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A Conversation With: Small Business Association Mid-Atlantic Regional Administrator John Fleming
LVB: Small business is the backbone of our economy. Tell me a bit more about why small businesses are so important and why we celebrate them during Small Business Week.
Fleming: For more than 60 years, National Small Business Week has highlighted the programs and services available to entrepreneurs through SBA and other government agencies. During National Small Business Week, the U.S. Small Business Administration shines a spotlight on our nation’s more than 33 million small businesses.
Through community events across the country, we honor entrepreneurs whose achievements over the past year stand out. This year, we will place a greater emphasis on the tenacity of America’s diverse entrepreneurs who have played an integral role in powering our nation’s historic economic comeback and navigated challenges from various pandemic waves, supply chain disruptions, and inflation, as we pivot and continue building a better America.
Small businesses create two out of every three net new jobs in the private sector. More than half of the American labor force either works for or owns a small business. Entrepreneurs are not only making a living for themselves; they are making their neighborhoods vibrant places to live and work, demonstrating their resiliency and flexibility that is contributing to our nation’s economic strength.
LVB: One of the major functions of the SBA is to help small businesses with low interest loans. Tell me about how you help and why these loans are important to small businesses.
Fleming: The SBA doesn’t lend money directly to small business owners except in the case of declared disasters. Instead, we set guidelines for loans made by lending partners, community development organizations, and micro-lending institutions. This allows the SBA to reduce risk to lenders and makes it easier for small businesses to get loans. SBA-guaranteed loans generally have rates and fees comparable to non-guaranteed loans, and often come with continued support to help owners start and run their businesses.
The loans have lower down payments, flexible overhead requirements, and some loans require no collateral.
Our main loan products are 7a, 504, and Microloans:
The SBA’s 7(a) loan program was created to help entrepreneurs who are unable to qualify for a conventional loan gain access to much-needed credit in order to start and grow their businesses. This can be a “make or break” cash infusion to get small businesses doing what they do best: creating jobs and supporting the American economy. Eastern Pennsylvania has seen an uptick in dollar amount and number of no-fee loans under $1M thanks, in part, to the Small Business Boom since President Biden took office.
The 504 loan program provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation. 504 loans are available through Certified Development Companies (CDCs), the SBA’s community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA. The maximum loan amount for a 504 loan is $5.5 million. For certain energy projects, the borrower can receive a 504 loan for up to $5.5 million per project, for up to three projects not to exceed $16.5 million total.
The Microloan program provides loans of up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000. The SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers.
LVB: Of Course, the SBA does much more than help with loans. Tell me about the other services you offer.
Fleming: The SBA is a federal agency created with the mission of helping businesses start, grow, expand or recover from a declared disaster. Today, the SBA provides a wide range of services to small business owners and entrepreneurs to power the American dream of business ownership.
With 68 local SBA district offices across the country, we are uniquely positioned to provide personalized advice and support. We are proud of our role in fostering business growth across the country. If you own a small business, don’t miss out on the resources and services provided by the SBA and our national partners like Small Business Development Centers, Women’s Business Centers, Veterans Business Outreach Centers and SCORE chapters.
The SBA also provides a wide variety of programing and services for small businesses. A sample of these programs include:
The SBA’s 8(a) Business Development program. The 8(a) program is a robust nine-year program created to help firms owned and controlled by socially and economically disadvantaged individuals. Businesses participating in the program receive training and technical assistance designed to strengthen their ability to compete effectively in the American economy.
SBA partners with federal agencies to promote maximum utilization of 8(a) program participants to ensure equitable access to contracting opportunities in the federal marketplace. Once certified, 8(a) program participants are eligible to receive federal contracting preferences and receive training and technical assistance designed to strengthen their ability to compete effectively in the American economy.
The SBA’s T.H.R.I.V.E. Emerging Leaders Reimagined. THRIVE revolutionizes the rich history of executive-level training for small businesses. Sponsored by the SBA, this research-based, executive-level program combines business fundamentals with the innovative tools and competitive strategies needed to deliver immediate results. This intensive program gives ambitious small business owners a challenging opportunity to accelerate their growth through training led by business experts, strategize with professional coaches, and develop connections with like-minded peers.
Since its inception as E-200 in 2008, SBA’s Emerging Leaders has trained more than 8,000 small business owners, creating over 11,000 jobs, generating nearly $1 billion in new financing, and securing over $4 billion in government contracts.
LVB: Anything new on the horizon for the SBA and the services you provide?
Fleming: In addition to the SBA’s traditional products, programs and services, we are working with federal, state, and local partners to ensure small businesses are aware of and geared up to benefit from the Biden-Harris Administrations signature Investing in America (IIA) agenda.
IIA is centered on a few pieces of legislation:
- Bipartisan Infrastructure Law (BIL)
- CHIPS and Science Act (CHIPS)
- Inflation Reduction Act (IRA)
Together, these pieces of legislation are spurring public and private investment in critical sectors such as infrastructure, clean energy, semiconductors, biotechnology.
There are once-in-a-generation resources and opportunities for small businesses coming online over the course of 2024.
As the only federal agency fully dedicated to small business, the SBA has a responsibility to ensure small businesses get their share of Investing in America opportunities. Through this historic, bi-partisan legislation, we are making a ~$1.8 trillion investment in our infrastructure, clean energy, and critical technologies.