As we wind down the holiday season and 2022, I’d like to take a moment to reflect on a new report released by the United States Small Business Administration (SBA) and our Administrator Isabella Casillas Guzman. As the Regional Administrator for New England, it was my honor to be appointed to this role by the president a year ago to work closely with businesses, local, state and federal officials to lead our way out of the pandemic.
I want to thank our amazing SBA workforce and resource partner teams for the extra hours and devotion they invested in helping the backbone of our economy, small business. Over 90 percent of businesses in New England are small and those companies employ upwards of half of our region’s workers. In addition to their role in producing jobs, small businesses support our communities and tie our region and nation together.
Through great effort and innovation, the SBA reached nearly $43 billion nationally in funding to small businesses, providing more than 62,000 traditional loans through its 7(a), 504, and Microloan lending programs and over 1,200 investments through SBA licensed Small Business Investment Companies (SBICs) for Fiscal Year (FY) 2022. This news is significant. As Administrator Guzman said, “While still managing billions in COVID relief, the SBA also delivered record lending in FY22, helping tens of thousands of entrepreneurs across our nation get the needed funding to start, grow, and build resilient businesses”.
Here in Maine the SBA supported $220 million in funding to small businesses through our traditional loan programs. Of course, the services we provide aren’t limited to just loans and dollars. We reach businesses and the local community in other ways too. In August I had the opportunity to visit the Brunswick Farmer’s Market. Congresswoman Chellie Pingree, who sits on the Congressional Subcommittee on Agriculture, and State Senator Matthea Daughtry, who represents Brunswick in the Maine State Senate, joined me and we had the chance to hear directly from farmers and local food producers about how the state and federal delegations and agencies can support these vital small businesses. Visits like these are important so we know how to best help the different types of businesses we serve.
We have seen record numbers of businesses started, stronger than expected economic growth, near historic low unemployment rates, and recovery of all the jobs lost during the pandemic and more. In New England, $2 billion in funding through our core lending programs were invested to help drive our regional economy. The foundation built by SBA and this Administration through core services, the American Rescue Plan, Bipartisan Infrastructure law, CHIPS ACT, Inflation Reduction Act and so much more will serve our economy well as we enter 2023.
In 2023, we will see enhancements in our veteran owned business certification processes-it was my honor to convene the first ever SBA New England Veteran’s Summit. Additionally, further prioritization of equity to level the playing field for small business, access to capital, more opportunity for government contracting, expansion of international sales opportunities, and expanded effort into our underserved and rural communities are all on the docket for 2023.
Continuing the look ahead, we will work to reduce costs for those who need relief. The SBA reduced 7(a) fees to zero for borrowers and participating lenders on loans up to and including $500,000. And Administrator Guzman and the Agency are addressing systemic gaps in access to capital for the smallest, underserved businesses through the expansion of the Community Advantage program to increase the number of mission-based lenders, and further provide revised guidance that streamlines eligibility and underwriting requirements to simplify the delivery of small-dollar loans through the program.
Furthermore, as a top priority in FY23, the SBA is proposing regulatory reforms to its affiliation and other rules to offer the same streamlining it created under Community Advantage across the 7(a) program. It has also proposed a rule change to increase the number of permanent Specialized Small Business Lending Companies (SBLCs) in the program, helping to identify and close holes in the market that far too many under-resourced small businesses fall through.
Lastly, diversifying and expanding the reach of private investment in FY23 is a top focus point: proposed reforms are planned to go into effect to address structural aspects of the SBA’s public-private investment partnership, the SBIC program, which has historically limited the flow of licensed SBIC capital to small businesses and startups not adequately financed by private markets alone. The goal is to increase new fund managers, diversify financing strategies, and private funds focused on equity-oriented investments in the SBIC program so small businesses and startups, especially those in underserved communities and geographies, capital-intensive industries, and undercapitalized technologies critical to national security can more readily gain access to private capital.
Here at the SBA we strive to make the American dream of business ownership a reality. The partnership and work of 2022 serves us well as launch into the ambitious 2023 agenda described above. Our small businesses are the lifeblood of our communities. In the remaining days of this year, I encourage you to consider shopping and dining at local establishments the rest of this holiday season and whenever possible. Shopping small and dining local, helps our job creators, boosts our local economies, and enriches our neighborhoods every day.
Mike Vlacich is the New England Regional Administrator of the U.S. Small Business Administration who oversees agency activities in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
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