SBA initiatives seek to expand access to affordable capital, spur domestic production and reduce regulations that cost small businesses time and money
SBA Administrator Kelly Loeffler recently announced new SBA initiatives, including the Made in America Manufacturing Initiative, to restore American economic health and boost small businesses. The initiative commits to a deeper collaboration and coordination of federal agency resources to 1) increase access to capital, 2) improve opportunities for public and private investments in support of manufacturing in America, and 3) help small businesses export their products on a global scale by empowering small manufacturers.
President Trump believes this agenda will create good-paying jobs, secure supply chains, promote fair trade, and bring back the “blue-collar boom” of his first administration.
“The great American comeback starts with restoring American industry,” Loeffler said. “With the Made in America Manufacturing Initiative, we’re slashing red tape, expanding access to capital, and fueling a manufacturing resurgence that will create high-paying jobs and revitalize communities across the country.
“By prioritizing American-made products, we’re not just securing our economic dominance — we’re protecting our national security by ensuring the essential goods we rely on are produced right here at home,” she added.
As part of the Made in America Manufacturing Initiative, the SBA will:
- Cut $100 billion in regulation through the Office of Advocacy, which is empowered by law to work across federal agencies to identify and eliminate rules, policies, and procedures that disproportionately burden small businesses and manufacturers.
- Launch a Red Tape Hotline for small business owners and manufacturers to share feedback and submit onerous regulations for review.
- Deploy the new Office of Manufacturing and Trade to offer small manufacturers resources and training in partnership with SBA field offices across the country.
- Reduce barriers to access for the 504 loan program, which provides capital for real estate, construction, and equipment purchases. As a “zero-subsidy” program, it operates without ongoing taxpayer funding and is sustained by borrower and lender fees.
- Expand the use of the 7(a) Working Capital Pilot program, which provides financing to fund inventory purchases and export-related expenses for international markets.
- Promote a skilled manufacturing workforce by partnering with agencies, trade schools and private sector stakeholders to create a pipeline of skilled workers to support manufacturing.
- Support President Trump’s manufacturing agenda, including tariffs to restore fair and reciprocal trade, tax cuts on domestic production for manufacturers.
The administration believes the SBA will be able to accomplish these goals despite reducing its workforce by 43% via an agency-wide reorganization “ending the expansive social policy agenda of the prior Administration, eliminating non-essential roles, and returning to pre-pandemic staffing levels.” Core services, including the agency’s loan guarantee and disaster assistance programs, will not be impacted.
The SBA plans to refocus its resources on the core missions of supplying capital, fostering innovation, supporting veteran small business owners, providing field support, and delivering timely disaster relief.
Much of the reorganization is targeted to reverse the broad and costly expansion of the SBA in recent years. Since the pandemic, the SBA has nearly doubled in size. Trump administration officials estimate that over $200 billion in fraud took place via the Paycheck Protection Program (PPP) and Covid Economic Injury Disaster Loan (EIDL), and that changes to the 7(a) loan program generated rising defaults and delinquencies.
Related: Which Companies Did Well During The Coronavirus Pandemic?
“The SBA was created to be a launchpad for America’s small businesses by offering access to capital, which in turn drives job creation, innovation, and a thriving Main Street. But in the last four years, the agency has veered off track – doubling in size and turning into a sprawling leviathan plagued by mission creep, financial mismanagement, and waste,” said Loeffler. “Instead of serving small businesses, the SBA served a partisan political agenda – expanding in size, scope, and spending.”
Under the SBA’s reorganization plan, the agency will cut approximately 2,700 positions out of a total active workforce of nearly 6,500 through voluntary resignations, the expiration of COVID-era appointments, and a limited number of reductions in force. The SBA estimates that this workforce reduction will save taxpayers more than $435 million annually by FY26.
“Just like the small business owners we support, we must do more with less,” Loeffler said.
Last Thursday, the SBA announced that it has restored lender fees that were eliminated in the Biden era to the agency’s flagship 7(a) loan program. In a press release, the SBA said that “reduced fee revenue left the agency in a shortfall and unable to cover the cost of failed loans.”
The SBA projects that the Biden Administration failed to collect over $460 million in upfront lender fees from 2022 to 2024. As a result, its 7(a) program saw negative cash flow of about $397 million in FY 2024 – the first instance of negative cashflow in over a decade.
Why Trump’s New SBA Initiatives Will Help Small Business Owners
The SBA is perhaps the most effective agency in the federal government, but that does not mean it cannot be streamlined. President Trump has said repeatedly that he was elected with a mandate to cut Federal bureaucracy and eliminate waste. The challenge will be to eliminate the programs that have proved too costly and detrimental to the economy, without hindering access to capital for small business owners.
Related: How Small Businesses Might Fare From A Trump Presidency
More than half (57%) of small business owners said their business is being held back by regulatory red tape and compliance, according to a recent Goldman Sachs study of small businesses. The study also revealed that 95% of small business owners believe the federal government should be doing more to tailor programs and services that reflect small business owners’ realities and needs.
The Trump administration’s publicly stated small business priorities align well to the priorities identified by the small business owners that Goldman Sachs surveyed:
- Address inflation (54%),
- Expanding healthcare, retirement and paid leave benefits (37%), and
- Reform tax policy (34%).
The study also revealed that 89% of small business owners believe it is important for Congress and the new SBA Administrator to comprehensively modernize the SBA and think the SBA should prioritize the following changes:
- Increase access to affordable capital (50%),
- Decrease the regulatory burden and cut red tape for small businesses (47%),
- Support more workforce development and training (34%),
- Modernize communication systems and technology (34%), and
- Increase small business procurement goals and accountability (32%).
Government computer systems have been slow to keep up with the technological innovations of the private sector. This is particularly true in financial technology (fintech). Upgrading systems will help streamline SBA lending and further expand access to capital of American business owners.
Although the current tariff wars and sticky inflation are concerning to small business owners, President Trump’s small business policies offer promise for the long-term success of America’s small businesses. The new SBA initiatives could play a key role in the outlook for small business owners in 2025.
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