SBA Looks To Build On Momentum In 2011
As we close the door on 2010 and look forward to a new year, we at the U.S. Small Business Administration are collectively taking great pride in our accomplishments over the past 12 months while gearing up to do more to help America’s small businesses create the jobs that will turn the economy around.
While the economy is not where we want it to be, the positive trajectory in 2010 was notable. In each of the past 12 months, the private sector created net new jobs and the economy grew for five consecutive quarters in a row. And just this past December, the private sector added 297,000 jobs, with almost all those gains coming from small businesses. This after the economy was shrinking at a rate of 6.8 percent when President Barack Obama came into office. But much more needs to be done to get more Americans back to work.
Capital Concerns
With funding under the American Recovery and Reinvestment Act, the SBA supported $30 billion in loans to 70,000 small businesses which would not have received credit otherwise. In Massachusetts, the SBA supported $679 million in loans with $42 million going to small businesses in Worcester County. These Recovery Act loans provided a lifeline to small business owners who found they couldn’t negotiate traditional loans with banks.
Building on the success of the Recovery Act’s SBA provisions, on Sept. 27, 2010, Obama signed the Small Business Jobs Act of 2010. The provisions in this bill give small business owners and entrepreneurs the necessary tools to start or expand their small firms in 2011. An early indication of its success is that in the last quarter of 2010, the SBA supported $12 billion in loans nationally, the highest level of SBA’s guaranteed lending in a single quarter. In Massachusetts, loan volume was up 74 percent over last year.
The jobs legislation gives us more tools to help small businesses grow. The law permanently increases the SBA’s loans limits from $2 million to $5 million, increases SBA’s micro-loan limits from $35,000 to $50,000 and, in support of our exporters, it increases our Export Express loan limit to $500,000 with a guarantee up to 90 percent for loans under $350,000. The law also provides several temporary changes such as increased loan sizes up to $1 million for working capital and allows for real estate refinancing under our 504 program.
These changes give small business owners the opportunity and the flexibility to grow their ventures bigger and better by creating an environment that will encourage and stimulate more employment opportunities. These changes will give lenders the incentive to make more credit available to small business owners in 2011.
Access to credit, however, is not the only ingredient for businesses to grow. Many small businesses also need business advice, contracting opportunities to sell their goods and services to the largest buyer in the world — the U.S. government — and a tax environment that encourages growth and investment.
The Jobs Act addresses these needs by providing increased funding for free counseling through our network of Small Business Development Centers, competitive grants to provide export counseling services, clarity and new guidance on small business contracting set-asides, and eight new tax cuts on top of the eight earlier tax cuts initiated by the Obama administration. These cuts are designed to help small businesses invest in their firms and create jobs.
With more tools available to small businesses this year, SBA staff will continue to work tirelessly to support American’s small business community. We may not be where we want to be, but I am confident that we have turned the economic corner.
Jeanne A. Hulit is the New England regional administrator of the U.S. Small Business Administration.
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