Biden’s New “Build Back Better” Framework May Lead to SBA Loan Boost
On October 28, 2021, President Biden announced his administration’s new “Build Back Better” Framework, which was intended to assist in the drafting of legislative language of the Build Back Better Act.
According to the administration, “the Build Back Better Act will be: the most transformative investment in children and caregiving in generations; the largest effort to combat climate change in American history; and the biggest expansion of affordable health care coverage in a decade.
Although there still a significant amount of debate on the Congressional side as to what this bill might look like, on September 9, 2021 the House Small Business Committee announced that they had “approved legislation to deliver $25 billion in funding to invest in small business programs.”
The committee’s proposed use of this funding includes investments in “Small Business Administration (SBA) programs that increase access to capital, foster entrepreneurial development, expand federal procurement opportunities, and drive innovation.”
Specifically, the committee announced that the legislation includes the following investments:
$35 million in funding for veteran federal procurement entrepreneurship training
Over $1 billion in funding for an uplift accelerator program and business development academy at Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) for underrepresented small businesses
Provides $1 billion to establish a national network of business incubators
$20 million to enhance the SBA’s Office of Native American Affairs
$9.5 billion to establish a subprogram within the Small Business Investment Company program to provide patient capital to underserved markets and small manufacturers
$600 million to enhance, improve, and expand the SBA’s Community Advantage program
$4.465 billion to fund a direct loan product under the current 7(a) lending program administered by the SBA
$500 million to fund a pilot program for eligible cooperatives and employee-owned businesses to receive SBA loan products without the requirement of a personal or entity guarantee
Invests $2.746 billion to establish a direct lending subprogram under the 504/CDC lending program to allow CDCs to make loans to small contractors, small manufacturers, and small businesses in underrepresented markets
Over $100 million to invest in entrepreneurial training initiatives for the formerly incarcerated
For questions or concerns over how this new legislation could affect your financial institution, contact Kennedy Sutherland.