Statement:
Expand access to capital by adding 325 new and returning lenders to SBA’s flagship 7(a) program each fiscal year in FY2014-2015.
Description:
Providing access to capital has been one of the SBA’s critical strategies in meeting its objective to drive business formation, job growth and economic expansion particularly in underserved markets since the agency was created in 1953. By providing loan guarantees to reduce lenders’ loss exposure, the SBA provides an important credit lifeline to small businesses, especially startup businesses and businesses owned by women, minorities, veterans and other underserved groups who often cannot easily obtain credit in the conventional market. In the current economic conditions, SBA loan programs become even more crucial for ensuring that small businesses are not only surviving but also leading the way toward economic recovery and growth, as they have done time-and-time again throughout U.S. history.
SBA will increase small business access to capital by increasing the number of new or returning lenders in the fiscal year for the flagship 7(a) program (including the Community Advantage pilot program). New and returning lenders are a major component of SBA’s lending portfolio and are essential to growth in the quantity of loans approved and small businesses assisted. Each new or returning lender will expand SBA’s footprint and increase small business access to capital. Attaining a high volume of new and returning lenders from one fiscal year to the next will create a consistent pipeline of SBA loans into the hands of small business.
There are barriers and challenges to the SBA in achieving its priority goals:
- Economic Trends; micro and macro
- Issues within the Finance Industry as a whole
- Shrinking workforce in field offices which provide training
- Recent cases from the OIG reviewing SBA lenders underwriting criteria have triggered a more cautious approach from some lenders with some loan guaranty types
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Statement:
Maximize small business participation in federal government contracting to meet the statutory goals and reduce participation by ineligible firms.
Description:
Congress has mandated that small businesses receive 23% of federal government prime contracting dollars, including 5% of prime and subcontracts to Small Disadvantage Businesses; 5% of prime and subcontracts to Women-Owned Small Businesses; 3% of prime and subcontracts to HUBZone Small Businesses; and 3% of prime and subcontracts to Service-Disabled Veteran-Owned Small Businesses
Meeting and exceeding the federal government’s small business procurement goals continues to be an Administration priority. Federal contracting with small businesses is a win-win. Small businesses get the revenue they need to grow their businesses and create jobs, and the federal government gets the opportunity to work with some of America’s most innovative and nimble small businesses, often times with a direct line to the CEO.
In FY 2012, the federal government made real progress toward the 23 percent goal, with 22.25 percent or $89.9 billion in federal contracting dollars going to small businesses compared to 21.65 percent in FY 2011, with significant impact in key areas:
- For the first time, more agencies than ever before met or surpassed all of their prime contracting goals.
- Also, for the first time, the federal government exceeded the goal for service disabled veterans.
- The federal government had the highest percentage of contracts going to Small Disadvantage Businesses to date.
As a result of a government wide focus on increasing small business contracting opportunities, during President Obama’s first term (FY2009 - FY2012) the federal government awarded $376.2 billion in federal contracting dollars to small businesses. This is a $48.1 billion increase over the four preceding years even as we have seen reduced spending overall.
Also, since President Obama took office, the SBA has supported more than $132.61 billion in Federal government contracting dollars to small disadvantaged businesses. This represents a 36.6 percent increase when compared to the prior Administration. Under the Bush Administration’s first term, $97.10 billion in federal government contracting dollars were awarded to small disadvantaged businesses.
Although we have seen marked success over the last few years, we know more must be done. Many challenges exist for small businesses seeking to enter the federal procurement marketplace.
- The unpredictable and changing budget climate is a challenge for small businesses, and SBA is working hard to create an environment where small businesses can be successful in the federal procurement marketplace.
- The instability and ambiguity caused by Continuing Resolutions make it difficult to agency acquisition staff to plan effectively for small business utilization.
- Entering the federal supply chain can often be a lengthy and arduous process for many small businesses.
SBA’s GCBD unit must implement effective and efficient strategies to monitor the agencies’ progress to goal, support small businesses interested in working with the government and encourage agencies to improve data quality when reporting their contracting activities. SBA will increase its efforts to collaborate with and hold federal agencies accountable to achieving their goals.
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