Moderator: Catherine “Katy” Crosby , NCRC Chairperson
Speakers: Isabel Guzman Administrator of the U.S. Small Business Administration (SBA)
Transcript:
NCRC video transcripts are produced by a third-party transcription service and may contain errors. They are lightly edited for style and clarity.
Crosby 00:00
We do have some good news. What we’re going to hear instead from the head of the Small Business Administration, Isabel Guzman, the SBA and administrator, SBA and administrator Guzman has been such important partners to so many of us, especially as the local businesses at the heart of our communities fought to survive an unprecedented global crisis. These are ambitious, hardworking folks with a laser focus on their local community. But a lot of the resources available to them involve complex policies operating at the federal level, we serve as the middle of the pyramid, getting people connected and educating them on how these systems work. And that’s why I’m excited. I’m so excited we get to hear directly from someone who’s worked up near the top of the pyramid. Isabel Guzman is the 27th, Administrator of the US, US Small Business Administration. Before President Biden selected her to lead the SBA, Isabel helped guide the State of California’s Office of Small Business advocacy to one of the hardest and scariest periods that small business owners have ever experienced. California made more than 2.5 billion in emergency grants to help small businesses survive the pandemic. That crisis isn’t over, of course, and although Administrator Guzman couldn’t be here in person with us, she wanted to share some perspective and ideas on the role SBA, and all of us play in nurturing the dream of adjust economy through hard times. And the good, let’s watch.
Guzman 01:32
Thank you so much to NCRC for including me, as well as all the member organizations, you all have been lifeline for our small businesses, especially our underserved small businesses, during this time of the pandemic. And I know how much many of these skilled programs to help during the pandemic including working with the SBA, so thank you so much, you know, the NCRC and its members, CDFIs. And other mission lenders across the country, many of them new to SBA were a key part of our historic distribution of PPP, and a network expansion that is really powered up the SBA to better serve our underserved small businesses. And especially as we navigate these challenging times where our businesses need us now more than ever, it gives me great hope for the future and what we can accomplish together. The CDFIs, the CDCs are so key during the Biden Harris administration in our efforts to make sure that COVID Relief got into the hands of those business, it was truly intended to serve those who had high impact. And we’re really in need of connection to some great resources in the community. And as a result of our great work and 2021 96% of our PPP loans went into small businesses with fewer than 20 employees. And we did more in rural and low income areas, and so really focused on trying to shift that relief into the businesses who really needed saving. And I know that now, as a result, SBA has reached more sole proprietors, I 10 holders, and made sure that America didn’t close the door on small business owners with past nonviolent conviction or student loan borrowers who fell behind on their payments. And this was all thanks to the efforts of the Biden Harris administration in our partnership with you. And I see all that is laying foundation and groundwork for future collaboration. You know, with actions taken during the American rescue plan from vaccinations and critical COVID financial relief, we’ve navigated delta and Omicron. And we’re continuing to navigate supply chain disruptions and inflationary pressures.
We’ve experienced the fastest economic growth in 40 years, and the strongest job creation in US history. And of course, small businesses have underlying that great boom that we’ve seen with more small businesses starting in 2021, than any year on record by 20%. And was 5.4 million people decided last year in 2021, to start their business and new and so that gives us great hope for the future as we look to navigate the economic transition, and make sure that we can build a strong, stable economy that really works for our families and small businesses. And my priority is to continue to fuel our economy by giving small businesses the resources and the support that they need to recover, strike, start as well as grow and be resilient. And I know we can do that and accomplish great things in partnership together. Across the Biden Harris administration.
In particular, we are committed to building a better America by shifting from an old, outdated trickle down approach to one that really centers our workers and families and small businesses buy building from the bottom up and the middle class. And small businesses are giants in our economy and We are at the SBA focused on helping to deliver that American dream of business ownership to more Americans. I know firsthand from my own experience in entrepreneurship and coming from a family of entrepreneurs, what an impact it can have on building wealth for families and communities. It’s a critical path to opportunities, and especially right now is we’re looking towards investing in America and building up opportunities for more SBA has scaled and with this new portfolio and had a new focus on making sure that we could create connectivity and build access. And as a result of the efforts that we’ve made in 2021, reimagine MainStreet survey showed that three and four respondents trust the SBA. And I think that’s as a result of the types of partnerships we’ve built, and the types of outreach we’ve done. And so this gives us the historic opportunity to leverage this moment where the SBA has transformed and where we’re coming out of out of this economic cash recovery into transition. To make sure that we can support small businesses into the future.
There have been silver linings of this pandemic. And these are some of them just said, our programs have evolved as a result of of 2021 release, were focused more on creating simple streamline processes as well as leveraging technology. And as example, we delivered nearly 4 million loans for 378 billion directly through our COVID idle program. That’s a disaster lending program that has scaled to support communities for the last 60 years. But importantly, we looked at it from a perspective of meeting our businesses where they are to support them with the relief they need same across our other relief programs like the restaurant revitalization fund reforms in PPP 2021. And so our portfolio as a result has expanded to better serve the smallest of the small businesses. Another silver lining during this time has been that we broadened our partner network, that expanded lending network, which includes so many of you in the room grew to over 5000, during PPP, and we know that that’s how we were better able to reach more of our small businesses. We’ve also added other types of networks like the community navigator pilot program that allows us to provide technical assistance to help small businesses from underserved communities navigate and connect to SBA resources and local resources. I know that with simple products focused on customer experience, technology, and expanded partnerships that we can meet businesses where they are, and we can never forget who those customers are, you know, the face of entrepreneurship is changing. As I mentioned, all those new startups in 2021, were continuing to see that those new startups are people of color and women, they are leading the way. However, those same multi generational capital gaps and opportunity gaps do persist or small businesses and underserved communities. We know that black owned businesses are more likely than white owned firms to get funds to get funds online instead of from banks and Latino owned businesses as well. You know, we know that it’s, it’s continually a challenge for a women to access capital, as well as veterans in rural communities. So it’s really important that we partner together at the SBA to ensure that emerging and aspiring entrepreneurs can access the resources. I’ve met so many small businesses who have shared with me their growth plans, and as well shared with me those challenges in getting funding, you know, whether it was a win of a government contract and an inability to get funding to expand and grow with that contract, or an opportunity to change product mix and get into a new distribution method, but lacking some capital to really underline that strategy. And so, at the SBA, we know and recognize that capital is king, particularly the small dollar loans that our smallest businesses and our emerging startups need. And that’s where we’ve seen that decline and where we’re working hard to reverse those trends. And I know that many of you are familiar with a recent step that we made administratively, we’re looking at everything we can to simplify our products, as I said, and better leverage technology. And of course, we recently announced with Vice President Harris, that we’re extending expanding and overhauling the SBA community advantage pilot loan program. And that’s basically to simplify eligibility and underwriting and open up this potentially significant source of affordable capital for aspiring entrepreneurs and partner with more of those PPP lenders that were new to the SBA. So we look forward to many of you leveraging this new program applying to become a community advantage lender in the coming days to ensure that we can strengthen the partner ship, which we know is of interest too many of you.
We’ve worked of course closely within CRC, it’s been a vital source of guidance in our effort to overhaul at Community Advantage Program and build it up to strengthen it for the future. And of course, as we look towards the future of SBA continue to expect similar types of changes. We’re looking at the full two toolkit of how we can transform our capital programs, to better partner with expanded networks, and to better serve businesses. We know they’re structured differently, they have, you know, especially for underserved communities need more flexible eligibility and underwriting criteria. And so we are striving to make sure that the SBA of the future really meets their needs so that we can continue to build on this strengthened economy, and the type of output that we expect to see as we invest more in America and American small businesses. SBA continues to support our small businesses, as we navigate this pandemic, and the continued effects of inflation and supply chain. And we look forward to partnering with many of you to make sure that we can build those relationships. And that you can leverage our expanded networks as well. We’ve increased our Women’s Business Centers at HBCUs by three times recognizing that black and brown women founders are those those starting businesses at the highest rates, as well. We’ve invested in community navigator through American rescue plan to make sure that there are trusted local organizations on the ground, working to build up capital readiness across our small businesses. You know, with with the changes that we’re making in our capital programs, with this expanded network, focused in underserved communities, we know that we’ll be able to better serve small businesses of today and tomorrow, as they look to continue to survive and grow and thrive into the future and build resilient businesses.
So just know that we look forward at the SBA to continuing our partnership with the NCRC. We value your work we value the work that you do and communities and look forward to the future that lead with Mission lenders focused on healthy or underserved small businesses overcome capital gaps.
Thank you so much for your time.
