The impact of the Small Business Administration on businesses over the past two years would be hard to overestimate.
The SBA’s Connecticut district office recorded more than $ 368 million in small business loans through more than 768 traditional loans in fiscal year 2021 (October 2020 to September 2021) – its highest volume in more than five years.
Among the recently published data:
- $ 294 million in 7 (a) loans supported 632 small businesses. The highest 7 (a) loan volume approved in the last five years (FY 2017-2021) represents a 78% increase over the volume of $ 165 million for FY 2020.
- $ 71 million in 504 loans supported 86 small businesses. The highest approved 504 loan volume over the past five years (FY 2017-2021) was a 79% increase from the volume of $ 40 million for FY 2020.
- One million dollars in microcredit financing has supported 41 small businesses.61% of microcredit loans went to underserved communities, including small businesses owned by Asians, Blacks and Hispanics.
Additionally, Connecticut SBA District Manager Catherine Marx told the Business Journal that, for the calendar year through Nov. 18, her office approved 37,240 Economic Disaster Loans (EIDLs) for 3,179 $ 175,608, part of the national total of 3,840,296 loans approved for $ 298,884,122,084.
In addition, Marx said, his office approved 3,915 EIDL Advance Targeted Grants (up to $ 10,000 per applicant) for a total of $ 33,571,000 (a portion of the 465,366 grants for $ 4,044,786,000 to l nationwide) as well as 3,011 additional targeted grants (for a maximum of $ 5,000) for $ 15,055,000 (a portion of the 372,487 grants funded for $ 1,862,435,000 in the United States).
“Two years ago, the CT SBA had a portfolio of hundreds of millions of dollars,” she noted.
Marx also noted that the deadline to apply for all three programs is December 31, “or when funds run out. People should know that loan applications take a long time. I encourage them to send in their requests by December 10th so that they can be processed before the end of the year.
Meanwhile, the successful PPP program was “a real lifeline” for countless companies, she said.
“Not a day goes by that I walk down a main street with a small business, be it Darien, Bridgeport or West Hartford, without someone coming to tell me how important the P3 loan program was,” she said, “I’ve heard it said many times, ‘Without this program, I wouldn’t be here today.’
Marx also credited the “SBA’s resource partners,” particularly banks and other lending institutions, for taking the lead during the darker days of the pandemic.
If there has been a gap in the SBA’s approach, she said, it is with minority-owned businesses and traditionally under-represented communities.
“We work with the Women’s Business Development Center in Stamford and the Women’s Business Development Council in East Hartford,” she said. “Both groups are making a very concerted effort to reach out to women – including minority women – to help them understand the grants and programs that the SBA has to offer.”
Despite the progress made in its traditional lending programs, Marx said the agency is “acutely aware of the gaps that persist for some communities in access to capital.”
Over the past five years, loans to smaller borrowers through SBA-backed Loan 7 (a), Express and Community Advantage initiatives have fallen by more than 45%, she continued.
Marx noted, however, that data from the Federal Deposit Insurance Corp. (FDIC) commercial small business loans by regulated banks also show an overall decline of 3% – or about 600,000 loans – for loans under $ 100,000.
This lack of lenders’ appetite for small loan amounts has resulted in disproportionate impacts on minority business owners, she continued. Businesses owned by non-Hispanic blacks and businesses with sales of $ 100,000 or less were half as likely as businesses owned by non-Hispanic whites to obtain bank funds, with Latinx-owned businesses being also disadvantaged.
Marx further said that fully understanding the ramifications of the pandemic “will take years to spill over” into the business world.
“Our grants and programs will still have a very important role to play in the small business ecosystem in 2022 – and beyond,” she added.