SBA Shares Progress in Small Business Lending

The United States Small Business Administration (SBA) recently shared some numbers around its progress in small business lending for the year as it has increased the number and dollar amount of loans across several small business capital programs. This includes $50 billion in capital, disaster relief, and bonding to small businesses and disaster-impacted communities across the country in Fiscal Year 2023 (FY23).

The administration said it experienced a banner year of lending with increases in its microloan program and its flagship 7(a) Loan Program. It also made significant increases in lending to Black, Latino, Asian American, Pacific Islander and Native Hawaiian, Native American, women, and veteran small business owners.

“Starting and running a business takes tremendous grit and determination, but it also takes capital — something too many enterprising Americans have historically been unable to obtain equitably and affordably,” commented SBA Administrator Isabel Casillas Guzman. “The Biden-Harris Administration remains committed to simplifying and addressing persistent inequities in accessing capital to ensure all small business owners can get the funding needed to grow and create jobs for our economy. In Fiscal Year 2023, the SBA transformed its lending and investment programs and expanded its capital partners to deliver nearly $50 billion in startup, growth, and recovery capital, as well as surety bonds, including more small business lending to people of color, women, and veterans. As we build on our progress, the SBA will continue to prioritize reforms that will help level the playing field to further the small business boom fostered by Bidenomics.”

The SBA back over 57,300 7(a) loans worth $27.5 billion to small businesses in FY23. This is above pre-pandemic levels. Nearly 70 percent of 7(a) loan volume (over 39,000 loans) were small-dollar loans of $350,000 or less. The program originated more loans under $150,000 in FY23 than in FY22, FY21, and FY20. Also during FY23, the 504 program provided over 5,900 fixed-rate loans for equipment, real estate, and debt refinancing worth over $6.4 billion to small businesses.

At the same time, $87 million in microloan funding was provided to over 5,500 small businesses. 35 percent of these loans went to black-owned businesses, and 15 percent went to Latino-owned businesses.

The SBA also delivered $670 million in disaster assistance to over 5,200 small businesses. During the year, the administration made changes to increase loan limits for homeowners and renters following federally declared disasters. An extension to the first payment deferment period was also made from five months to twelve for all disaster loans. Another change was made to lift a restriction on property owners to only use disaster loan funds to mitigate a "similar" disaster event that caused damage to their home or business, so they have more options to mitigate damage from different types of disasters. This reduces the need for future financial assistance and promotes disaster mitigation and resilience, the SBA said.

Further touting its support for minority-owned businesses, the SBA shared the following stats for the year: 4,700 loans to Black-owned businesses totaling $1.5 billion; 7,700 loans to Latino-owned businesses, totaling $3 billion; 7,500 loans to AAPI-owned businesses, totaling more than $6.4 billion; 500 loans to Native-owned small businesses, totaling $278 million.

The SBA also backed 13,000 loans to women-owned small businesses, totaling $5 billion and 2,800 loans to veteran-owned businesses, totaling $1.2 billion.