As we wind down the holiday season and 2022, I’d like to take a moment to reflect on a new report released by the US Small Business Administration and our Administrator, Isabella Casillas Guzman. As Regional Administrator for New England, I was honored to be appointed to this position by the President a year ago to work closely with local, state and federal businesses and officials. to get us out of the pandemic.
I want to thank our incredible SBA workforce and resource partner teams for the extra hours and dedication they have invested in helping the backbone of our economy, small businesses. More than 90% of businesses in New England are small, and these businesses employ more than half of the workers in our region. In addition to their role in job creation, small businesses support our communities and unite our region and our nation.
Through great effort and innovation, the SBA has reached nearly $43 billion nationwide in financing for small businesses, providing more than 62,000 traditional loans through its 7( a), 504 and micro-loans, and more than 1,200 investments through SBA-licensed small business investment firms. for fiscal year 2022. This is significant news. As Administrator Guzman said, “While continuing to manage billions in COVID relief, the SBA also provided record loans in FY22, helping tens of thousands of entrepreneurs across our country to secure the financing needed to start, grow and build resilient businesses.”
Here in Vermont, the SBA has supported $72 million in financing for small businesses through our traditional lending programs. During the year, we welcomed two lenders to our SBA lending family. In December, Vermont’s newest microlender, Brattleboro Development Industrial Corp., successfully disbursed $165,000 to underserved microbusinesses after only a few months of fully operational microlenders. The New England Federal Credit Union, Vermont’s largest financial institution with more than 95,000 members, also became an SBA lender this year. Our lending partners are in their communities, reaching small businesses where they are and helping them get the support they need to thrive in today’s uncertain climate.
We have seen record numbers of businesses start up, stronger than expected economic growth, near historic low unemployment rates and the recovery of all the jobs lost during the pandemic and more. In New England, $2 billion in funding through our base lending programs has been invested to help stimulate our regional economy. The foundation built by the SBA and this administration through basic services, the US bailout, the Bipartisan Infrastructure Act, the CHIPS ACT, the Inflation Reduction Act and many more will serve our economy well at the dawn of 2023.
In 2023, we will see improvements in our veteran-owned business certification processes. I had the honor of convening the first-ever New England Veterans’ Small Business Symposium. Additionally, greater prioritization of equity to level the playing field for small businesses, access to capital, more opportunities for government contracts, expansion of international sales opportunities, and increased effort in our underserved and rural communities are all on the agenda for 2023.
As we continue to look to the future, we will work to reduce costs for those in need of relief. The SBA has reduced 7(a) fees to zero for participating borrowers and lenders on loans up to and including $500,000. And Administrator Guzman and the agency are closing systemic gaps in access to capital for smaller, underserved businesses by expanding the Community Advantage program to increase the number of mission-based lenders and by providing guidance that streamline eligibility and underwriting requirements to simplify the granting of small loans under the program.
Additionally, as a top priority for fiscal year 2023, the SBA is proposing regulatory reforms to its membership and other rules to deliver the same streamlining it created through Community Advantage under the program 7(a). He also proposed a rule change to increase the number of permanent small business specialty lending companies in the program, helping to identify and close market gaps so that far too many underfunded small businesses fail.
Finally, diversifying and broadening the scope of private investment in FY2023 is a priority: proposed reforms are expected to come into effect to address the structural aspects of the public-private investment partnership of the SBA, the Small Business Investment Company program, which has historically limited the flow of licensed SBIC capital to small businesses and startups that are not adequately funded by private markets alone. The goal is to increase the number of new fund managers, diversify funding strategies and private funds focused on equity investments in the SBIC program so that small businesses and startups, especially those in communities and Underserved geographies, capital-intensive industries, and undercapitalized technologies critical to national security can more easily access private capital.
Here at SBA, we strive to make the American dream of business ownership a reality. The partnership and the work of 2022 serve us well to launch the ambitious 2023 program described above. Our small businesses are the engine of our communities. In the remaining days of this year, I encourage you to consider shopping and eating at local establishments the remainder of this holiday season and whenever possible. Buying small and eating local helps our job creators, stimulates our local economies and enriches our neighborhoods on a daily basis.
Mike Vlacich is the New England Regional Administrator for the US Small Business Administration. The views here do not necessarily represent those of Vermont News & Media.