If you believe the United States Small Business Administration has ceased disbursing disaster loans such as Citrus North Loans, you are correct—but that does not imply the agency has retired its jersey.
Until December 31, the SBA will accept applications for Covid Economic Injury Disaster (EIDL) loans. It will then review applications received beyond the deadline until all monies have been expended. While the agency notes that its Targeted Advance grant will also expire at the end of the year, it states that it may be unable to execute applications submitted close to the deadline “due to regulatory restrictions.” Those interested in applying for the program were urged to do so by December 10.
However, there is still plenty of cash available at the state level, and if the SBA’s planned budget for 2022 is any indicator, new federal funding possibilities are likely. The organization’s four-year strategic plan, which is set to be revealed in February 2022, demonstrates that the agency will continue to assist with pandemic recovery efforts.
Three things to anticipate from the SBA in the next year:
1. Assist in the acquisition of federal contracts
The Biden administration has increased the percentage of small disadvantaged firms receiving government contracts from 5% to 11% by 2022. Federal agencies will collaborate with the SBA to establish their own contracting objectives in order to meet this new milestone.
One of the primary impetuses of this project has been the government’s diminishing involvement with small businesses. While the SBA collaborates with other government agencies to achieve its statutory objective of awarding 23% of prime federal contracts to small companies, the number of small firms within that base continues to decline, according to a new congressional letter.
The government recently released statistics on company owners’ federal contracting expenditures by race and ethnicity in an effort to promote openness, and the findings are eye-opening. With a few notable exceptions, huge enterprises absorbed the lion’s share of the 559 billion dollars available to small businesses for government contracting in the fiscal year 2020. Though it varies by sector, the SBA defines a small company as one with less than 1,500 employees and sales of less than $1 million but more than $40 million.
Separately, the recently enacted $1 trillion infrastructure package expands possibilities for small companies to compete for billions in federal, state, and local government construction and renewable energy contracts. These contracts include solar panel manufacture, wind farm development, and battery production.
Additionally, are you ahead? In a recent information sheet, the Biden administration signaled that the SBA may adjust procurement targets for additional firms situated in historically underused business zones, including women-owned and service-disabled veteran-owned small businesses and contractors.
2. Increased funding for resources
The agency sought $852.4 million in fiscal year (FY) 2022 budget authorization, somewhat more than the nearly $820 million requested in the previous two years. This implies that you may anticipate more funding for counseling, training, and mentorship programs, among other things. The proposal for entrepreneurial development programs is $46 million more in the fiscal year 2022 than it was in the fiscal year 2021.
Allocating increased funding for the agency’s personnel requirements may help relieve some of the customer service and processing difficulties seen during the epidemic, as SBA administrator Isabel Guzman revealed at a November congressional hearing. The agency is already progressing. While some company owners have complained about delayed processing times, being kept out of the Covid EIDL program, and technical difficulties with the SBA’s automated approvals system, the SBA reports that it cleared its backlog of over 600,000 applications by September. Additionally, by September, the SBA had increased its daily application processing capacity to 37,000 from 2,000.
Until February 18, 2022, the agency is functioning under the terms of a recently approved Continuing Resolution (CR), which appropriates a portion of the previous fiscal year’s money until Congress authorizes another CR or a full-year allocation.
3. Increased visibility for women-owned enterprises
Guzman said in early December that the agency would elevate the visibility of the Office of Women’s Business Ownership (OWBO) by having the department report directly to the Administrator’s Office. The OWBO is now housed inside the Office of Entrepreneurial Development. Though the agency is still in its infancy and nothing is likely to be finalized until the conclusion of the next fiscal year (ending September 30, 2022), OWBO assistant administrator Natalie Madeira Cofield will report directly to Guzman.
There is still more work to be done to achieve gender parity, which the Biden administration has prioritized in its National Strategy on Gender Equity and Equality report. Access to resources, opportunities, and financing continue to be challenges for female entrepreneurs, obstacles that have been exacerbated by pandemic strains. Women have left employment at a far greater rate than males throughout the epidemic, owing in part to child and elder care demands.
Nonetheless, some significant strides have been made. Over the last half-century, the number of women-owned firms has increased about 3,000 percent, to approximately 12 million. Women’s Company Centers—which provide counseling, training, and aid with business development—also hit a record 140 sites throughout the nation.