November 6, 2023
The Biden administration has kept its promise to even the playing field for Black-owned businesses by way of access to necessary capital and other business resources. The United States Small Business Administration (SBA) has now surpassed the $1 billion mark in lending to Black-owned small businesses for the third year, doubling that of the 2020 fiscal year, CNBC reports.
The SBA’s commitment to offering government-backed loans, without predatory interest rates, to Black-owned businesses has resulted in unprecedented growth for the estimated 161,031 companies under the umbrella and the national economy. Across those businesses, CNBC reports that more than one million people are employed, and more than $183.3 billion is brought in annually.
“To continue to under-invest and face these barriers in the communities is something that would limit our economy and our growth competitively,” said SBA Administrator Isabel Casillas Guzman. “The systemic issues around access to capital are, of course, foremost.”
This year, the SBA also made significant changes that are predicted to continue boosting loan numbers. On Aug. 1, the administration simplified the application process and did away with the required prior equity investment for loans under $500,000. The SBA also implemented a more efficient online eligibility verification system.
Even with increased efforts to help Black-owned businesses procure much-needed funding, many small businesses still struggle to maintain. Black business owners feel that lack of access to capital will continue to be a problem, according to the Bank of America 2023 Women & Minority Business Spotlight. Booming Black-owned businesses are a necessary pillar in all communities countrywide, where hope is often gleaned from seeing the success of others.
“If Black-owned businesses are getting funded, the inner-city economies will get better since many small businesses are urban-based,” Rohit Arora, CEO of lending platform Biz2Credit, said.