In the first few months of the Trump Presidency, the Department of Government Efficiency (DOGE) has slashed billions in purported savings from the federal budget. The Small Business Administration (SBA), among many of the departments identified for cost-cutting measures, has seen numerous adjustments, including the elimination of almost half of its workforce, the relocation of six offices, and a new policy requiring SBA loan applications to include a citizenship verification provision and adjusted contracts.
But is this a crisis for small business owners? Let’s explore these implications further.
Fresh Leadership is Focused on the Bottom Line
As the federal government’s leading voice for 34 million small businesses nationwide, the SBA provides resources and capital to start, grow, or scale their businesses.
Last year, the SBA funded 103,000 small businesses and made 18,000 loans to households for disaster recovery relief, for a total capital impact of $56 billion, a reported seven percent increase year over year.
New Administrator Kelly Loeffler seems intent on making a similar impact during her tenure. After all, the Administration has spoken loudly about the importance of the private sector.
Streamlining the department is the goal. Numerous conversations with industry insiders suggest that the SBA will continue to lend with the same vigor and willingness it has demonstrated in previous years.
In an additional and positive move, Bill Briggs has been appointed as Deputy Administrator of the Small Business Administration. Briggs was the steady hand steering the ship during the Paycheck Protection Program (PPP), a “herculean” $750 billion lifeline to small businesses during the COVID-19 pandemic.
In a recent letter to the Chair and Ranking Member of the U.S. Senate Committee on Small Business and Entrepreneurship ahead of his confirmation hearing, Briggs affirmed, “If we are to bring back jobs – and ensure that our economy continues to grow – we must first unshackle and support free enterprise. One of the ways to do that is to ensure that SBA is effectively serving small business – by cutting regulation, eliminating fraud and waste, streamlining and modernizing services, and refocusing the agency on its core mission of helping entrepreneurs thrive.”
Trust the Data
The SBA has made significant moves to bring staff back into the office, reduce the headcount, and ensure that funding for small businesses is reserved for American citizens, U.S. nationals, and lawful permanent residents. Respectfully, this is still low-hanging fruit and additional beneficial changes are likely.
Small businesses might feel that the first few months of the year have been chaotic, but what DOGE does next and how it affects the small business community remains to be seen.
They must keep the pulse on reliable economic indicators, including the NFIB, Federal Reserve Small Business Credit surveys, SBA’s Annual Capital Impact Report, and Lendio’s Index Report, to ensure headlines do not sway them and they remain ready for additional opportunities in the second half of the year.
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