WASHINGTON – Administrator Isabella Casillas Guzman, head of the U.S. Small Business Administration (SBA), joined Congressman Steven Horsford at the 2023 Congressional Black Caucus Foundation’s Annual Legislative Conference today to announce new data showing the rate of SBA-backed loans going to Black-owned businesses has more than doubled under the Biden-Harris Administration.
“Black businesses are helping to power a nationwide small business boom that is creating jobs, advancing equity in communities across America, and uplifting our economy,” said Administrator Guzman. “Today’s benchmark loan numbers show our work under President Biden’s Investing in America agenda making inroads to support more of America’s Black small business owners. Despite these gains, we still have a long way to go. We continue to push forward with long overdue and transformational reforms to our lending and investment programs that will raise the bar of equity and opportunity even further for all of America’s small businesses."
“Economic mobility and success are vital to achieving the American dream, but for far too long small businesses owned by Black Americans have faced roadblock after roadblock on that path,” said Congressman Steven Horsford (NV-04), Chair of the Congressional Black Caucus. “I applaud the efforts of the Biden Administration and the SBA to help Black small business owners succeed and grow. The growth in lending to the Black community and other underserved groups is promising news and is a result of direct efforts to reach more communities.”
The SBA has backed more than 4,300 SBA loans to Black-owned businesses so far in FY 23 through the 7(a) and 504 programs. Total loan dollars ($1.3 billion) and overall share of SBA approved loans (7.5%) to Black-Owned businesses have also more than doubled since 2020.
|SBA 7(a) and 504 Loans to Black-owned Businesses||FY 2017||FY 2018||FY 2019||FY 2020||FY 2021||FY 2022||FY 2023 YTD|
|Share (% of loans)||3.7%||4.1%||4.3%||3.5%||4.5%||6.4%||7.5%|
Under the Biden-Harris Administration, the United States has experienced a historic small business boom being led by women and people of color, with 13.1 million new business applications filed since President Biden took office—a rate 65% faster than the pre-pandemic average.
SBA has taken major steps aligned with the President’s Investing in America agenda to increase access to its core capital programs, including among Black entrepreneurs. These include:
- Expanding the Community Advantage program, which supports lending to small businesses in underserved communities through mission-driven, community lenders, and making mission-oriented lending a permanent part of the SBA loan program through the Community Advantage Small Business Lending Company license;
- Deploying the $100 million Community Navigator Pilot Program funded under President Biden’s American Rescue Plan;
- More than tripling the number of Women’s Business Centers at Historically Black Colleges and Universities;
- Forging historic partnerships with the National Pan Hellenic Council, Operation HOPE, and others;
- Implementing new reforms to address persistent capital access gaps; and
SBA’s 7(a) Loan is SBA’s primary business loan program. It provides guaranties to lenders that support financing to small businesses for a range of uses, up to $5 million. SBA’s 504 Loan specifically provides long-term, fixed rate financing up to $5.5 million for major fixed asset purchases by small businesses.
The SBA guarantee enables lenders to offer credit to businesses that otherwise would not qualify. SBA lenders must adhere to interest rate caps and fee restrictions; they often help borrowers by providing longer repayment periods that would otherwise be unavailable.
Complete SBA lending data for FY23 will be available after the end of the fiscal year. The public can access dashboards updated daily reflecting SBA lending totals by demographic group, industry, and other breakdowns at SBA Office Of Capital Access - Dataset - U.S. Small Business Administration (SBA) | Open Data.
About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow, or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.