The Biden-Harris Administration announced a record $3 billion in lending to Latino-owned small businesses, with data highlighting a doubling in the number of SBA-backed loans to such enterprises.
Fiscal Year 2023’s Small Business Administration (SBA) data revealed a transformative shift. SBA Administrator Isabel Guzman, representing America’s 33 million-plus small businesses in the President’s Cabinet, confirmed that SBA-backed loans to Latino-owned businesses now top $3 billion, marking an 80 percent rise from the 2020 figures.
“Our country is experiencing a small business boom driven significantly by the entrepreneurial spirit, drive, and resilience of the Latino community, and the Biden-Harris Administration is working to reverse historic underinvestment in Latinos to unleash their full potential and advance our economy and global competitiveness,” said SBA Administrator Isabel Guzman.
The SBA’s lending programs present a lifeline for small businesses grappling with a tightening credit market. These affordable, federally-backed loans have increased in distribution, with over 7,700 loans extended to Latino-owned businesses in 2023 alone through the SBA’s 7(a) and 504 loan programs. This number is twice the loans granted in 2020. Moreover, the Latino percentage of the SBA’s lending portfolio jumped from just under 8 percent to over 12 percent since the commencement of the Biden-Harris tenure.
Recent data traces this growth:
- Fiscal Year 2023: 7,746 loans amounting to $3.006 billion, making up 12.2% of total loans.
- Fiscal Year 2020: 3,877 loans worth $1.643 billion, comprising 7.8% of total loans.
The current administration has seen a seismic shift in America’s small business landscape. With small business booms, especially among women and people of color, there’s an 11 percent increase in loans to small businesses from FY22 to FY23. Latino entrepreneurs are at the heart of this growth, with Latino-owned small businesses’ creation rate skyrocketing – over 20 percent higher than pre-pandemic figures.
Echoing the ‘Investing in America’ narrative, the SBA has amplified efforts to bridge access to capital, specifically targeting Latino entrepreneurs. Key initiatives include:
- Expanding the Community Advantage Program, fostering lending in underserved regions
- Rolling out the $100 million Community Navigator Pilot Program, courtesy of President Biden’s American Rescue Plan
- Kickstarting the cross-country Latino Prosperity Tour
- A threefold increase in Women’s Business Centers in Hispanic-serving institutions
- Implementation of reforms to address capital access disparities
The SBA’s signature 7(a) loan, its chief business loan program, offers guarantees to lenders, facilitating financing for diverse small business needs, capped at $5 million. Meanwhile, the 504 loans cater to long-term, fixed-rate financing for significant fixed-asset acquisitions by small businesses, capped at $5.5 million.
By ensuring these loan guarantees, the SBA enables lenders to extend credit to businesses that might otherwise struggle to qualify. Moreover, SBA-affiliated lenders offer borrower-friendly terms, including extended repayment timelines, in adherence to stipulated interest and fee caps.
For small business owners, particularly those in the Latino community, these evolving trends in lending signify a brighter and more inclusive future. The commitment of the Biden-Harris Administration to leveling the playing field is clear, and with continued focus, the future of small business in America looks promising.
Image: Envato Elements
This article, "Biden-Harris Administration Boosts Lending to Latino-Owned Small Businesses" was first published on Small Business Trends
via https://www.aiupnow.com
Gabrielle Pickard-Whitehead, Khareem Sudlow
