The Administration of the President of the United States Joe Biden announced the provision of new financial assistance to those representatives of the small business sector who are in an underserved area.
In this case, the authorities allocate funds for $50 million. The money is provided as part of the American Rescue Plan. The funds will be used to implement projects in 20 regions of the United States under the State Small Business Credit Initiative’s (SSBCI) Technical Assistance Grant Program.
A White House press release indicates that the said money will provide legal, financial, and advisory services that are expected to help more than 10,000 small businesses owned by individuals from traditionally underserved communities. It is also separately noted that these funds are only part of the SSBCI resource worth almost $10 billion. Money has been allocated to states, tribes, and territories to launch and expand capital access programs for approximately 100,000 small businesses.
This news appeared against the background of reports that representatives of the business sector are facing various difficulties in the current period, characterized by the persistence of high-interest rates and a decrease in consumer spending. The media published information that some figures of the mentioned sphere refrain from expanding and buying equipment, postpone hiring, and accelerate the collection of payments due to the difficult economic situation.
Data from the National Federation of Independent Business shows that in the United States, the average interest rate paid by small businesses on short-term loans over the past three months has been 9%. A year earlier, this figure was 6.7%. In August 2021, the average interest rate was 4.6%.
Mark Zandi, chief economist at Moody’s Analytics, said in a comment to the media that at present the situation of small businesses has improved compared to the period of a sharp increase in interest rates, but financial instability is still observed.
The problem of access to funds is relevant for this sphere. For example, in July of the current year in the United States, only 47% of small and medium-sized businesses with an annual income of no more than $10 million stated the possibility of obtaining financing without hindrance.
As we have reported earlier, Joe Biden Erases $127 Billion in Student Debt.
