The recent announcement at the Opportunity Finance Network (OFN) annual conference revealed the U.S. Small Business Administration (SBA) has permanently instated the mission-lending Community Advantage Program. This follows the introduction of 143 Community Advantage Small Business Lending Companies (CA SBLCs), aimed at sustaining the mission of assisting underserved business sectors.
The Community Advantage Program, which began as a pilot initiative under the Obama-Biden administration, was set to conclude in 2022. However, recognizing the program’s importance in addressing capital barriers, especially faced by women, veterans, individuals of color, and businesses in rural and LMI (Low and Middle Income) communities, the current administration extended its lifespan. Now, with the impending sunset of the Pilot Program on October 31, 2023, the CA SBLCs will assume a permanent role in the SBA lending landscape.
SBA Administrator Isabel Guzman emphasized the profound need for such initiatives, stating, “Access to capital remains the greatest barrier for entrepreneurs looking to add jobs or start and grow their businesses – especially women, people of color, veterans, and rural and LMI communities,” Guzman further highlighted the administration’s focus on underserved markets, noting that these entrepreneurial communities are crucial to powering America’s economy. She added, “As a result of our transformative regulatory reforms, the SBA has now made permanent and expanded its number of mission-driven lenders in Community Advantage SBLC to over 140 strong. These lenders will help fund and power our nation’s small business boom and ensure small businesses can benefit from the President’s Invest in America economic agenda.”
Echoing Guzman’s sentiments, Harold Pettigrew, President and CEO at Opportunity Finance Network, lauded the SBA’s commitment to revitalizing an underutilized program and addressing capital discrepancies that have long plagued numerous entrepreneurs.
For small businesses, particularly those operating in traditionally marginalized sectors, this move can be seen as a beacon of hope. The Community Advantage Loan Pilot Program, during its tenure, significantly scaled its operations under the Biden-Harris leadership. Notably, it lent over $141 million in the fiscal year 2023, witnessing a substantial surge from $86 million in FY20.
The program’s primary objective has been to cater to businesses that have historically faced challenges in securing capital due to various systemic barriers. With the support of Community Advantage lenders, the Pilot Program has notably amplified its lending to Black and Brown borrowers, reinforcing the administration’s commitment to achieving equity in business opportunities.
As the nation strives to rebound from economic challenges and seeks to foster an environment where businesses from all backgrounds can thrive, the permanent establishment of the CA SBLCs by the Biden-Harris administration marks a pivotal step in leveling the entrepreneurial playing field.
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