Federal government makes new investment in women-owned small businesses
The Small Business Administration, the federal agency that supports entrepreneurs, is putting more emphasis on women business owners in the agency’s history than ever before, after two years that decimated small businesses and highlighted the obstacles still facing the fastest growing countries. group of owners.
Small women-owned businesses, and especially businesses owned by women of color, have experienced the fastest growth of any group, but they also still have the most difficulty accessing capital and support.
Since its inception in 1979, the SBA’s Office of Women’s Business Ownership has played a role in trying to support women entrepreneurs in their communities, providing them with training, assistance with federal contracts, and financial support. But this role has often been secondary to other SBA priorities, such as the Offices of Entrepreneurial Development, which currently oversee the Women’s Business Office.
Now, as part of a new initiative shared for the first time with The 19th, the office will take on a new lead role and report directly to SBA Administrator Isabella Casillas Guzman, putting it on a firm footing. par with other larger SBA offices, including its Office of Veterans Business Development. Office, and empowering it to meet the needs of women business owners. The change is expected to be finalized by the end of 2022.
“What he does is say: As women entrepreneurs we see you, we see your rapid growth, we see your concerns, we see your needs and we bring this to the immediate attention of the administrator. . â¦ Here is an appropriate place at the table for the women’s agenda, âNatalie Madeira Cofield, the current deputy administrator of the Office of Women’s Property in Business, told Dec. 19. Madeira Cofield is also the first black woman to lead the office.
In the past two years, more women have left the workforce than at any time in history. This has happened in conjunction with a labor movement that has seen more and more people quit their jobs and, in some cases, choose to start their own businesses instead. Last year, there was a 24% year-over-year increase in the number of people wanting to start a business – 4.3 million in 2020. A LinkedIn study found that the number of businesses owned by women on its platform had grown 27 percent during the pandemic, compared to 17 percent for men and 17 percent for non-binary business owners.
In some cities and states, regulations for home-based businesses relaxed during the pandemic to give more people the opportunity to start a business, leading women and people of color to seek out this option due to lower entry costs.
Yet of the 12 million women-owned businesses in the United States, almost all are very small – 90% have no employees, according to SBA data. Access to loans and bank capital remains the main concern of women-owned start-ups, which represent only 2-3% of all venture capital funds. Even new programs like the Paycheck Protection Program, put in place during the pandemic to reach out to small businesses, have failed to reach women entrepreneurs due to long-standing challenges such as building banking relationships.
Improving access to capital, advice, training and federal contracts are priorities for Guzman, and the office’s new role will also come with added flexibility to try and find creative ways to support homeowners. ‘business.
âWe are looking internally at the SBA to see how we can better help women perform better in their entrepreneurial endeavors,â Guzman told the 19th. âWe want to be strategic in making sure we meet these women business owners where they are, and there is often a different approach that needs to be taken to ensure they get the capital they need. “
Recent legislation is designed to expand these possibilities. The $ 1,000 billion infrastructure bill passed this fall includes $ 37 billion in federal contracts through the Department of Transportation, specifically designed for disadvantaged small businesses. This is an area that SBA has struggled with for years. Almost three decades ago, it set a target of awarding 5% of federal contracts to small businesses owned by women, but it has only met that target twice.
âWe are reviewing the infrastructure bill and how to continue to support and collaborate internally at the SBA with our other offices to ensure that women have a fair seat at the market table for all market opportunities that will be presented, âsaid Madeira Cofield.
At the same time, the SBA will continue what has been the biggest expansion in its history this year, opening new women’s business centers in underserved communities to provide personalized on-the-ground support to female business owners. business. The SBA now operates 140 centers, including two new ones that recently opened in Puerto Rico serving San Juan, Bayamon and the Mid-East region near Gurabo, as well as new centers in Tulsa and Rochester, New York.
The work in the centers helps inform the priorities of the office, Guzman said.
âWe try to identify places that can expand our geographic reach, as well as provide information on specific populations, whether they are more rural or you are located in a [historically Black college or university], for example, to focus on African American female entrepreneurship, âshe said.
That goal and the elevation of the Women’s Affairs Bureau was an independent choice made by the SBA, Guzman said, but it’s also part of President Joe Biden’s Fairness Directive and will work in tandem with the SBA strategy. Equity Policy Council of the White House, which directs government agencies to focus policies that advance equity for women, girls and LGBTQ + people.
One of the principles of this strategy is to promote entrepreneurship and innovation that will reduce gender discrimination in businesses and open up more capital opportunities for women-owned businesses.
Madeira Cofield sees this work as more imperative now, as the dynamics of the US workforce may be changing.
“Yes [women] choose to leave the labor market or if they are forced to leave the labor market or downsize, [we at SBA want them] to be able to cross the doors of entrepreneurship by making entrepreneurship centers, resources and capital more accessible and available to them, whether at their kitchen table at home or in their own office, âhe said. she declared.
Originally posted on December 7, 2021 by The 19th.