Latest news with #BillDunkelberg
Epoch Times
20-05-2025
- Business
- Epoch Times
SBA Overhauling Biden-Era Loan Program Following High Default Rates
The Small Business Administration (SBA) is overhauling a Biden-era lending initiative, citing its 'alarmingly high rates' of loan default, the agency said in a May 19 The Community Advantage Small Business Lending Company program was designed to issue 7(a) loans to 'underserved communities,' the SBA said. In the 7(a) loan program, the government offers loan guarantees to lenders, which allows the loan providers to advance credit to small businesses with special needs. The SBA blamed Community Advantage's high default rate on lax oversight of the program. 'Community Advantage generated a 7 percent default rate over the last 12 months—more than double that of the overall 7(a) loan portfolio,' it said. 'Additionally, the portfolio is disproportionately stressed, with multiple lenders generating early problem loan rates above 30 percent.' A problem loan refers to any loan that cannot be recovered from borrowers quickly. Related Stories 5/20/2025 5/16/2025 The SBA issued a moratorium prohibiting the expansion of the Community Advantage loan program effective immediately. In addition, the agency also issued a new standard operating procedure that will mandate lenders taking part in the program to meet 'prudent financial stability standards.' Existing lenders have to 'dramatically increase' their capital reserves to continue participating in the program. SBA administrator Kelly Loeffler called Community Advantage an example of the weaponization of government programs to 'tip the scale against deserving small businesses and toward preferred groups and political allies, even when it meant greater risk to American taxpayers.' Overhauling the Community Advantage program is one of the latest steps the SBA has taken concerning its 7(a) initiative. On April 22, the agency The previous administration had eliminated lender fees under 7(a). It also adopted underwriting standards that ended up allowing lenders to approve loans for underqualified borrowers. 'Predictably, the program saw a massive rise in defaults and delinquencies—which the agency was unable to cover due to decreased fee income,' the SBA said. 'By 2024, the 7(a) loan program had a negative cash flow of about $397 million—the first instance of negative cash flow in 13 years.' The SBA said it was restoring 'robust rules' to end such 'reckless lending' practices. Despite changes announced by the SBA, the Small Business Optimism Index fell by 1.6 points in April, the National Federation of Independent Business (NFIB) said in a May 13 According to NFIB chief economist Bill Dunkelberg, 'uncertainty continues to be a major impediment for small-business owners in operating their business in April, affecting everything from hiring plans to investment decisions.' 'While owners are still trying to fill a high number of current job openings, their outlook on business conditions is less supportive of future business investments,' he said. SBA Loan Boom While the SBA tightens policies regarding 7(a) loans, the issuance of these loans has skyrocketed under the Trump administration, the agency said in an April 17 'Since Jan. 20, 2025, SBA has approved over 1,120 7(a) loans for manufacturers with a total loan volume of $677 million,' the agency said. 'During the same period in 2021, SBA approved less than 650 7(a) loans for manufacturers with a total loan volume of $497 million. Nearly 99 percent of American manufacturers are considered to be small businesses.' In the first 90 days of the Trump administration, 7(a) loans for manufacturers were up 74 percent from the same period during the Biden administration. On March 10, the SBA announced a Made in America manufacturing initiative aimed at expanding access to capital for small businesses, cutting down $100 billion in regulations, and creating the necessary infrastructure to support the 'blue-collar boom.' This month, a group of bipartisan lawmakers introduced the Made in America Manufacturing Finance Act, aimed at strengthening small businesses in the country, the office of Sen. Joni Ernst (R-Iowa) said in a May 1 The bill seeks to raise the loan limit for 7(a) and 504 small-business manufacturing loans from the current $5 million to $10 million. The act 'provides small-business owners the capital they need to expand, modernize, and compete,' said Rep. Roger Williams (R-Texas). 'We must continue to support and empower the job creators who keep our communities thriving. Together, we will continue driving the America First agenda forward and creating an environment where the success of Main Street is a priority.'
The Hill
13-05-2025
- Business
- The Hill
Small business optimism declines: Survey
Small business optimism dipped in April for the fourth month in a row, according to the monthly National Federation of Independent Business (NFIB) survey released Tuesday. April was also the second consecutive month in which the small business optimism index fell below the 51-year average of 98, in the poll of small business owners. In April, the index declined by 1.6 percentage points to 95.8. The index came in at 97.4 in March; 100.7 in February; 102.8 in January; 105.1 in December 2024; 101.7 in November 2024. From mid-2022 to October 2024, the index hovered between the high-80s and low-90s. The survey asks small business owners a series of questions to gauge the economic conditions and economic sentiment among business owners. The index includes 'hard' components, including job creation plans, job openings, inventory plans, earnings and capital expenditure plans; and 'soft' components, such as expected business conditions, outlook for expansion, expected real sales, expected credit conditions and inventory satisfaction. The decline in the optimism index was driven in large part by the six-point drop in small business owners' expected business conditions and the six-point drop in unfilled job openings. The share of small business owners expecting better business conditions in six months fell from a net 21 percent in March to a net 15 percent in April — the lowest point since October 2024. In April, 34 percent of business owners reported having job openings they couldn't fill. The last time the level was this low was in January 2021, during the COVID-19 recession. The uncertainty index also fell in April to 92, down from 96 in March, but it remains well above the historical average of 68. 'Uncertainty continues to be a major impediment for small business owners in operating their business in April, affecting everything from hiring plans to investment decisions,' NFIB chief economist Bill Dunkelberg said in a statement. 'While owners are still trying to fill a high number of current job openings, their outlook on business conditions is less supportive of future business investments,' Dunkelberg continued.
Epoch Times
13-05-2025
- Business
- Epoch Times
Small Business Confidence Slides as Investment Plans Slip to 5-Year Low
Small business optimism continued to decline in April, with fewer owners expecting business conditions to improve and investment plans falling to their lowest level since the early days of the pandemic, according to new survey data from the National Federation of Independent Business (NFIB). The NFIB's Small Business Optimism Index dropped 1.6 points to 95.8, marking the fourth straight month of declines and the second month in a row below the 51-year average of 98, according to the NFIB report, published on May 13. The report paints a picture of a Main Street economy gripped by uncertainty, as inflationary pressures ease but investment, hiring, and expansion plans remain subdued amid lingering concerns over labor quality, taxes, and shifting trade policy. 'Uncertainty continues to be a major impediment for small business owners in operating their business in April, affecting everything from hiring plans to investment decisions,' NFIB chief economist Bill Dunkelberg said in a statement. 'While owners are still trying to fill a high number of current job openings, their outlook on business conditions is less supportive of future business investments.' Eighteen percent of owners said they plan capital outlays in the next six months, down three points from March and the lowest share since April 2020, when COVID-19 lockdowns froze much of the economy. The decline in planned investment comes even as some cost pressures begin to recede, suggesting that broader uncertainty, not just inflation, is holding businesses back. Labor quality remained the top concern for the third straight month, followed closely by taxes and government red tape. 'Renewal of the Tax Cuts and Jobs Act (TCJA) remains a major source of uncertainty,' NFIB stated in comments on the survey findings. 'Nearly 1 in 10 owners view government regulations and red tape as their top business problem, a form of taxation in which the government directs the expenditure of resources for compliance.' Related Stories 5/5/2025 4/9/2025 One day before the NFIB report was released, the House Ways and Means Committee Meanwhile, inflation appears to be fading as the most urgent issue for small firms, per the NFIB report. Fourteen percent of owners identified inflation as their single most important problem—the lowest reading in over three years. A net 25 percent reported raising selling prices in April, down from 26 percent in March, while 28 percent expect to raise prices in the next three months, down two points from the prior month. 'Actual inflation is low, although not quite at the Fed's goal of 2 percent,' NBIF said in comments on the report. 'But prices are still rising, and what owners want to see is a reversal of the cumulative 20 percent increase in prices under the Biden administration.' The NFIB report came on the same day the latest Consumer Price Index (CPI) data This cooling of price pressures, paired with slowing shelter costs and easing tariff risks, could clear the way for Federal Reserve rate cuts later in the year, according to ING analysts. 'The housing and services story can help to mitigate the inflation threat from tariffs, which itself is less of a concern in the wake of the recent cooling of tensions with China,' ING analysts wrote in a The United States and China have agreed to a 90-day deal to significantly reduce reciprocal tariffs as part of an effort to ease trade tensions, officials from both countries The temporary truce follows talks in Switzerland amid ongoing disputes over intellectual property theft by Chinese actors, ongoing trade imbalances that disfavor the United States, and China-made chemical precursors used to make the deadly drug fentanyl that continues to pour into U.S. communities. 'While the de-escalation of trade tensions is helpful for growth, it also makes it more likely that inflation will be less of an issue for the Federal Reserve and the scope for Fed rate cuts remains,' ING analysts wrote, while predicting that the Fed will deliver a 25-basis point cut at its September meeting. The NFIB noted that any tariff relief will be a welcome development for small businesses because, while few of them export goods, many rely heavily on imported inputs. Despite easing inflation and a temporary trade truce, small business sentiment remains cautious. The NFIB's Uncertainty Index dipped to 92 in April, down four points from March, but remained well above its historical average of 68. 'Overall, the economy is not in bad shape for now, time will tell what happens next,' NFIB said in commentary. 'For the next few months, owners will be watching the news to monitor progress toward passage of 'one big beautiful bill.'' The Ways and Means Committee was set to begin marking up the bill on Tuesday, with small business owners likely to track developments closely in terms of tax policy, which was the top problem in the NFIB survey for 16 percent of respondents.
Zawya
08-04-2025
- Business
- Zawya
US small business confidence drops, economic outlook dims
U.S. small-business confidence dropped for a third straight month in March, eroding most of the gains that followed President Donald Trump's election victory in November, amid rising concerns over the administration's trade policy despite early optimism about a potential business boost from expected tax cuts and deregulation. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index fell 3.3 points to 97.4, below the 51-year average and the biggest drop since June 2022. The slide mirrored declines in both consumer and business confidence in other recent surveys. 'The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months,' said NFIB Chief Economist Bill Dunkelberg. 'Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.' While the NFIB's uncertainty index eased, falling 8 points to 96, from what had been the second-highest reading on record in February, it remained well above historical averages. The share of owners expecting better business conditions dropped 16 points, to 21%, the lowest since October and the biggest drop since December 2020. The net share of businesses expecting higher sales in the next three months dropped to 3%, also the lowest since before the presidential election. The survey was taken before Trump announced sweeping tariffs on April 2 that were far steeper than had been expected, triggering declines in global stock markets amid fears that the resultant changes to the world trade order will trigger recessions, including potentially in the United States. Fed Chair Jerome Powell last week warned that tariffs could cause both inflation and slower economic growth. "The impact of new tariffs is yet to be felt," the NFIB report said. The NFIB survey showed the share of businesses raising average selling prices eased 6 percentage points from February to 26%, while the number planning to raise prices in the next three months ticked up to 30%, the highest in a year. Meanwhile a net 12% of businesses reported plans to increase hiring in the next three months, the lowest in 11 months. (Reporting by Ann Saphir; Editing by Andrea Ricci)
Yahoo
08-04-2025
- Business
- Yahoo
US small business confidence drops, economic outlook dims
(Reuters) - U.S. small-business confidence dropped for a third straight month in March, eroding most of the gains that followed President Donald Trump's election victory in November, amid rising concerns over the administration's trade policy despite early optimism about a potential business boost from expected tax cuts and deregulation. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index fell 3.3 points to 97.4, below the 51-year average and the biggest drop since June 2022. The slide mirrored declines in both consumer and business confidence in other recent surveys. 'The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months,' said NFIB Chief Economist Bill Dunkelberg. 'Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them.' While the NFIB's uncertainty index eased, falling 8 points to 96, from what had been the second-highest reading on record in February, it remained well above historical averages. The share of owners expecting better business conditions dropped 16 points, to 21%, the lowest since October and the biggest drop since December 2020. The net share of businesses expecting higher sales in the next three months dropped to 3%, also the lowest since before the presidential election. The survey was taken before Trump announced sweeping tariffs on April 2 that were far steeper than had been expected, triggering declines in global stock markets amid fears that the resultant changes to the world trade order will trigger recessions, including potentially in the United States. Fed Chair Jerome Powell last week warned that tariffs could cause both inflation and slower economic growth. "The impact of new tariffs is yet to be felt," the NFIB report said. The NFIB survey showed the share of businesses raising average selling prices eased 6 percentage points from February to 26%, while the number planning to raise prices in the next three months ticked up to 30%, the highest in a year. Meanwhile a net 12% of businesses reported plans to increase hiring in the next three months, the lowest in 11 months.
