Vice President Kamala Harris swears in Isabelle Guzman as Small Business Administrator, while husband Javier Guzman stands next to her at the White House in Washington on March 22, 2021.
Kevin Lemark | Reuters
Isabella Casillas Guzman, the new administrator of the US Small Business Administration, began her term under President Joe Biden in March, with responsibility for leading the government’s efforts to support more than 30 million US small businesses. She took over the management of an agency that, due to Covid, conducted a scaling experiment that would make even the fastest growing startups take notice.
“During Covid, we expanded our $ 40 billion portfolio to over a trillion dollars in aid,” Guzman said. CNBC Small Business Tutorial event on Wednesday.
Guzman is familiar with managing large sums on behalf of the state and entrepreneurs. She worked for the SBA under President Barack Obama and as director of the California Office of the Small Business Advocate, overseeing billions of Covid grants for the state’s largest economy. But the trillion dollar bailout machine is in a different order, and Guzman tells CNBC that businesses still have the opportunity to find the support they need to get back out of Covid entirely and get through this new phase of delta option uncertainty.
“Now they still need our support. They need continued relief efforts, as well as access to capital and markets, to continue to influence this recovery, ”Guzman said.
While she described the broad optimism of small business owners despite the many challenges they face, she said the Delta option poses challenges and “ambiguities on the horizon that could limit their recovery” – a view that is in line with just published CNBC | Momentive Small Business Survey Q3 2021…
That’s why the SBA was focused on “continuing to help our billions of dollars in small businesses,” Guzman said.
Here are some of the programs mentioned by the new SBA administrator that are still available for small businesses.
While some financial aid plans for Covid have been exhausted, Guzman noted that the American Rescue Plan still proposes Indoor Operator Grant a program to support concert venues such as stages, museums and theaters.
This program was criticized for the way he distributed financial aidand how anti-fraud measures effectively deprived businesses in need of assistance, but Guzman said the SBA was able to change the program. “We have over 10,000 applications approved and more than $ 8.5 billion distributed, which is the result of strong anti-fraud management alone,” Guzman said. “So we firmly believe that we can balance both and still place these funds in the hands of the prospective businesses.”
In addition Covid Disaster Loan Program remains available in what she described as a loan program and an expanded grant program for the hardest-hit low-income enterprises with fixed long-term debt at low interest rates.
This allows businesses to position themselves with capital to take advantage of growth opportunities, or simply position their businesses for coronavirus recovery, Guzman said. She added that the SBA is trying to make the job easier and more accessible to more businesses during this period.
One of the surprises of the pandemic is that many Americans perceived it as opportunity to start a new businessregardless of whether they were elderly Americans who were forced to abandon corporate careers, or those who were just starting out during the crisis.
Guzman said one of the lesser-known roles played by the SBA is small business investment companies (SBICs), private companies licensed and regulated by the SBA that invest in small business debt and equity instruments. The SBA provides guaranteed financing to SBIC in a variety of sectors and industries, which then invest in businesses.
She said that SBA’s work with SBIC is an area where she wants to do more. “We are exploring the President’s Build Back Better program to create new SBIC programs, as we call them for VC and Firmware, as we strive to provide the next phase of recovery and business opportunity,” Guzman said.
In addition, grants through Small Business Innovation Research Program and SBA is also an option that startups should be aware of, Guzman said. These grants are designed to connect startups working on ideas that could be funded by the federal government for basic R&D before they go into the business commercialization stage.
“Small Business Administration offers a variety of services for both startups and innovative technology, science startups, and small businesses from Main Street to manufacturing, with major programs related to capital markets access and networks to build your team. ,” she said.
While the payroll protection program has been a lifeline for many businesses that were closed during the Covid, it has also been criticized for being unfair in lending.
The daughter of a small business owner and entrepreneur himself, Guzman said she grew up in a small business family and realized that understanding your customers’ needs is the dominant challenge for the survival of the business, and the SBA should think so too.
“For SBA, our clients, we need to make sure we are customer-centric and serve our business. This means that the face of entrepreneurship is changing with women, and people of color are also starting their businesses at such a high speed. as a necessity for all of us to better serve these enterprises, to connect them to resources, ”she said.
SBA recently launched direct forgiveness portal, with a focus on small businesses that have PPP loans of $ 150,000 or less. Guzman said the SBA has partnered with over 1,000 lenders on the platform to enable businesses to complete the process of forgiving their loans in 10 minutes.
“More than 94% of the loans that remain unforgiven are for these small businesses and we want to be sure we can support them, as well as our large network of lenders, to be able to process these forgiveable PPP loans,” she said. …
Startups that Guzmán said may particularly need help are run by women and minority founders.
“We found, especially during Covid, that women and people of color often face more serious problems and try to access these resources to either prepare their businesses for recovery or start one,” Guzman said. “We need to make sure we meet with companies where they are, given the challenges they have overcome over the past year and a half, and be prepared with programs that can help them today.”
She said creation community navigator networkfunded by the American Rescue Plan will help connect local businesses to SBA programs. The introduction of new technology that will help cope with a massive agency scaling from $ 40 billion to $ 1 trillion will also be an important part of improving the SBA’s performance, she said.
SBA financial aid and assistance in gaining access to capital have helped small businesses struggling in the labor market try to return to full capacity, but Guzman said many of the conversations she has with small business owners show Covid problems remain significant. part of the labor shortage, and not just competition for wages and benefits.
“They tell me that there are still concerns about Covid. And especially with regard to the Delta option, ”she said.
The National Federation of Independent Businesses sees a labor shortage leading to lost sales among its member companies, said Holly Wade, executive director of research at the NFIB, citing data from its latest Covid poll… Also speaking on the CNBC Small Business Playbook, she said the combination of continued competition from larger firms in the hiring market and the growth of the delta option means it will continue to be difficult for small businesses to maintain sales. “The lost sales they saw we can see again,” Wade said.
Thanks to the American Rescue Plan, businesses can give your employees free time to vaccinate and gain and gain access to a tax credit specifically provided for them in the federal Covid relief plan. “This is, first of all, what worries them. They want their main streets and their business centers back to normal. This means that we must fight the pandemic, ”Guzman said.
CNBC | Momentive Small Business Survey Results Q3 2021 the difficulty of hiring is one of the top concerns for small business owners, with increases in wages and benefits in an effort to keep workers and hire new staff.
Restaurants, in particular, faced both labor shortages and concerns about the Delta option.
Guzman said the American Rescue Plan’s federal restaurant restoration fund provided $ 28.6 billion to fund more than 100,000 businesses, but added that demand was 2.5 times that amount.
“There are also restaurants, food and beverage businesses that need support; we know they are the hardest hit and will often be the last to open in communities, but they define many of our main streets, ”she said. …
Legislation has been introduced on Capitol Hill three times since the initial approval to add new funding for restaurants was exhausted in July, including a recent attempt by senators last weekend, but no legislative action has yet been successful.
Guzman said she could not comment on any action Congress could take to further support the food industry.
NFIB’s Wade said the trade group is now looking into new financing for restaurants, but stressed that small businesses should take advantage of what exists today. She pointed to Employee retention tax deductionwhich, she said, many small business owners are unaware of. It provides a payroll based tax credit for employees of up to US $ 33,000 per employee. “It’s a bit technical to navigate, but for a lot of people, it will work. Small business owners should certainly look into this, ”she said.
Paychex CEO Marty Mucci recently told Jim Cramer on CNBC’s Mad Money that the company has processed over $ 3 billion in employee retention tax credits, “which are in cash in their pockets to help them right now.”
$ 1 Trillion Senate Infrastructure Package terminate employee retention tax credit three months earlier, on October 1 instead of January 1, 2022