Over the last few years, the U.S. Small Business Administration (SBA) has dramatically reduced its support for smaller small businesses and shifted more of its loan guarantees to larger small businesses. (The SBA’s definition of a “small” business varies by sector, but can be quite large. Retailers in certain categories, for example, can have up to $21 million in annual sales and still be counted as small businesses.) Under the SBA’s flagship 7(a) loan program, the number of loans for less than $150,000 has declined precipitously. In the mid 2000s, the SBA guaranteed about 80,000 of these loans each year, and their total value accounted for about 25 percent of the loans made under the program. By 2013, that had dropped to 24,000 loans comprising just 8 percent of total 7(a) loan volume. Meanwhile, the average loan size in the program doubled, from $180,000 in 2005 to $362,000 in 2013.
