The Small Business Administration (SBA) announced that it facilitated $56 billion in funding for small businesses and areas affected by disasters in the fiscal year ending on September 30, marking a 7% increase compared to the previous year.

This growth was primarily attributed to the rise in smaller loans, as detailed in the agency’s annual Capital Impact report. For the first time since 2008, the SBA surpassed the distribution of 100,000 financings to small enterprises, indicating a 22% increase from fiscal 2023 and a remarkable 50% rise since 2020.

While the SBA does not provide direct loans, except in disaster situations, it collaborates with lenders to make loans available to small businesses, which usually feature more favorable rates compared to standard loans.

“Every entrepreneur understands the vital role of capital,” stated SBA Administrator Isabel Casillas Guzman. “Through our various financial products, including loans and surety bond guarantees, the SBA has been instrumental in empowering small businesses, which in turn have fueled America’s remarkable economic recovery following the COVID-19 pandemic.”

A noteworthy portion of the loans consisted of small-dollar amounts, which the SBA prioritized. According to the report, the agency backed more than 38,000 7(a) loans, each under $150,000, totaling $2.7 billion. This figure has doubled since 2020 and is one-third higher than that recorded in 2023.

In its effort to make borrowing easier, the SBA introduced a regulation aimed at simplifying and streamlining the lending criteria for all lenders. The agency also enhanced its network of SBA lenders, thereby improving access to small-dollar loans for small businesses and reducing their reliance on high-interest alternatives such as credit cards.

There has been a concentrated effort towards supporting Black, Latino, and women-owned businesses. Within the fiscal year, the SBA facilitated 5,200 loans totaling $1.5 billion for Black-owned businesses, 9,600 loans amounting to $3.3 billion for Latino-owned enterprises, and 15,500 loans for a combined total of $5.6 billion directed towards majority women-owned businesses.