SBA looks to promote disadvantaged businesses with 2023 budget request

Isabel Guzman during the Confirmation Hearing Held For SBA Administrator at the US Capitol on February 03, 2021 in Washington, D.C.

Isabel Guzman during the Confirmation Hearing Held For SBA Administrator at the US Capitol on February 03, 2021 in Washington, D.C. Tasos Katopodis/Getty Images

The head of the Small Business Administration told lawmakers the agency is planning to ramp up outreach efforts for small disadvantaged businesses and other firms in need of support to address a 40% decline in small businesses working with the federal government.

The administrator of the Small Business Administration said the agency is heavily investing in equity initiatives as part of its fiscal year 2023 budget request, while aiming to ensure that funding translates to real opportunities for federal contractors in need of support.

SBA Administrator Isabella Guzman told lawmakers the agency's budget request includes increased funding for programs offering resources and opportunities to women-owned businesses and contractors from traditionally underserved communities, including small disadvantaged businesses (SDBs), as part of an effort to address what she described as a 40% decline of small business contractors working with the federal government over the past decade. 

"We think that we need to lean into entrepreneurial education to help more businesses get contract-ready," Guzman told the Senate Small Business and Entrepreneurship Committee at an April 27 hearing. She noted that the agency was requesting increased funding for its 7J program, which provides technical assistance to small businesses competing for federal contracts. 

"We believe equity is a real key to ensuring that we can continue to have a flow of contractors – small business contractors – to do business with the federal government,” she added.

The SBA's equity action plans indicate the agency aims to increase direct access to support and resources within underserved communities at over 280 small business development centers nationwide by allocating nearly 30% of its development center program funding to minority-serving institutions. The agency is also working towards achieving a governmentwide SDB contracting goal of 15% by fiscal year 2025, and increased its goal for fiscal year 2022 to 11%. 

The SBA is one of several agencies which included federal procurement in their equity action plans, noting how it plans to invest in improved technology to integrate data and increase access to capital for businesses in underserved communities. 

Guzman also told the House Small Business Committee this week that the SBA's Community Navigators pilot program—an American Rescue Plan initiative providing $100 million in funding to organizations in underrepresented and underserved groups – has enabled the agency to "build bridges to underserved communities across the country so that they can better access the resources of the federal government."

Nearly half of the Community Navigator program's efforts are focused on rural communities, Guzman said, adding that increased investments in broadband in those areas will allow for more micro entrepreneurship. 

"During the pandemic, we found that connection was key," the administrator said. "That's why you see within our budget request an increase within our entrepreneur and development programs ... so that we can better reach the 32-and-a-half million small businesses and the newly created firms that are being birthed every year."