The rise of black women-owned businesses helped the US Small Business Administration post double-digit dollar earnings this year in loan approvals for these businesses.
The SBA’s 7 (a) loan program, the agency’s main and most common loan program, approved 696 loans for just over $ 166.7 million for African-American businesses, an increase of 3% in the number of loans and a 20% increase in the dollar amount in fiscal year 2018 from 2017. Businesses can use loans from this program for several purposes, including working capital, acquisition of land or the purchase of equipment.
Additionally, the SBA approved 34 loans for $ 16.6 million for black women-owned businesses, down slightly from 36 loans, but up 36% in dollars under the 504 loan program. of the agency. This program provides businesses with long-term, fixed-rate financing that can be used for purposes such as purchasing land and purchasing or upgrading existing facilities.
Businesses started by black women have grown rapidly for decades. According to State of Women-Owned Enterprises Report 2018, commissioned by American Express, the number of women-owned businesses increased by almost 3,000% since 1972. The report analyzed trends in women’s businesses, including businesses owned by black women, based on the 2012 survey of business owners, and annual estimates of gross domestic product. And the SBA benefits from contributions from black entrepreneurs.
“While data on minority loans by SBA-approved lenders is reported on a voluntary basis, our current results show a year-over-year increase since 2015 in the number of loans and dollar volume granted to African businesses. American, “said Bill Manger, partner of the SBA. Administrator for the Office of Access to Capital. “In addition, a strong economy supported by tax cuts and the President’s deregulation program allows many lenders to provide capital on conventional terms and without the need for a government guarantee. The SBA is committed to ensuring that all eligible small businesses have access to capital at reasonable rates and terms. “
The SBA guarantees small business loans, provided through SBA-approved financial institutions, such as banks, credit unions, and micro-lender intermediaries. The SBA does not provide direct loans to small businesses, but rather guarantees a portion of the loan so that the capital can be extended to a small business. The guarantee of the SBA is that the government will reimburse part of the loan to the lender.
The SBA has just recognized October as National Women’s Small Business Month, honoring countless female small business owners who have pursued their passion by entering entrepreneurship. The SBA said women are a driving force in the country’s economy, starting most new businesses. The agency says women own 9.9 million businesses that employ more than 8 million people and provide employees with $ 264 billion in wages.
“I am truly excited about the milestones being celebrated on behalf of women business owners in our country, and the progress that continues to be made for them,” SBA Director Linda McMahon said in a statement. “At the SBA, we stand up for women entrepreneurs who still face many obstacles. We can do more by providing the tools and resources to start or grow a small business and employ more Americans.
In addition, black-owned businesses, those owned by black women and men, contribute to the prosperity of the SBA loan program.
The SBA announced its loan numbers for fiscal 2018 on October 15, revealing that the agency had guaranteed more than $ 30 billion to small businesses that would otherwise not have had access to capital. The activity included more than 72,000 approved loans.