Washington, D.C. – The U.S. Small Business Administration (SBA) supported a total of $56 billion in financing for small businesses and disaster-affected areas during the fiscal year ending September 30, 2024. This figure represents a 7% increase over the previous year, driven primarily by the increase in smaller loans, according to the agency’s annual Capital Impact report.
For the first time since 2008, the SBA distributed more than 100,000 small business loans, up 22% from fiscal year 2023 and up 50% from 2020. Although the SBA does not offer direct loans except in disaster cases, it works in collaboration with credit institutions to provide financing with more favorable rates than traditional loans.
Support for small loans
One of the SBA’s top priorities has been increasing access to small loans, benefiting thousands of businesses seeking affordable capital. During the fiscal year, the SBA supported more than 38,000 7(a) loans in amounts under $150,000, totaling $2.7 billion, which is double the low-value loans made in 2020 and a third more than in 2023.
The SBA also implemented new regulations to simplify lending criteria, facilitating access to financing through a strengthened network of lenders. This initiative seeks to offer alternatives to small business owners to avoid resorting to credit cards or high-interest loans.
Focus on minority and women-owned businesses
The agency has also prioritized funding to Black, Latino, and women-owned businesses. In the last fiscal year, 5,200 loans worth $1.5 billion were made to Black-owned businesses, 9,600 loans worth $3.3 billion were made to Latino-owned businesses, and 15,500 loans worth $5.6 billion were made to women-owned businesses.
SBA Administrator Isabel Casillas Guzmán highlighted the importance of these funds for entrepreneurs: “As every entrepreneur knows, capital is crucial. “Through loans, investments, and bond guarantees, the SBA has supported small businesses that, in turn, have fueled America’s unprecedented economic recovery from the COVID-19 crisis.”
This financial support not only bolsters economic growth, but also expands opportunities for entrepreneurs from diverse communities, cementing the SBA’s commitment to inclusive economic development.
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To support small loans, which are essential for the growth of small businesses across the nation. With us to discuss the recent developments in SBA financing is [Guest Name], a small business owner and financial expert. Thank you for joining us today!
**Interviewer:** Thank you for being here, [Guest Name]. The SBA recently announced a significant increase in the number of loans distributed this past fiscal year. What does this mean for small business owners like yourself?
**Guest:** Thank you for having me! The increase in the number of loans is a very encouraging sign for small business owners. It means that access to capital is improving, and more entrepreneurs can secure the funding they need to start or grow their businesses. With over 100,000 loans distributed this year, many more businesses will benefit from the support and resources that the SBA provides.
**Interviewer:** The SBA also mentioned a shift towards smaller loans. Why do you think this is important?
**Guest:** Smaller loans are incredibly important because they address the needs of many micro-businesses and startups that may not require a large amount of financing. These businesses are often the backbone of our economy, and providing them with access to capital can foster innovation and job creation in local communities.
**Interviewer:** It’s fascinating that the SBA has seen a 50% increase in loans since 2020. What do you think contributed to this surge?
**Guest:** The pandemic highlighted the critical role that small businesses play and the challenges they face. Many entrepreneurs had to pivot quickly, and with that came a need for financial support. Additionally, more institutions, like Chase, are collaborating with the SBA to offer flexible financing options, making it easier for small business owners to access the funding they need.
**Interviewer:** Lastly, with Chase announcing their offerings of SBA loans with flexible terms, what advice would you give to entrepreneurs considering an SBA loan?
**Guest:** I would advise entrepreneurs to thoroughly assess their business needs and seek loans that align with their financial capabilities. It’s also crucial to engage with lenders who understand your business and can offer tailored advice. Doing your research and understanding the terms will help you make informed decisions that benefit your business in the long run.
**Interviewer:** Great insights, [Guest Name]. Thank you for sharing your thoughts on the SBA’s role in supporting small businesses!
**Guest:** Thank you! It’s been a pleasure discussing this important topic.
