If you thought the U.S. Small Business Administration was done doling out disaster loans, you're right--but that doesn't mean the agency is hanging up its jersey.
The SBA will accept applications for Covid Economic Injury Disaster (EIDL) loans until December 31. It will then continue to process the applications after the deadline until funds are fully depleted. While the agency says its Targeted Advance grant is also sunsetting at year-end, it may be unable to process the applications filed close to that deadline "due to legal requirements." Those interested in that program were encouraged to apply by December 10.
But there's still plenty of money at the state level, and if SBA's proposed budget for 2022 is any indication, you can count on additional federal funding opportunities. The agency's four-year strategic plan, scheduled to be released by February 2022, further shows that it will continue lending a hand with pandemic recovery efforts.
Here are three things to expect from the SBA in the new year:
1. Help with securing federal contracts
The Biden administration recently upped its 2022 federal contracting goal among small disadvantaged businesses to 11 percent, from 5 percent. Federal agencies will work with the SBA to set their own contracting goals to achieve this new milestone.
One major driver of this initiative has been the government's dwindling engagement with smaller firms. Though the SBA works with other agencies toward its statutory goal of awarding 23 percent of prime government contracts to small businesses, the number of small businesses within that base continues to shrink, according to a recent congressional memo.
In a bid to increase transparency, the administration recently unveiled federal contracting spending data by race and ethnicity of business owners, and the results are telling. With a few exceptions, large businesses gobbled up a majority of the 559 billion small-business-eligible dollars for federal contracting during funding year 2020. Though it varies by industry, the SBA generally defines a small business as one with 1,500 workers or less and between $1 million to just above $40 million in revenue.
Separately, the recently passed $1 trillion infrastructure deal also extends opportunities to small businesses to access billions in federal, state, and local government contracts in the realm of construction and clean energy. Those contracts could rope in opportunities such as solar panel manufacturing, wind farms, and batteries.
Also ahead? The Biden administration in a recent fact sheet hinted that the SBA may update procurement goals for other businesses--including women-owned and service-disabled veteran owned small businesses, and contractors--located in historically underutilized business zones.
2. Added money for resources
The agency requested $852.4 million in its budget authority for funding year (FY) 2022, a slightly higher amount than the roughly $820 million requested in the past two years. Which means you can expect more resources for counseling, training, and mentoring services, for instance. The request for entrepreneurial development programs is $46 million more in 2022 compared with FY 2021.
Allocating additional funds for the agency's staffing needs may help alleviate some of the customer service and processing glitches the agency encountered during the pandemic, issues SBA administrator Isabel Guzman confirmed at a November congressional hearing. The agency is already making strides. While plenty of business owners have complained about slow processing speeds, getting locked out of the Covid EIDL program, and problems with the agency's automated approvals system, the SBA says it had cleared its backlog of more than 600,000 applications by September. Also by September, the SBA boosted its application processing to 37,000 applications per day, up from daily processing of 2,000 applications.
For now, the agency is operating under the recently passed Continuing Resolution (CR) until February 18, 2022, which appropriates an amount of the previous fiscal year's funds until Congress passes another CR or a full-year appropriation.
3. Elevation of women-owned businesses
In early December, Guzman shared that the agency will raise the profile of its Office of Women's Business Ownership (OWBO) by having that department report directly to the Office of the Administrator. As of now, the OWBO is nested in the Office of Entrepreneurial Development. Though the agency is still in the early stages and isn't expected to finalize anything until the end of the next fiscal year (ending September 30, 2022), OWBO assistant administrator Natalie Madeira Cofield will immediately report to Guzman.
Plenty of work remains in achieving gender parity, something that the Biden administration has earmarked as a priority in its National Strategy on Gender Equity and Equality report. Access to resources, opportunity, and capital remain a challenge for female entrepreneurs, obstacles already compounded by strains from the pandemic. Women have exited the workforce at a far higher rate compared with men during the pandemic, in part because of child care and elder care needs.
Still, some commendable strides are already apparent. The number of women-owned businesses skyrocketed by nearly 3,000 percent over the past half-century, up to around 12 million to date. The number of Women's Business Centers--which offer resources from counseling and training to business development assistance--also reached a record of 140 locations across the country.