WASHINGTON, Oct. 24, 2023 (GLOBE NEWSWIRE) -- Today, Administrator Isabel Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s Cabinet for America’s more than 33 million small businesses, announced new SBA data showing that SBA-backed loans to Black-owned small businesses have more than doubled under the Biden-Harris Administration, with nearly $1.5 billion in lending.

“Underinvestment in Black entrepreneurs and other underserved small business owners has limited our economy for decades, and, under the Biden-Harris Administration, the SBA is committed to addressing historic capital gaps to ensure all of our entrepreneurs can create jobs and produce for our economy,” said SBA Administrator Isabel Guzman. “Our FY23 loan numbers show we are seeing results from our actions, with loans to Black-owned businesses doubling since President Biden took office – a testament to the entrepreneurial spirit of Black Americans and this Administration’s commitment to simplifying access, cutting red tape, and broadening the distribution network to create competition and meet the needs of underserved markets. While our progress delivered $1.45 billion to Black-owned businesses last year, we know there is still more work to be done to expand opportunity and make the American dream a reality for all.”

In a tightening credit environment, the SBA’s lending programs deliver a market solution by offering government-backed loans with favorable terms to fill market gaps and get needed funding into small businesses. The SBA backed 4,781 loans to Black-owned businesses in Fiscal Year 2023 through the agency’s signature 7(a) and 504 loan programs, well over double the number in Fiscal Year 2020 (2.78x). Total loan dollars amounted to $1.45 billion, also more than doubling since the start of the Biden-Harris Administration (2.45x), while the Black share of the SBA’s lending portfolio rose from 3.5 percent to 7.6 percent.

Under the Biden-Harris Administration, the United States has experienced a historic small business boom being led by women and people of color, and FY23 furthered that trend with 11 percent more loans delivered to small businesses than in FY22. Black-owned small businesses are crucial to this monumental growth, with the rate of Black-owned small business creation at its highest level in 25 years.

The SBA has taken significant 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; and
• Implementing new reforms to address persistent capital access gaps.

The SBA’s 7(a) loan is SBA’s primary business loan program. It provides guaranties to lenders that support financing to small businesses for working capital and a range of other uses, up to $5 million. The SBA’s 504 loans 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 small businesses that otherwise would not qualify. SBA lenders must adhere to interest rate caps and fee restrictions; they often help borrowers by providing more extended repayment periods that would otherwise be unavailable.

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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. 

NEWS RELEASE

PRESS OFFICE
Release Date: Oct. 23, 2023                 Contact: press_office@sba.gov, www.sba.gov/news
Release Number: 23-83                        Follow us on Twitter/X, Facebook, Blogs & Instagram

Christine Saah-Nazer
U.S. Small Business Administration
202-765-0304
christine.saahnazer@sba.gov

Han Nguyen
U.S. Small Business Administration
202-765-0304
han.nguyen@sba.gov