The Biden administration has kept its promise to level the playing field for Black-owned businesses with better access to the capital and resources they need to succeed. According to CNBC, the US Small Business Administration (SBA) has now surpassed the $1 billion mark in loans to Black-owned small businesses for the third year in a row, doubling the amount from the 2020 fiscal year.
An estimated 161,031 companies are now benefitting from government-backed loans with non-predatory interest rates, leading to an unprecedented boost for the national economy. Over one million people are employed through these businesses and an annual income of $183.3 billion is generated.
SBA administrator Isabel Casillas Guzman is aware of the systemic issues surrounding access to capital and how under-investment can limit economic growth. This year, the SBA has made some major changes to make it easier for Black-owned businesses to get the funding they need. The application process has been simplified and those applying for loans under $500,000 are no longer required to make a prior equity investment. Additionally, an online eligibility verification system has been implemented to streamline the process even more.
Despite the positive changes, many Black-owned businesses are still struggling to stay afloat. The Bank of America 2023 Women & Minority Business Spotlight has revealed that a lack of access to capital is still a major issue. Black-owned businesses are a cornerstone of many communities and their success can be a source of hope and inspiration.
Rohit Arora, CEO of lending platform Biz2Credit, is optimistic about the impact of more Black-owned businesses getting funded. “If Black-owned businesses are getting funded, the inner-city economies will get better since many small businesses are urban-based,” he said. With more access to capital and resources, Black-owned businesses can finally stand on an equal playing field and reach their full potential.
