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Biden and Harris announced several initiatives Friday, Nov. 29, in advance of Small Business Sunday, to assist small businesses through increased access to federal contracts and loans. The actions announced on Friday, November 29, are part of the ongoing effort to promote economic growth and equity in communities that have been underserved by encouraging small business development.
The Key Takeaways
- In advance of Small Business Sunday, the Whitehouse announced a number of new initiatives that will increase federal assistance to small businesses.
- Small Business Administration (SBA), has raised the cap on loans under 7(a) to Community Advantage Small Business Lending Companies from $350,000 up to $500,000.
- Office of Management and Budget has issued new guidelines to better forecast federal contract opportunities.
- SBA-approved lenders can offer small businesses more working capital, and they have other options for loans.
Main Provisions
- Underserved Business Loans: Increase loan limit:
Small Business Administration (SBA), has raised the limit on Community Advantage Small Business Lending Companies (7(a) Small Loans (CA SBLCs) to $500,000. These lenders are devoted to a specific mission, which is often serving women entrepreneurs, minorities, veterans and people living in rural or low-income areas. - Strengthening Federal Contracting Opportunities:
Office of Management and Budget is issuing new guidance on federal procurement to help improve the forecasting of contract opportunities. This guide is designed to help small business prepare proposals that are competitive and win contracts. - Promote Small Disadvantaged businesses (SDBs):
OMB increases federal suppliers by increasing the number of minorities, women and small businesses. This will add resilience to the supply chain.
The implications of the Small Business Act
Working capital is a vital component of small business success. SBA loans are a common source. From $350,000, small business loan providers approved to service and originate Standard 7a SBA Loans can now offer up to $500,000. The increased cap on lending can help small businesses obtain the funding they need for equipment and salaries.
Small businesses with a majority of women or minorities as owners compete for federal contracting opportunities. New initiatives will expand contracting opportunities, making them more transparent.
Since January 2021, over 20 million new applications have been filed—the highest in U.S. history. It is particularly significant for historically underrepresented communities, as Black business ownership doubled and Hispanic and Asian American ownership reached its highest level in 30 years.
Choose an SBA Loan Lender
SBA-preferred lending institutions can provide small business owners with access to lenders who have more power to approve, process and close loans, as well as service them more effectively than non-preferred creditors. SBA Lender Match can be used by small business borrowers to find the most suitable SBA preferred lenders.
Alternatively, small businesses have lending options outside of the SBA lending process, though interest rates and other terms may not be as favorable.
The Bottom line
Whitehouse initiatives, which include increasing SBA loan limit, improving access federal contracts and prioritizing equity funding, empowers small businesses to be vital economic drivers in the United States. The Whitehouse initiatives are designed to provide entrepreneurs of all backgrounds with the resources and tools they need to be successful.
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