“In the midst of a once-in-a-generation pandemic, the SBA’s mission-driven team delivered a record number of SBA’s traditional loans to our nation’s small businesses – in addition to more than $1.1 trillion in COVID-related relief since the start of the pandemic,” said SBA Administrator Guzman. “While progress has been made, our data also tells a deeper story: historic inequities in accessing capital persist, and we must do more to lower the barriers of entry to opportunity for all our entrepreneurs. We will continue to build on our impactful programs to meet small businesses where they are and connect them with the resources needed to thrive.”
“The SBA continues to make headway in helping small businesses access much-needed capital, but much more work remains to be done,” said Patrick Kelley, Associate Administrator for the Office of Capital Access. “Our flexible, low-interest 504 loan program grew in loan volume by 41%, and the SBA team is already at work for fiscal year 2022 to support job and entrepreneurial growth across the country.”
Overall Funding and Impact:
Under Administrator Guzman’s leadership, the SBA has made it a priority to increase access to capital for business owners across the nation, particularly from traditionally underserved communities. Fiscal year 2021 traditional lending data of note includes:
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$36.5 billion in 7(a) loans: Nearly 52,000 7(a) loans worth more than $36.5 billion were provided to small businesses. Lenders reported that minority business owners received nearly $11 billion in 7(a) loans or 30% of the SBA’s total 7(a) portfolio. Data also shows that women-owned businesses received nearly $5 billion in FY 21, while veteran-owned businesses received $1.2 billion.
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$8.2 billion in 504 loans: Working with authorized Certified Development Companies (CDCs), the SBA’s 504 program delivered 9,600 loans worth more than $8.2 billion to small businesses, fully exhausting funding authority for the first time in the program’s history. Minority business owners received nearly $1.88 billion in loans — 23% of the total 504 portfolio. In FY 21, the program also provided over $712 million in lending to women-owned businesses and increased its support of rural small businesses by nearly 33%.
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$71.8 million in microloan funding: In fiscal year 2021, $71.8 million in microloan funding went to nearly 4,400 small businesses. Forty-one percent of those loans went to underserved communities, including Hispanic-owned and Black-owned small businesses.
The SBA continues to focus on pandemic relief and further supporting the nation’s economic engine for recovery and growth. Since mid-2020, the SBA has delivered more than $1 trillion in economic aid via COVID relief measures to help America’s small businesses and those hardest hit by the pandemic survive. SBA state-specific traditional lending numbers can be found in this dataset reflecting agency approvals by state and congressional district.
As the data indicates, the Georgia District experienced record amounts for the following:
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1,759 loans were approved for the 7(a) program totaling approximately $1.82 billion
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235 loans were approved for the 504 program totaling approximately $209 million
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133 microloans were approved for approximately $4 million
Addressing Equity Challenges That Persist Throughout the Small Business Economy:
Despite significant progress in its traditional lending programs, the agency is acutely aware of gaps that persist for certain communities in accessing capital. The SBA’s existing loan programs serve an important role in credit markets for small businesses, particularly those with collateral and demonstrated revenue that are denied a loan by a commercial bank or often lack relationships with established lenders.
Over the past five years, loans issued to the smallest borrowers through the SBA-backed 7(a) loan, Express, and Community Advantage decreased by over 45%. However, the decline in the proportion of small-dollar loans is not unique to SBA loan portfolios. Federal Deposit Insurance Corporation (FDIC) data on commercial small business lending by regulated banks shows an overall 3% decline (translating to over 600,000 loans) in the proportion of loans under $100,000. This lack of small-dollar loan appetite from lenders has led to disproportionate impacts on minority business owners. Firms with non-Hispanic Black ownership and firms with $100,000 or less in revenues were only half as likely as firms with non-Hispanic white ownership to obtain bank funds (23%, 24%), and Latino-owned firms were similarly lower (34%).
Addressing the systemic gap in access to capital for the smallest and underserved businesses has been Administrator Guzman’s north star and will continue to be a top SBA priority in FY 22 and beyond.
For more information about SBA’s loan programs, financial assistance, and other services, visit www.sba.gov.