CEO at Government Office Furniture and Manhattan Office Design. Inc 500 Fastest Growing Companies in America.
The Small Business Administration (SBA) has been supporting the U.S. small business economy for 70 years, and since we celebrated its 70th anniversary in July, it’s important to recognize its crucial role.
Personally, my small business has greatly benefited from the SBA. During the pandemic, in a time when running a business could be perceived as a daunting challenge, they provided us with PPP loans and helped us to apply for government contracts as a certified minority-owned business. This made the toughest times endurable and gave us the resilience to carry forward into the future.
Unfortunately, many believe the current state of the SBA fails to meet the needs of today’s small businesses. According to a 2023 survey by Goldman Sachs’s 10,000 Small Businesses Voices (a community of which I am a member), “70% of small business owners in the U.S. give the federal government a ‘C or below’ grade for effectiveness of its programs, services and tax credits available to small businesses.”
Almost all small businesses (96%) believed the federal government should be doing more to tailor programs and services to better reflect their realities and needs. One important way to accomplish that, according to 94% of entrepreneurs, is for Congress to join a bipartisan effort to modernize the agency.
Since the SBA just celebrated its 70th anniversary, there couldn’t be a more fitting time to reauthorize and modernize the SBA. Surprisingly, according to a report from 10,000 Small Businesses Voices, Bipartisan Policy Center and BPC action, the agency has not received a comprehensive upgrade in about 23 years, which amounts to about one-third of the SBA’s lifetime. While other government agencies undergo frequent reauthorization, the SBA has been left with outdated tools that no longer serve the small businesses of today. As the report explains, small businesses are facing several challenges that should be addressed:
1. Difficulty accessing capital programs: There are financing gaps based on business age, loan size and location, with women business owners, business owners of color, rural small businesses, and underserved groups facing even greater obstacles.
2. Inefficient federal procurement process: Federal agencies often fall short in meeting their own goals of awarding contracts to women-owned and veteran-owned businesses. Furthermore, the procurement application process is notoriously tedious and confusing.
3. Outdated technology and entrepreneurial programs: The current programs are not useful for all small businesses, and technology, communication and marketing efforts are outdated.
The report shared several recommendations for addressing these challenges and modernizing the SBA for today’s small business owners that “aim to improve access to capital and address financing gaps, particularly for business owners of color, women, veterans, and those in rural areas.” They also focus on “increasing small business participation in government contracting by simplifying certification processes and streamlining contracting opportunities.”
Additionally, the recommendations include modernizing “entrepreneurial development and counseling options, including leveraging technology, updating programs, and implementing strategic marketing to ensure businesses are aware of and can take advantage of available offerings.”
Fortunately, it appears Congress is listening. In July, the U.S. Senate Committee on Small Business and Entrepreneurship held a hearing on bills regarding improvements to the SBA, paving the way for full Senate consideration.
What can business leaders do to help?
To my fellow business leaders, we have a unique role to play in addressing the challenges of the Small Business Administration (SBA). One crucial step we can take is to rally support and raise awareness among our fellow business leaders in our communities. By sharing our experiences and the impact the SBA has had on our own businesses, we can help others understand the importance of reauthorization and modernization.
As business leaders, we can leverage our networks and platforms to amplify the message of success stories like mine. By using our social media presence, industry conferences or business publications, we can share articles, videos and personal testimonials that not only highlight the importance of updating the SBA but also showcase the tangible impact that thriving businesses can have on their communities.
By utilizing our collective reach and influence, we can create a groundswell of support that reaches decision-makers at all levels of government and spurs them into action. Remember, the power of our collective voice is immense, and by uniting for a common cause, we can drive the necessary changes to empower small businesses across the nation.
While we have much to celebrate as the SBA reaches its 70th anniversary, it’s essential to advocate for adaption and improvement so the agency can propel small businesses into the next 70 years of success.
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