SBA Administrator Isabella Casillas Guzman said the Small Business Administration has strengthened its relationship with community banks by increasing its number of preferred lenders and helping bankers navigate a sometimes complicated lending process.
Guzman’s Aug. 16 comments came during a roundtable in downtown St. Paul as part of a nationwide tour intended to highlight the nation’s economic recovery from the pandemic and emphasize the importance of vaccinations to ensure further growth. The roundtable included Mayor Melvin Carter, Minnesota Department of Employment and Economic Development Commissioner Steve Grove and 4th District U.S. Rep. Betty McCollum (D-Minn.)
To Guzman, Minnesota’s economy has done “incredibly well” with statewide vaccination rates hitting 70 percent. “That’s really what is going to help our businesses,” she said of vaccinations.
Guzman noted that during the pandemic, the number of SBA preferred lenders has increased to more than 5,000. Sparked by continued lending through the Paycheck Protection Program and other pandemic-era stimulus efforts, the SBA’s fiscal-year-to-date 7(a) volume last month topped $20.95 billion, 34 percent higher than the same period in 2020. The increase came after Congress approved funding for a third round of PPP lending in late December as part of the $900 billion Covid-19 relief bill. Congress waived user and borrower fees and provided funding to cover several months of payments for new borrowers, part of the government’s pandemic-related stimulus effort.
“That platform has been very successful,” Guzman said.
Guzman said the more than $806 billion in PPP funding allocated through this spring “was very effective” in providing a crucial initial lifeline with “some key gaps.” She added that in late July, the SBA announced it would launch a streamlined application portal Aug. 4 to accept PPP loan forgiveness applications directly — bypassing lending institutions — for loans of $150,000 or less.
Guzman spoke of a bill introduced by 2nd District U.S. Rep. Angie Craig (D-Minn.) that would increase the Financial Services and General Government appropriations bill to $29.1 billion, an increase of $4.8 billion from 2021. One of the bill’s goals would be to assist small businesses and entrepreneurs through the SBA and Community Development Financial Institutions. To Guzman, such work is essential as the U.S. seeks to introduce more domestic manufacturing.
Guzman said a key need for the SBA is adjusting to the growing number of women and people of color entrepreneurs, adding that not doing so places the U.S. at a global disadvantage.
To Guzman, many small businesses are now positioned for growth opportunities, including contractors and innovators. Carter said that in St. Paul, many small businesses were initially struggling for survival during the pandemic, a situation that has since improved. He said that shift has warranted a change in the city’s approach from all-consuming to one that is “honed” for businesses still fighting to make it.
Guzman has served as administrator since March. Previously, she was director of the California Office of the Small Business Advocate, a position she held after being appointed by Gov. Gavin Newsom in April 2019.
Following her visit in St. Paul, Guzman toured small businesses in northeast Minneapolis and the Lake Street area before ending the day in Burnsville with a roundtable event involving U.S. Sen. Amy Klobuchar (D-Minn), Craig and fellow Democrat Dean Phillips, who represents Minnesota’s 3rd congressional district