost that effectively delivers billions more dollars into the hands of small contractors so that they can do what they do best – create jobs.