The Small Business Administration (SBA) recently announced that during the tenure of its administrator Isabel Casillas Guzmán the agency raised nearly $43 billion in financing for small businesses, offering more than 62,000 traditional loans through its 7(a) lending partners, 504, and Microloan, as well as more than 1,200 investments through SBA-licensed Small Business Investment Companies (SBICs) for tax purposes.

Casillas Guzmán stated:

While still managing billions in COVID relief, the SBA also delivered record lending in FY22, helping tens of thousands of entrepreneurs across our nation get the needed funding to start, grow, and build resilient businesses.

SBA Milestones in 2022

Although small business owners still face ongoing structural challenges when seeking capital, the SBA's efforts have eased their situation.

Among the outstanding achievements this year, the following stand out:

• Thanks to SBA's low-interest 504 loan program, which was strengthened to reach $9.2 billion, there were a record level of low-interest 504 applications.
• The 7(a) program saw an increase in small loans, evidence of the SBA's prioritization of startups and businesses hampered by gaps in credit markets.
• Despite the overall pace of raising and deploying capital from US private funds slowing in 2022, the SBA committed nearly $4 billion to licensees of Small Business Investment Companies (SBICs).
• 62% of private funds receiving an SBIC license in 2022 were managed by general partnerships that include investment directors who are women, minorities or veterans.
• It increased the amount of funding for small businesses owned by women, minorities and veterans by 29% compared to the previous year.

“Our work at the SBA, under the Biden-Harris Administration, addresses entrenched inequities in capital markets and throughout our economy.  We continue to make progress expanding our network of SBA lenders and removing barriers to capital for small businesses – the foundation of a competitive global economy,” added Casillas Guzmán.

NEW: In FY22, SBA reached nearly $43B in funding to small businesses, providing more than 62,000 traditional loans through 7(a), 504, and Microloan lending partners and over 1,200 investments through SBA licensed Small Business Investment Companies. More: https://t.co/Oi7oDikzNU

— SBA (@SBAgov) December 13, 2022

About investment programs

SBA continues to innovate and restructure its programs, while deepening outreach efforts to better reach business owners across the country, particularly in traditionally underserved communities.

On the other hand, the highlights of the investment programs and regular commercial loans of the fiscal year 22 include:

- $25.7 billion in 7(a) loans: Returning to pre-pandemic levels, nearly 47,700 7(a) loans were provided.

In total, 68% of the loan volume (32,152 loans) were for values of $350,000 or less.

The program originated more loans under $150,000 in FY22 than in FY21 and FY20. Lenders also reported that minority business owners received more than $8.3 billion in 7(a) loans, and women business owners received nearly $7.3 billion in 7(a) loans in FY 22.

- $9.2 billion in 504 Loans: Working with licensed CDCs, SBA 504 program provided 9,254 fixed-rate loans for equipment and real estate.

According to CDC reports, the program provided $2.5 billion in loans to minority business owners and nearly $900 million to women-owned businesses, while the number of rural small businesses served increased by nearly 15%.

- $82.6 billion in microloan financing: Compared to FY21, the amount went towards microloan financing for 5,055 small businesses, with 76% of loans going to underserved communities, including Hispanic and Black-owned small businesses, according to reports from lenders.

- $7.9 billion in financing through private equity and debt funds authorized as SBICs: In an increase from FY21, financing was provided to 1,217 small businesses and startups, of which 26% were small businesses or enterprises owned by women, minorities and veterans located in underserved geographic areas.

- $584.4 billion in export-related trade financing: Reversing a four-year downward trend and despite a stronger US dollar environment, the SBA underwrote $275.3 billion in term loans for Export Express and international trade. At the same time, it expanded its export working capital portfolio to $309.1 billion.

Reactions

“The SBA continues to make headway in helping startups and small businesses access much-needed capital, but much more work remains to be done. Our flexible, low-interest 504 loan program grew in loan volume by 12 percent, and the SBA team is already at work for FY23 to support job and entrepreneurial growth across the country,” expressed Patrick Kelley, associate administrator for the SBA’s Office of Capital Access. 

Bailey DeVries, associate Administrator for the SBA’s Office of Investment and Innovation, noted: “FY22 set SBIC program record highs of $7.9 billion in small business financings which, in turn, created and sustained ~130,000 U.S. jobs, and the SBIC portfolio grew to approximately $38 billion in public and private capital. With the SBA’s proposed regulatory reforms, we’ll build on the exciting momentum by diversifying and expanding this important public-private investment program and collaborating with industry to stimulate the flow of capital to small businesses in underserved communities and undercapitalized industries critical to our national security.”

Under the leadership of Casillas Guzmán, the SBA has committed to expanding access to its core loan programs and better meeting the needs of entrepreneurs for more successful results in job creation, US exports, and the economy GDP.