Calling it “historic progress,” the U.S. Small Business Administration announced it has doubled lending to Black businesses nationwide in multiple categories.
The SBA reported that women and people of color have led a historic small business boom. Some 13.1 million new business applications have been filed with the agency since President Joe Biden took office— a rate 65% faster than the pre-pandemic average.
SBA Administrator Isabel Casillas Guzman and Congressman Steven Horsford (D–NV Fourth District) announced the loan performance at the 2023 Congressional Black Caucus Foundation’s Annual Legislative Conference on Thursday.
“Black businesses are helping to power a nationwide small business boom that is creating jobs, advancing equity in communities across America, and uplifting our economy,” Guzman stated.
She added, “Today’s benchmark loan numbers show our work under President Biden’s Investing in America agenda making inroads to support more of America’s Black small business owners. Despite these gains, we still have a long way to go. We continue to push forward with long overdue and transformational reforms to our lending and investment programs that will raise the bar of equity and opportunity even further for all of America’s small businesses.”
“Economic mobility and success are vital to achieving the American dream, but for far too long small businesses owned by Black Americans have faced roadblock after roadblock on that path,” said Horsord, the chairman of the Congressional Black Caucus.
A separate analysis of SBA data is projecting that Black businesses in America could obtain at least another $200 million in loans by the end of 2023 if that activity continues at its current pace.
The cash infusion could be vital as securing financing is often among the largest operating challenges for Black entrepreneurs. The SBA loans can be used in many ways, including working capital, buying land, and acquiring equipment. The money can be tapped for acquisitions, expansion, and other uses.
Now, Cunningham’s firm projects lending activity to keep growing.
Cunningham says the gap in lending between the groups is significant but represents an opportunity for collaboration to make more loans to underrepresented communities. He says the Minority Business Development Agency might serve as the focal point for this proposed collaborative effort.
Further, Cunningham says the SBA has worked more with Black-owned banks to expand access to 7(a) loans. He provided this chart on institutions’ contributions to Black businesses this year pertaining to SBA (7a) loans:
Lendistry SBLC, LLC (California) approved 83 loans worth just over $47 million.
Mechanics & Farmers Bank (North Carolina) approved 7 loans totaling over $4.9 million.
Industrial Bank (Washington, D.C.) approved 2 loans for over $1,6 million.
Tioga-Franklin Savings Bank (Pennsylvania) approved 4 loans totaling $1,2 million.
The Harbor Bank of Maryland (Maryland) approved 1 loan worth $558,000.
Liberty Bank and Trust Company (Louisiana) approved 3 loans totaling $299,000.
The First Security Bank (Oklahoma) approved 1 loan for $160,000.
Mechanics & Farmers Bank, Industrial Bank, The Harbor Bank of Maryland, and Liberty Bank and Trust are listed on the BE Banks list of the nation’s largest Black-owned banks.
Check out more details on the SBA’s 7(a) loan program and its impact on Black-owned businesses here.
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Source: Black Enterprise