Reversing a downward trend, small businesses in our communities are on the rise. This is great economic news since small businesses create nearly two out of three net, new jobs and account for almost half of America’s private nonfarm GDP. Besides being the engines of our economy, they are the unique fabric of our local communities.
The economy added 211,000 jobs in November, marking the strongest three years of job creation since 2000 with 8.1 million jobs added. Our businesses have now added 13.7 million jobs over 69 straight months, extending the longest streak on record. These records are possible thanks to America’s small businesses.
Last year SBA achieved record lending of $23.5 billion under our flagship 7(a) loan program, with loans up 18 percent for women, 23 percent for minorities, and 101 percent for veterans. We’ve eliminated borrower and bank fees on small-dollar loans, so more Main Street entrepreneurs can get the working capital they need to hire and grow.
Recently, the Ewing Marion Kauffman Foundation published a Main Street Entrepreneurship Index. It compares entrepreneurship rates among different demographic groups in all 50 states and America’s 40 largest metro hubs. The Kauffman Index allows us to see which cities and states have fostered the right conditions for growth.
According to the Kauffman Index, small business activity is on the rise in 49 of the 50 U.S. states and 38 of the top 40 largest metropolitan areas this year. Efforts like the Kauffman Index provide a roadmap for state and local officials seeking to foster a climate for small business growth.
Other valuable takeaways in this report:
•Businesses owned by women, minorities, and immigrants are increasing;
•The number of small business owners with college degrees is also increasing, from 34% in 1997 to 39% today;
•Despite the dynamic leadership potential of our millennials and veterans, young entrepreneurs (ages 20-34) and veteran-owned firms are actually declining.
Several specific SBA initiatives target areas of concern identified by the Kauffman Index. SBA launched the My Brother’s Keeper Millennials Initiative to promote youth entrepreneurship in the nation’s underserved communities. We are partnering with community colleges to expose young people to innovative pathways to start a business, and we’re promoting a Business Smart toolkit to train nonprofits and faith-based organizations to teach financial literacy.
SBA’s Boots to Business initiative gives post-9/11 transitioning service members a tutorial on the basics of business ownership. The program is now active at more than 180 military installations worldwide and has introduced 32,000 service members and spouses to potential careers in entrepreneurship as they rejoin the civilian workforce. We also launched Boots to Business: Reboot to open up this innovative curriculum to veterans of every era.
SBA is partnering with cities on Startup in a Day to create an easy-to-use online tool that allows entrepreneurs to apply for all licenses and permits needed to start a business in less than a day.
Helping more Americans start and grow Main Street businesses is a core mission of the U.S. Small Business Administration. We hope you reach out to your local SBA office to jumpstart and scale up your small business. Check out sba.gov/local for your nearest SBA local office.