Isabella Casillas Guzman, the brand new Administrator of the U.S. Small Enterprise Administration, started her time period underneath President Joe Biden in March, with the duty of managing the federal government’s efforts to help the greater than 30 million U.S. small companies. She took over an company that, due to Covid, skilled a scaling experiment that might make even essentially the most hyper-growth start-ups take word.
“We have scaled from a $40 billion portfolio to over a trillion {dollars} in aid throughout Covid,” Guzman mentioned at CNBC’s Small Business Playbook occasion on Wednesday.
Guzman is acquainted with managing massive sums on behalf of the federal government and entrepreneurs. She labored on the SBA underneath President Barack Obama and as Director of the California Workplace of the Small Enterprise Advocate, she oversaw billions in aid grants throughout Covid for the biggest state economic system. However a trillion-dollar monetary aid machine is on one other order, and Guzman tells CNBC there are nonetheless alternatives left for companies to seek out the help they should absolutely come again from Covid and make it via this new delta variant uncertainty part.
“Now nonetheless, they want our help. They want continued aid efforts in addition to entry to capital and markets to proceed to energy via this restoration,” Guzman mentioned.
Whereas she described broad optimism amongst small enterprise homeowners whilst they face quite a few challenges, she mentioned the Delta variant is creating considerations and “uncertainties on the horizon that would restrict their restoration” — a view that’s in keeping with the just-released CNBC | Momentive Q3 2021 Small Business Survey.
That’s the reason the SBA has been targeted on “making an attempt to proceed to get out billions of {dollars} in aid to our small companies,” Guzman mentioned.
Listed below are a few of the packages the brand new SBA administrator talked about which are nonetheless accessible to small companies.
Methods to get SBA monetary aid
Whereas some Covid monetary aid plans have been exhausted, Guzman famous that the American Rescue Plan nonetheless affords the Shuttered Venues Operator Grant program to help reside occasion venues like levels, museums and theaters.
That program was criticized for the way it dispensed financial relief, and the way anti-fraud controls really denied companies in want from the assistance, however Guzman mentioned the SBA has been capable of flip round that program. “We’ve over 10,000 purposes authorized and over $8.5 billion {dollars} distributed, because of just a few robust administration inside the fraud management,” Guzman mentioned. “So we really feel strongly that we will stability each and nonetheless get these funds into these arms of these supposed companies.”
As well as, the Covid Economic Injury Disaster Loan program stays accessible, which she described as each a mortgage program in addition to a sophisticated grant program for these hardest hit low-income companies, that includes mounted, long-term, low curiosity debt.
That enables for companies to place themselves with capital to make the most of progress alternatives, or simply place their companies to get well post-Covid, Guzman mentioned. She added that the SBA is making an attempt to make sure that it’s streamlined and accessible to extra companies throughout this era.
Serving to pandemic period start-ups
One of many surprises of the pandemic is that many People took it as an opportunity to start a new business, whether or not they had been older People pushed out of company careers or these simply beginning out within the workforce throughout a disaster.
Guzman mentioned one of many lesser recognized roles that the SBA performs is thru small enterprise funding corporations (SBICs), privately owned corporations licensed and controlled by the SBA which make debt and fairness investments in small companies. The SBA offers its assured funding to SBICs throughout sectors and industries, which then make investments in companies.
She mentioned the SBA work with SBICs is an space the place she needs to do extra. “We’re wanting via the president’s Construct Again Higher agenda to create new SBIC packages, as we name them for enterprise and micro, as we glance to energy this subsequent restoration part and enterprise alternative,” Guzman mentioned.
As well as, grants via the Small Business Innovation Research program and the SBA are additionally an possibility that Guzman mentioned start-ups ought to learn about. These grants are designed to attach start-ups engaged on concepts that could possibly be funded by the federal authorities for core R&D earlier than they’re on the commercialization stage of a enterprise.
“Small Enterprise Administration is right here with a number of companies for each start-ups, revolutionary know-how, science based mostly start-ups, in addition to small companies from Foremost Avenue to manufacturing, with core packages round capital market entry and networks to construct your group,” she mentioned.
PPP issues, mortgage forgiveness in 10 minutes
Whereas the Paycheck Safety Program was a lifeline for a lot of companies that needed to shut down throughout Covid, it was additionally mired in criticism for an inequitable strategy to the way it made loans.
The daughter of a small enterprise proprietor and entrepreneur herself, Guzman mentioned she realized rising up in a small enterprise household that understanding your prospects’ wants is a dominant difficulty for enterprise survival, and the SBA must suppose that method as properly.
“For the SBA, our prospects, we have to make it possible for we’re being customer-centric, and serving our companies. Meaning there is a altering face of entrepreneurship with ladies, and folks of shade beginning companies at such excessive charges, in addition to a necessity for all of us to raised serve these companies, join them to assets,” she mentioned.
The SBA not too long ago launched its direct forgiveness portal, with a deal with small companies who’ve PPP loans of $150,000 and underneath. Guzman mentioned the SBA has partnered with over 1,000 lenders on this platform for companies to have the ability to full the method for forgiveness on their loans in 10 minutes.
“Over 94% of the loans that stay unforgiven are with these small companies, and we wish to make it possible for we will help them, in addition to our massive lender community, to have the ability to course of these PPP forgivable loans,” she mentioned.
Gender, race and enterprise restoration
Begin-ups that Guzman mentioned could also be particularly want of assist are these run by feminine and minority founders.
“What we discovered, particularly throughout Covid, is that girls and folks of shade are oftentimes confronted with extra intense challenges and making an attempt to entry these assets to both place their companies for restoration or begin up,” Guzman mentioned. “We have to make it possible for we’re assembly companies the place they’re, making an allowance for the challenges that they’ve needed to overcome over the previous yr and a half, and be prepared with packages that may serve them at this time.”
She mentioned creating a network of community navigators, funded via the American Rescue Plan, will assist join native companies to SBA packages. Adopting new know-how to assist deal with the large change in scale for the company from $40 billion to $1 trillion may also be an enormous a part of making the SBA run extra successfully, she mentioned.
The labor scarcity, Covid and small enterprise
SBA monetary aid and assist accessing capital have helped small companies going through a tough labor market as they try and get again to full velocity, however Guzman mentioned lots of the conversations she is having with small companies homeowners present that Covid considerations stay an enormous a part of the labor scarcity, not merely competitors over wages and advantages.
“They’re letting me know that there is nonetheless considerations about Covid. And particularly with the Delta variant,” she mentioned.
The Nationwide Federation of Unbiased Companies is seeing the labor scarcity translate into misplaced gross sales amongst it member corporations, mentioned Holly Wade, NFIB govt director of analysis, citing information from its latest Covid survey. Additionally talking at CNBC Small Enterprise Playbook, she mentioned the mixture of continued competitors in opposition to bigger corporations within the hiring market and the rise of delta variant means small companies will proceed to be challenged to maintain gross sales up. “The misplaced gross sales that they’ve seen, we might even see it once more,” Wade mentioned.
By means of the American Rescue Plan, companies are capable of give their employees time off to get vaccinated and get well and entry a tax credit score particularly constructed into the federal Covid aid plan for them. “That, above all, is what they’re involved with. They need their essential streets and their enterprise facilities to return to regular. And which means we’ve got to battle the pandemic,” Guzman mentioned.
The CNBC | Momentive Q3 2021 Small Enterprise Survey discovered difficulty hiring among the top challenges for small business owners, with wages and advantages rising within the try and hold staff and recruit new workers.
Unsure outlook for restaurant aid
Eating places, particularly, have confronted each labor shortages and considerations in regards to the delta variant.
Guzman mentioned the federal Restaurant Revitalization Fund, created via the American Rescue Plan, supplied $28.6 billion in funding to over 100,000 companies, however she added that the demand was 2.5 instances that quantity.
“There are nonetheless eating places, meals and beverage companies on the market who want help; we all know they had been the toughest hit, and are oftentimes going to be the final to reopen in communities, but they outline so a lot of our essential streets,” she mentioned.
Laws has been launched on Capitol Hill thrice because the authentic authorization was depleted in July so as to add new funding for eating places, together with most not too long ago an effort by senators final weekend, however no legislative effort has but been profitable.
Guzman mentioned she couldn’t touch upon any actions Congress could take to additional help the meals trade.
NFIB’s Wade mentioned new funding for eating places is one thing that the commerce group is taking a look at proper now, however she burdened that small companies ought to make the most of what exists at this time. She pointed to the Employee Retention Tax Credit, which she mentioned many small enterprise homeowners do not learn about. It offers a tax credit score based mostly on wages paid to workers, as much as $33,000 per worker. “It is a bit technical to navigate, however for a lot of, they’ll qualify. Small enterprise homeowners ought to actually look into it,” she mentioned.
Paychex CEO Marty Mucci not too long ago instructed Jim Cramer on CNBC”s “Mad Cash” that it had processed over $3 billion price of worker retention tax credit, “which is money of their pocket to assist them out proper now.”
The Senate’s $1 trillion infrastructure package deal would end the employee retention tax credit three months early, on Oct. 1 as an alternative of Jan. 1, 2022.