The Friends of the SBA Microloan Program (Friends Network) is an informal working group of nonprofit SBA Microloan Intermediaries. Its members provide small-dollar loans up to $50,000 and business development resources to help women, low-income, veteran, and minority entrepreneurs successfully create and grow sustainable businesses.
The Friends Network supports economic opportunity for underserved entrepreneurs in rural, suburban, and urban communities across the nation by increasing access to the resources and services necessary to create wealth and build assets through business ownership.
We also advocate for appropriations for the programs that support microlending at the Small Business Administration.
FY 22 Appropriations
President Biden’s 2022 discretionary request includes $852 million for the SBA, a $74 million or 9.4-percent increase from the 2021 enacted level.
“The discretionary request provides a $31 million increase over the 2021 enacted level for SBA Entrepreneurial Development Programs that support women, people of color, and other underserved entrepreneurs.”
As a point of reference, last year’s FY 2021 federal budget enacted for the SBA Entrepreneurial Development program totaled $272 million. This additional funding would bring the total SBA Entrepreneurial Development program to $303 million for FY 2022. This, of course, is the account that includes Microloan Technical Assistance Grants.
FY 2021 Appropriations
In the Consolidated Appropriations Act of 2021, Congress provided record level funding for the SBA Microloan Program. This victory will put the Microloan Program in a positive place for the start of the Fiscal Year 2022 federal budget and appropriations process.
For FY 21 appropriations, the omnibus provided $35 million for technical assistance, a $500,000 increase above FY 20, and $5 million in budget authority, for a total of $55 million in loans.
This historic package for COVID-19 relief included:
- $57 million supplemental for FY 21 and improvements that championed by Senator Duckworth and Senate Small Business Committee Ranking Member Cardin to secure for the Microloan Program;
- Extension of the debt relief program led by Senator Coons that includes $3.5 billion for payment of principal and interest (P&I) on small business loans guaranteed by the SBA under the 7(a), 504 and microloan programs and includes another 8 months of payments for microloan borrowers; and
- Key provisions of the Jobs and Neighborhood Investment Act that includes $12 billion in new CDFI/MDI funding, $9 billion of which will go towards the capital investment program and $3 billion will be made available in grants to eligible institutions and includes Persistent Poverty County language advocated for by the CDFI Coalition to ensure funding is directed to communities that need it the most.
There are a number of the HEROES Act improvements, including increased intermediary loan limits to $10 million through September 2021, and then going to $7 million after that; temporary waivers on TA 50/50 caps; updates to bonus grants; extensions on borrower repayment for 8 years, which then goes to 7 years after September 2021; and additional funds for TA and loans. The law also includes minimum grant thresholds of 25 percent and maximum of 30 percent, based on appropriations. It also offers increased authorization levels of $80 million for TA and $110 million for loans for FY 21-25.
The elimination of 1/55th rule, a longtime priority of the Friends of the SBA Microloan Program remains to be addressed.