The Small Business Administration”™s impact on businesses over the past two years would be difficult to overestimate.
The Connecticut District Office of the SBA recorded over $368 million in lending to small businesses through more than 768 traditional loans during fiscal year FY2021 (October 2020 to September 2021) ”“ its highest volume in over five years.
Among the newly released data:
- $294 million in 7(a) loans supported 632 small businesses. The highest approved 7(a) loan volume in the past five years (FY 2017-2021) represents a 78% increase over $165 million in volume for FY2020.
- $71 million in 504 loans supported 86 small businesses. The highest approved 504 loan volume in the past five years (FY2017-2021) was a 79% increase over $40 million in volume for FY 2020.
- $1 million in Microlending Loans funding supported 41 small businesses.61% of microlending loans went to underserved communities including Asian-Owned, Black-Owned and Hispanic-Owned Small Businesses.
In addition, Connecticut SBA District Director Catherine Marx told the Business Journal that, for the calendar year through Nov. 18, her office has approved 37,240 Economic Injury Disaster Loans (EIDLs) for $3,179,175,608, part of the national total of 3,840,296 loans approved for $298,884,122,084.
Furthermore, Marx said, her office has approved 3,915 Targeted EIDL Advance grants (of up to $10,000 per applicant) totaling $33,571,000 (part of the 465,366 grants for $4,044,786,000 nationwide) as well as 3,011 Supplemental Targeted Advance grants (for a maximum of $5,000) for $15,055,000 (part of the 372,487 grants funded for $1,862,435,000 in the U.S.).
“Two years ago the CT SBA had a portfolio in the hundreds of millions of dollars,” she noted.
Marx also noted that the deadline for applying for all three programs is Dec. 31, “or when the funds are exhausted. People should know that the loan applications take some time. I”™m encouraging them to get their applications in by Dec. 10 so they can be processed before the end of the year.”
Meanwhile, the successful PPP program was “a real lifeline” to innumerable businesses, she said.
“There isn”™t a day that goes by when I”™m walking down a Main Street with a small business, whether it”™s Darien, Bridgeport or West Hartford that somebody doesn”™t come up and tell me how important the PPP loan program was,” she said. “I”™ve heard many times that, ”˜Without that program, I wouldn”™t be here today.”™”
Marx also credited the SBA”™s “resource partners,” particularly banks and other lending institutions, for stepping up to the plate during the pandemic”™s darkest days.
If there has been a shortcoming in the SBA”™s approach, she said, it has been with minority-owned businesses and traditionally underrepresented 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 make 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 being made in its traditional lending programs, Marx said that the agency is “acutely aware of gaps that persist for certain communities in accessing capital.”
Over the past five years, loans issued to the smallest borrowers through the SBA-backed 7(a) loan, Express and Community Advantage initiatives fell by over 45%, she continued.
Marx noted, however, that Federal Deposit Insurance Corp. (FDIC) data on commercial small-business lending by regulated banks also shows an overall 3% decline ”“ equal to about 600,000 loans ”“ for loans of under $100,000.
That lack of small-dollar loan appetite from lenders has led to disproportionate impacts on minority business owners, she continued. Firms with non-Hispanic Black ownership and firms with $100,000 or less in revenues were only half as likely as firms with non-Hispanic White ownership to obtain bank funds, with Latinx-owned firms at a similar disadvantage.
Marx further said that fully understanding the ramifications of the pandemic “will take years to ripple through” the business community.
“Our grants and programs will still have a very important part to play in the small business ecosystem in 2022 ”“ and beyond,” she added.
