Black small business ownership is growing at the fastest pace in over 30 years, and President Biden will announce new investments to support underserved communities.
Today, President Biden will visit the Wisconsin Black Chamber of Commerce to highlight how Bidenomics is helping drive a Black small businesses boom and announce new investments in Milwaukee and communities across the country. Under President Biden’s leadership, the United States is on track to have the three strongest years in history for new small business applications, and with Black business ownership growing at the fastest pace in 30 years.
President Biden will be joined by the founder and owner of Hero Plumbing, a Black-owned small business removing lead pipes in Milwaukee, which will help meet President Biden’s commitment to remove all lead service lines in the country by the end of the decade and benefit from the historic $15 billion in funding through the Bipartisan Infrastructure Law.
While President Biden highlights historic investments from his Administration to support small business, including Black-owned businesses, extreme Republicans in Congress have repeatedly tried to dismantle the President’s small business agenda. Every single Republican opposed the American Rescue Plan, which helped small businesses stay afloat during the pandemic and spurred a record small business boom. Many Republicans in Congress, including Wisconsin Senator Ron Johnson, opposed the Bipartisan Infrastructure Law. They also want to repeal key provisions of the Inflation Reduction Act that are lowering health care, prescription drug, and energy costs. President Biden will continue fighting for opportunity for working families and small business owners, while Republicans in Congress want to return to failed trickle-down economics that for too long left too many communities behind.
Beyond attacks from Republicans in Congress, over the past few months, there has been an intentional effort to erode ladders to Black economic opportunity. The President understands that diversity contributes to our economic security and he has made unprecedented investments in Black communities to preserve the American dream.
Investing in Black Entrepreneurship and Opportunity
Small businesses like Hero Plumbing are the backbone of the U.S. economy, creating jobs and opportunities in local communities. President Biden’s Investing in America agenda has driven historic gains in small business creation and entrepreneurship. Since taking office, Americans have filed a record 15 million applications to start new businesses. Black business ownership is growing at the fastest pace in 30 years, and the share of Black households owning a business has doubled between 2019 and 2022, after falling between 2007 and 2019.
When Black businesses do well, they create jobs, generate wealth in their local communities and make the broader economy stronger. As a result, Black wealth is up a record 60% from before the pandemic and Black unemployment has reached historic lows. The Administration’s investment in Black entrepreneurs is producing results, including:
- Nearly $70 billion-a new record-in Fiscal Year (FY) 2022 on federal contracts awarded to small, disadvantaged businesses (SDBs).
- $12 billion in community lenders to expand access to capital and resources to too-often sidelined entrepreneurs. The U.S. Department of Treasury estimates that these investments in community lenders will result in a $50 billion increase in lending to Latino communities and a nearly $80 billion increase in lending to Black communities over the next decade.
- $10 billion in in states, tribes, and territories to launch and expand capital access programs for roughly 100,000 small businesses, including $79 million to Wisconsin.
New investments and small business growth and local communities across the country
Investing in local, community-led economic development and small businesses is critical to President Biden’s commitment to build the economy from the middle out and the bottom up, not the top down. Milwaukee has seen an economic comeback under President Biden, with the share of the Black population employed reaching a more than decade high and new business applications up nearly 70%.
Building on this progress, President Biden will announce that the Grow Milwaukee Coalition is one of 22 finalists for the Department of Commerce Economic Development Administration Distressed Area Recompete Pilot (Recompete) Program. This program, funded by the CHIPS and Science Act, is focused on investing in quality job creation, small business growth and economic opportunity in America’s hardest-hit communities.
The Grow Milwaukee Coalition proposal would invest in revitalizing Milwaukee’s historic 30th Street Industrial Corridor and connecting the historically segregated Black community to economic opportunity across the city. Of the 22 Recompete finalists across 19 states and Puerto Rico, eight are specifically focused on growing Black-owned businesses and entrepreneurship and supporting economic development in disadvantaged communities that are majority-Black.
The 22 Recompete finalists will compete for $190 million in flexible implementation funding for locally-led economic development plans to create and support small businesses, train workers and connect them to good-paying jobs, investment in infrastructure, and technical assistance.
Today’s announcements build on historic progress and investments in Black-owned businesses:
- President Biden’s American Rescue Plan (ARP) is supporting small businesses, including Black-owned small businesses in Wisconsin and across the country through:
- A $10 billion investment, including $79 million in Wisconsin, to help small businesses access the capital they need. The American Rescue Plan invested $10 billion to launch and expand capital access programs for roughly 100,000 small businesses. To date, the Treasury Department has already approved more than $8 billion in funding to all 50 states and an additional $108 million in technical assistance grants to 32 states. These funds include $79 million in capital dollars and $1.9 million in technical assistance for Wisconsin.
- The largest-ever dedicated federal investment to connect minority small businesses to support. The Small Business Community Navigators Pilot Program provided $100 million in funding to 51 organizations, including U.S. Black Chambers of Commerce and the National Urban League, that worked with local groups to connect entrepreneurs to resources to help their small businesses recover and thrive. A recent SBA analysis shows that shows that Community Navigators provided training and counseling to more than 350,000 small businesses, and roughly 43% of the businesses served were Black-owned.
- The largest-ever direct federal investment in small business incubators and accelerators. The Minority Business Development Agency (MBDA) Capital Readiness Program awarded 43 non-profit community-based organizations $125 million in funding to support underserved entrepreneurs launch and scale their small businesses, including $3 million for Wisconsin.
- Delivering roughly $150 million in support for small businesses in Wisconsin. The state of Wisconsin leveraged the ARP to provide $75 million for 5,200 businesses with Main Street Bounce Back Business Grants and invest $73 million in the Diverse Business Assistance Program to assist chambers and non-profit organizations providing assistance to small businesses.
- President Biden’s Small Business Administration delivered $50 billion to small businesses in Fiscal Year 2023, with major increases in support for underserved businesses, including Black-owned businesses. Since 2020, the share of the SBA’s loan portfolio going to minority-owned businesses has increased from 23% to over 32%. The number and dollar value of SBA-backed loans to Black-owned businesses has more than doubled since 2020.
- Achieving record federal contract spending on small disadvantaged businesses (SDBs). In 2022, the Biden-Harris Administration awarded a record-breaking $163 billion in federal procurement opportunities to small businesses. These awards include a record $69.9 billion, or 11.4% of federal contracting spending, to SDBs – exceeding the Administration’s FY22 goal. Shortly after taking office, President Biden set a goal of increasing the share of contracts with SDBs to 15% of all federal contracts by FY 2025, a 50% increase from spending levels when he first took office.
- Supporting small and disadvantaged businesses through CHIPS Act Funding. In addition to the Recompete program, the first CHIPS notice of funding opportunity for semiconductor manufacturing requires applicants to develop a workforce plan to create equitable pathways for economically disadvantaged individuals in their region, as well as a plan to support procurement from small, minority-owned, veteran-owned, and women-owned businesses. The Department also announced a $500 million funding opportunity catered toward smaller businesses to support the semiconductor supply chain.
- Expanding and making the Minority Business Development Agency (MBDA) permanent. President Biden’s Bipartisan Infrastructure Law expanded the geographic reach of the MBDA-by authorizing new regional offices and business centers-and codified the agency in statute. The law also increases MBDA’s grantmaking capacity and ability to partner with non-profits and Historically Black Colleges and Universities. In doing so, the law provided certainty and new resources to the more than nine million minority-owned businesses across the nation.
- Increasing access to capital for small and disadvantaged businesses applying for infrastructure contracts. The Department of Transportation and SBA have collaborated to connect small businesses seeking long-term loans or patient capital with Small Business Investment Companies (SBICs). This matchmaking provides small and minority businesses with financing that enables them to apply for larger contracts and projects than they would ordinarily be able to reach. In FY23 alone, the SBIC program set a record by delivering more than $4B in commitments to funds that support small businesses and startups. Last year, the SBA’s portfolio of 318 SBIC funds collectively provided financing to more than 1,200 small businesses and startups, which created or sustained over 130,000 jobs. SBICs financed over $161 million for small businesses in Wisconsin in FY23, a 40% increase compared to FY22.
- Supporting small and minority-owned businesses in clean energy industries. As part of its historic investment in climate and clean energy through the Inflation Reduction Act, the Biden-Harris Administration has supported new efforts to grow disadvantaged clean energy businesses in underserved communities. That includes a $6.3M investment in a group that is working to coordinate and train disadvantaged and minority-owned businesses on how to apply for clean energy funding. In addition, Environmental Protection Agency’s $27 billion Greenhouse Gas Reduction Fund will invest in clean energy technology projects in low-income and disadvantaged communities and build the capacity of community lenders to finance clean energy projects that support local economies.