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OFN participated in a task force convened by the Bipartisan Policy Center to provide feasible recommendations to the SBA to better support entrepreneurs and small businesses.
The pandemic underscored the resiliency of small businesses and entrepreneurs, as the Small Business Administration (SBA) rushed to aid millions of small businesses impacted by a dramatic halt in daily life. The SBA turned to CDFIs to support the disbursement of PPP loans, getting emergency capital to the communities and businesses where it was needed most. However, the financial crisis and response exposed challenges and outdated practices that made it difficult for the agency to act quickly and access overlooked communities across the nation.
To address the need for modernization, the Bipartisan Policy Center convened the Task Force on the Future of SBA to provide recommendations for the administration that reflect the needs and circumstances of small businesses and entrepreneurs in the current environment.
The task force is made up of diverse members and perspectives, including former SBA officials, leaders at financial institutions, small business owners, and advocates. OFN Executive Vice President for External Affairs Dafina Williams and OFN Board Member Robert Villarreal are among its members.
“I deeply appreciate the Bipartisan Policy Center for organizing leaders across the small business lending space to put forth commonsense reforms to the Small Business Administration,” said Dafina Williams, OFN’s executive vice president for external affairs. “It was a truly collaborative effort of the task force to develop recommendations that unlock greater access to capital and support the growth and development of our nation’s small businesses.”
The recommendations highlight three distinct areas of focus for the SBA to better support small businesses and stimulate the post-pandemic economy:
- Access to capital
- Awareness, marketing, and customer service
- Entrepreneurial development
The three categories, which came out of lessons learned from the pandemic, encourage changes to SBA resources and how they reach small businesses. For example, the report suggests that advanced digital tools would help to expand credit access for underserved or hard-to-reach populations. Awareness, marketing, and customer service recommendations are intended to increase knowledge of SBA resources and minimize barriers to entry. To support entrepreneurial development, the task force recommends the SBA analyze the effectiveness of current technical assistance and counseling programs and update them to better reflect and support the needs of entrepreneurs.
Just after the report’s release, on July 19, the U.S. Senate Committee on Small Business and Entrepreneurship passed a bipartisan legislative package to reform and modernize the SBA. The legislation addresses several issues raised by the task force, including placing guardrails around the expansion of the Small Business Lending Company licensing, leveraging the Community Advantage program to expand access to capital for underserved communities, and increasing the availability of small-dollar loans.
The SBA is an important public sector partner to OFN and to CDFIs lending in the small business sector. The recommendations in the report are intended to strengthen the agency that supports this critical sector that employs nearly half of the U.S. workforce, strengthens communities, and drives the economy.
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