On the 35th anniversary of the Women’s Business Ownership Act of 1988, U.S. Small Business Administration (SBA) Administrator Isabel Guzman released new data revealing an increase in SBA-backed loans to women-owned businesses. Lending increased by nearly 70% in the fiscal year 2023 (FY23), reaching a staggering $5.1 billion.
This legislation, passed in 1988, was crucial in changing the face of business in the U.S. The Ownership Act empowered women to start enterprises independently, removing the need for a male relative to co-sign a business loan. As a result, the National Women’s Business Council and Women’s Business Centers (WBCs) were established, which are essential in assisting women entrepreneurs in obtaining capital, training, and counseling.
Administrator Guzman emphasized the contribution of small, female-owned businesses to the recent boom in American entrepreneurship. “The Biden-Harris Administration is committed to ensuring women receive the capital and resources they need to build resilient businesses and create jobs to fuel our economy.” She continues, “Women-owned small businesses are helping to power America’s historic small business boom.”
The SBA’s lending programs shine as a ray of hope in an increasingly dire situation regarding credit accessibility. By bridging market gaps with government-backed loans on advantageous terms, they make sure small businesses are not left high and dry. In terms of data, there has been a 70% increase in loans to most women-owned small businesses since FY20. Under the current administration, the loan amount has increased by more than 60% to $5.1 billion in FY23 alone. As a result, these companies now account for over one-fifth of SBA loans, a significant increase from 15.6% in FY20.
The following provides a comprehensive analysis of SBA 7(a) and 504 loans to women-owned businesses between FY 2020 and FY 2023:
- The total number of loans observed in FY 2023 was 13,059, totaling $5.181 billion, or 21.3% of all loans.
- In contrast, the total amount of loans in FY 2020 was $7,715, which was worth $3.208 billion and accounted for 15.6% of all loans.
When considering the effects of the legislation, women-owned businesses have experienced a meteoric rise in employment, Which indicates they now employ over 10 million people and generate over $2 trillion in GDP annually for the country. Interestingly, women-owned employer firms are growing three times faster than those led by men.