By MAE ANDERSON AP Business Writer
The Small Business Administration said it backed $56 billion in financing to small businesses and disaster-affected areas during the fiscal year ending Sept. 30, up 7% from a year prior.
The growth was driven by smaller loans, the agency said in its annual Capital Impact report.
For the first time since 2008, the SBA distributed more than 100,000 financings to small businesses, up 22% from fiscal 2023 and 50% over 2020.
The SBA doesn’t give out direct loans, except when they’re related to disasters, but it works with lenders to distribute loans to small businesses. The loans typically have better rates than traditional loans.
“As every entrepreneur knows, capital is critical,” said SBA Administrator Isabel Casillas Guzman. “Through loans, investments, and surety bond guarantees, the SBA has helped power the small businesses that have in turn powered America’s unparalleled economic recovery from the COVID-19 crisis.”
Many loans were small dollar, a priority for the SBA. The SBA said it backed over 38,000 7(a) loans under $150,000, for a total of $2.7 billion. That’s double from the amount of small dollar loans received in 2020 and one-third higher than 2023.
The SBA said in the report it implemented a rule to simplify and streamline lending criteria for all lenders and strengthened its network of SBA lenders to give small businesses more access to small-dollar loans – instead of turning to credit cards or other high-interest lending options.
A particular focus has been Black-, Latino- and women-owned businesses. The SBA helped to distribute 5,200 loans for $1.5 billion to Black-owned businesses, 9,600 loans for $3.3 billion to Latino-owned businesses, and 15,500 loans for $5.6 billion to majority women-owned businesses during the fiscal year.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
