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The face of entrepreneurship in America is becoming less and less white – and Isabelle Guzman is well aware.

The boss of the Small Business Administration – barely three months in office – is eager to overhaul the federal agency programs to make them fairer and more efficient for all small businesses, especially those that need help the most.

“It’s all on the table,” Guzman said Inc. in a recent one-on-one interview. “For our economy to recover,” she adds, “we need to transform our programs and services to truly meet these companies where they are at.

The pandemic, she says, has exposed key cracks in its continuum of resources and financing for small businesses, which in a typical year supports a $ 40 billion loan portfolio but has gone past. To over $ 1,000 billion in loans and grants since the start of the pandemic.

Here are three changes to the SBA that you’ll likely see while Guzman runs the agency.

1. The credit pool could deepen.

The number of SBA-approved lenders, who support borrowers applying through the agency’s regular loan programs, such as 7 (a) and 504, may well swell.

While over 5,000 lenders have been approved to support Paycheque Protection Program loans, about 1,800 institutions were considered active lenders before the pandemic. (Active is defined as an institution that has provided an SBA loan within the past two years.) In other words, all those fintech companies that rushed to help borrowers without traditional lending relationships during the pandemic weren’t are now no longer allowed to facilitate post-crisis loans. That could change, Guzman says. “Maintaining the kind of reach we’ve achieved through PPP is really a goal. “

2. Better loan terms could continue.

Thanks to the Economic Aid Act, which was passed in December 2020, the lending terms of traditional SBA loans were relaxed to include a temporary cessation of fees and interest, and payment grants up to $ 9,000 until September 30 or while funds are exhausted. The relief efforts also led to a temporary increase in the guaranteed amount of a loan guaranteed by the SBA to 90%. Traditionally, loans up to $ 150,000 were 85% guaranteed by the SBA. Loans over $ 150,000 were 75 percent guaranteed.

Guzman notes that these sweeteners could stick around. “These are obviously key elements of our toolbox, [and we’re] look at guarantees and fees, ”she said, adding that debt relief is also on the table. “We will continue to evaluate [our programs’] impact, and [assess] which ones are best for small businesses, to meet them where they are. “

3. Help is on the way.

It became very clear during the pandemic that some borrowers were given priority by certain lenders because they had existing relationships, while others were just too small to care.

Smaller businesses and those founded by owners less familiar with the banking industry – say, immigrant founders or those located in economically disadvantaged communities – have generally been overlooked as they tend to need help the most. And, because these businesses tended to be smaller, with reduced financing needs, banks tended to make less money. These conditions are true even without a pandemic, but resources should not be only available to those who can afford them. Rather, they should go first to those who cannot, Guzman says. “I asked my staff to look at all of our programs, from design to implementation, and ask the question, is it accessible to everyone? So how do we think about the customer first, being at the forefront of technology and fair in our design and implementation? “

She pointed out the Restaurant Revitalization Fund (RRF), the $ 28.6 billion restaurant business subsidy program, as an important proving ground for a more equitable program. “We have been able to critically address the needs of so many hard-hit small businesses – the smallest of the small ones, as well as those in underserved communities, women, veterans, and socially and economically disadvantaged businesses,” Guzman said. , which notes that more than half of the 362,000 inquiries received by the SBA were from these targeted contractors.

From an implementation perspective, she also praised the RRF’s communication efforts: “The outreach we have carried out – by hosting thousands of webinars – has reached over 100,000 people. “

She is also optimistic that the next Community Navigators program will perform better. Authorized by the American Rescue Plan Act, the $ 100 million program is intended to help community organizations or community financial institutions raise funds to provide outreach, education and technical assistance services to help eligible small businesses gain awareness aid programs and participate in them. It prioritizes increasing access among businesses owned by socially and economically disadvantaged individuals, women and veterans.

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