September 23rd 2023.
The U.S. Small Business Administration (SBA) announced a historic milestone in lending to Black-owned businesses nationwide at the Congressional Black Caucus Foundation’s Annual Legislative Conference on Thursday. This comes as part of President Joe Biden’s Investing in America agenda.
SBA Administrator Isabel Casillas Guzman and Congressman Steven Horsford announced that the number of SBA-backed loans to Black-owned businesses has doubled since 2020. A total of 4,387 loans have been provided, worth $1.3 billion. This translates to a 7.5% overall share of SBA-approved loans for businesses.
Guzman expressed her enthusiasm for the milestone stating, “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.”
The SBA has seen a 65% increase in new business applications since Biden took office, with 13.1 million applications filed. This is a rate faster than the pre-pandemic average.
Creative Investment Research conducted an analysis of SBA data and projected that Black businesses in America could obtain at least another $200 million in loans by the end of 2023. This is based on the current pace of activity. These SBA 7 and 504 loan programs can be used for working capital, buying land, acquiring equipment, acquisitions, and expansions.
William Michael Cunningham, an economist and owner of Creative Investment Research, revealed that SBA's 7 loan approvals to Black firms represented 8% of total loan approvals. This translates to about $1.09 billion in total dollars granted to Black businesses, making up 4.5% of overall lending activity in that category.
However, SBA lending directed to Black businesses still lags compared to other demographics. For instance, the data tied to the 2023 SBA 7 loan approval amount showed over $4.6 billion for Asian businesses and roughly $10.3 billion for white companies.
Cunningham highlighted the potential for collaboration to make more loans to underrepresented communities. He suggested the Minority Business Development Agency as the focal point for this proposed effort.
He also provided data on the institutions that have contributed most to Black businesses this year pertaining to SBA loans. Lendistry SBLC, LLC approved 83 loans worth just over $47 million. Mechanics & Farmers Bank approved 7 loans totaling over $4.9 million. Industrial Bank approved 2 loans for over $1,6 million. Tioga-Franklin Savings Bank approved 4 loans totaling $1,2 million. The Harbor Bank of Maryland approved 1 loan worth $558,000. Liberty Bank and Trust Company approved 3 loans totaling $299,000. The First Security Bank approved 1 loan for $160,000.
Cunningham notes that the number of 7a loans to Black firms approved has grown 68% from 2017 to 2023. He anticipates total SBA lending to Black firms will reach $1.2 billion in 2023.
Overall, the SBA's support for Black-owned businesses has been steadily rising over time. It is an encouraging sign that access to capital is becoming increasingly available for Black entrepreneurs. This cash infusion could be vital to achieving the American dream.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
