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Achieve Smart, Bold, and Accessible Small Business Gains with the SBA

Advisory Date: 
Monday, April 20, 2015
Advisory Number: 
Michael Ashcraft

By Cassius F. Butts, Regional Administrator

Government may be historically slow to adapt, but adapt we must. Therefore, under U.S. Small Business Administration (SBA) Administrator Maria Contreras-Sweet, we’ve rebranded the SBA to stand for “Smart, Bold and Accessible.”

By “smart,” we are referring to harnessing the power of technology to bring the SBA fully into the 21st century. On the debt financing side, SBA has implemented LINC, an online SBA platform that connects lenders with small businesses and entrepreneurs. We also have established a predictive credit scoring for our underwriters, and soon we will fully automate our loan applications under SBAOne. The private sector implemented smart systems years ago. Now, it is our turn to catch up and look forward for America’s 28 million small businesses and potential entrepreneurs.

Lenders across the country  have responded very positively to what we are doing, and hundreds of new lenders have started issuing SBA-backed loans. As Administrator Contreras-Sweet approaches her one-year mark, SBA has reached goals such as increased lending to underserved borrowers across the board. Our lending is up 23 percent up to women entrepreneurs, 36 percent to African Americans, 20 percent to Hispanic Americans, 12 percent to Native Americans, and 9 percent to Asian Americans.

The B in SBA stands for “bold.” That means we’re redoubling our efforts to fill gaps in the capital markets. We have called on Congress to raise the SBIC family funds limit, and we will continue to go to Capitol Hill and make the case that the leverage available to licensees under common control should be $350 million – not $225 million. That is what being bold is all about: pushing back on laws and limits that are outdated and that stand in the way of progress. Additionally, we are helping small businesses reach global markets through SBA’s suite of export services. In FY 2014, SBA guaranteed loans to exporters for a total loan value of $1.34 billion, an increase of 12.6% year-over-year.

Finally, and perhaps most importantly, the A in SBA stands for “accessible.” We are actively seeking diverse fund managers committed to making investments where capital gaps are widest. One of the ways we are working towards this is through our Impact Investment Fund. Impact SBICs deliver financial returns and social returns, such as improving the health of our planet and its people. Under the leadership of Maria Contreras-Sweet, we have tripled our number of Impact SBICs. They are putting a magnifying glass on the areas where gaps in capital formation are widest. Last year, our SBIC investments in women-owned businesses went from $38 million to $173 million. That is nearly a 500 percent jump. But it still amounts to a little more than 3 percent of our total dollars invested.

As I travel across the Southeast, the hunger among America’s small businesses to take the next big step is limitless. Too often, they are cold-calling and door-knocking their way to a lucky break. It should not be this way. Together, we will help you embrace smart, bold, and accessible ways of doing business for the betterment of your community and our nation.