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A chamber of commerce official says the nationwide lack of new businesses startups — the U.S. is at a 40-year low — will cripple, or at least hinder, any economic recovery. And Frank Knapp, the official sounding the alarm, is taking his case for solutions on the road.
Knapp, president and CEO of the South Carolina Small Business Chamber of Commerce, recently came through Florida, where he met with reporters in nine cities, including Tampa, Sarasota, Port Charlotte and Lakeland. The core of the issue, Knapp contends, is new businesses lack access to capital, a problem that will require reforming, and rethinking, the way the SBA operates. He says many new business can get going on loans of $10,000 or $20,000 — too small for most banks to handle. “We’re not taking anything away from banks,” Knapp says. “They don’t want to do these kinds of loans.”
Some of the data Knapp details paints a worrisome picture, including:
• Small business owners’ confidence they can get loans dropped from 50% in March 2020 to 37% a year later, according to QuickBooks;
• In fiscal 2020 the nation’s 175 SBA approved small business micro-lenders made 5,890 loans averaging $14,434 — only 33.4 loans per lender per year.
Knapp says the solution is to provide the SBA more authority — and money — for startup loans. Knapp launched the Reform the SBA media campaign in Florida, he says, because of the state’s large population and political clout. Next up, in June, is North Carolina. “We need a quarterback in Washington to get these ideas across the goal line,” Knapp says. “But without a dedicated pot of money (startups) won’t have access to capital. The big elephant in the room is the capital.”
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