This commentary was written by Mike Vlacich, New England Regional Administrator for the US Small Business Administration, who oversees agency activity in all six states. He lives in Concord, New Hampshire.
With the holidays and 2022 coming to a close, I wanted to take a moment to review a new report from the U.S. Small Business Administration and our Administrator, Isabella Casillas Guzman.
As Administrator of New England, I was honored to be appointed to this position by the President a year ago to work closely with businesses and local, state and federal officials to lead our way out of the pandemic.
I want to thank our amazing team of SBA workforce and resource partners for putting in the extra time and dedication to help the backbone of our economy – small businesses. More than 90 percent of businesses in New England are small businesses, and these companies employ more than half of our region’s workforce. Additionally, small businesses support our communities and tie our region and country together.
Through tremendous effort and innovation, the SBA has provided nearly $43 billion in small business financing nationwide, provided more than 62,000 traditional loans through its 7(a), 504 and microfinance programs, and through SBA-licensed small Enterprise Investment Corp. has made more than 1,200 investments for FY2022. The news is significant. As Administrator Guzman said, “While still administering billions of dollars in Covid relief funds, the SBA also made record loans in FY22, helping tens of thousands of entrepreneurs across our country get startup, The capital you need to grow and build resilient businesses.”
In Vermont, the SBA provided $72 million in financial support to small businesses through our traditional loan program. During the year, we welcomed two lenders to our SBA loan family. As of December, Vermont’s newest microlender, Brattleboro Development Industrial Corp., managed to disburse $165,000 to underserved microbusinesses just a few months after becoming a fully operational microlender. New England Federal Credit Union, Vermont’s largest financial institution with more than 95,000 members, also became an SBA lender this year.
Our lending partners reach out to their communities to reach the small businesses in which they operate, helping them get the support they need to thrive in today’s uncertain climate.
We’re seeing record numbers of business starts, stronger-than-expected economic growth, near-record-low unemployment, the recovery of all the jobs lost during the pandemic, and more.
In New England, $2 billion has been committed through our core lending program to help boost our regional economy. The foundation built by the SBA and this Administration through Core Services, the American Rescue Plan, bipartisan infrastructure laws, the CHIPS Act, the Lower Inflation Act, and more will serve our economy well as we enter 2023.
In 2023, we will see improvements to the certification process for established businesses. It is my honor to host the first-ever SBA New England Veterans Summit.
Additionally, further prioritization of equity to level the playing field for small businesses, access to capital, greater government contracting opportunities, expanded international sales opportunities, and expanded efforts to our underserved rural communities, all in 2023.
Continuing to look ahead, we will work to keep costs down for those who need relief. The SBA reduces the 7(a) fee to zero for borrowers and participating lenders for loan amounts up to $500,000. Administrator Guzman and the agency are addressing the systemic gap in access to funding for the smallest underserved businesses by expanding the Community Advantage program to increase the number of mission-based lenders and further providing revised guidance to streamline eligibility and underwriting Requests to simplify microloans provided through the program.
Additionally, as a top priority for FY 2023, the SBA is proposing regulatory changes to its affiliation and other rules to provide the same streamlining that Community Advantage created in Plan 7(a). It also proposes rule changes to increase the number of permanent specialty small business lenders in the program, helping to identify and close loopholes in the market that too many underresourced small businesses fall into.
Finally, diversification and broadening of private investment in FY23 is the primary focus. The reform plan goes into effect to address structural issues with the SBA’s public-private investment partnership, the Small Business Investment Corporation program, which has historically limited the flow of licensed SBIC capital to small businesses and start-ups that cannot be adequately financed by private markets alone.
The goal is to add new fund managers, diversify financing strategies, and private equity funds focused on equity investing in the Small Business Investment Corporation program to facilitate small businesses and start-ups—especially those in underserved communities and regions, capital-intensive Industries and undercapitalized businesses — technologies critical to national security — have easier access to private capital.
At the SBA, we strive to realize the American dream of business ownership. Partnerships and work in 2022 will serve us well as we launch the ambitious 2023 agenda described above. Our small businesses are the lifeblood of our communities.
I encourage you to consider shopping and dining at local venues whenever possible for the rest of this holiday season. Small shop shopping and local dining help us create jobs, boost our local economies and enrich our communities every day.
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