On the morning of Tuesday, July 2, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA), a position which makes her the head of small businesses in President Biden’s cabinet, had the opportunity to tour the newly opened Grand Farm Innovation Shop and talk to local entrepreneurs about their businesses.
The SBA Administrator leads the SBA to oversee programs that support small businesses with funding, counseling, and advocacy. The SBA sets policies, manages resources, and advocates for small business interests in government. Their role ensures that small businesses receive the necessary support for growth and success, engaging with stakeholders to address concerns and promote economic development nationwide. This stop at Grand Farm is part of Administrator Guzman’s Small Business Boom Tour, which aims to educate entrepreneurs about the resources available to them through the SBA and to celebrate past SBA successes.
We were able to sit down and chat with her to learn more about her role and ND’s position in ag and small business.
Q&A
Why are you in North Dakota?
We’ve launched a rural tour around America as well as a small business tour to lift up our small business successes in helping to propel economic recovery, as well as build the future of everything from manufacturing to tech. In this case, [we’re] excited to lift up AgTech in particular [and] celebrate the work of a growth accelerator from the SBA to Grand Farm and [to] see how they and their businesses are doing.
So, is this more of an attempt to educate yourself by getting boots on the ground and seeing what’s going on?
Definitely for North Dakota, this is my first visit to the state. So, I’m excited to learn more about the unique opportunities that are on the ground here. And, of course, [I] have had extensive travel in rural communities, especially in rural California, where I’m from. And, [I’ve] spent a lot of time in the rural communities as focused on small business. But, this is a full day where we’re going [to] have multiple small business stops, including [a stop at] our 2023 Small Business of the Year, Red E… We’re excited to lift up some of these legacy stories as well as small business stories and focus in on this specific innovation clustering that’s happening around agriculture at Grand Farm.
Have you had any previous involvement with Grand Farm?
No, we have not… But it has [been] exciting to see them win the growth accelerator phase one directly and [we’re] looking forward to learning more about their operations. I know when we look at feeding the future and making sure that we have strong food production in this country, this is a key state and we hope to continue to try and develop innovation here and really promote some of the federal resources that are available to make sure that the community is fully leveraging those resources to help their entrepreneurs.
What are some resources available through the SBA that you think people aren’t as aware of as they should be?
In addition to the lending [and] investment products that we have, [we have] the step grants for trade abroad, which I know many small businesses in the state participate [in]. We also really focus heavily on innovative startups. And that’s by Powering America Seed Fund, which is [The Small Business Innovation Research] SBIR [and Small Business Technology Transfer] STTR grant awards. That $4 billion a year is nondilutive funding for small businesses who are innovating. And this is a program that we’d like to see cultivated here in North Dakota… We’ve awarded, in the past, a fast grant to the state to try to help direct more SBIR.
We’d love to see some ag examples—there is, for example, one exact success story in North Dakota around SBIR. They deploy low-cost flight data recorders for light aircraft—that was their development and we’d like to see more in the ag space in particular to see if we can replicate some of the successes we’ve had around the country in agtech. This is an important sector. The USDA is a big funder under SBIR and with our partnership and MOU (Memorandum of Understanding) that we launched last year with USDA to better align SBA’s products with USDA to help small businesses, particularly in rural communities, we hope to direct some of this funding, as well as broadly the SBA resources that help all small businesses and the native startups, manufacturing, [and] main street really grow their businesses.
Of course, this is a celebration of the rural tour in particular with Grand Farm, but I think more broadly as we’re visiting with businesses around the state, [we’re] really focusing on the small business boom. There have been over 18 million new business office applications done by the Biden-Harris administration. This is a strong reversal of and a return to business dynamism in this country and that is exciting to see, but we also see [this] in North Dakota with 28,000, new business applications filed—that’s a strong number of new individuals jumping in to start their business. We want to make sure that they’re resourced and connected and aware of SBA offerings at sba.gov, so we appreciate being able to get on the ground and talk to businesses and amplify the successes.
What do you think the reasons for that boom are?
I think it’s multiple factors. And we’re seeing this across the country, across multiple industries… What we do know is that, obviously, the pandemic was one example of an impetus where you had people during the Great Recession, rethink what they were doing with their lives, [they were] really thinking about their life-work balance, their professional journeys, and a lot of people had to make that decision at that time to jump in and start their businesses. There are also opportunities people are seeking. We’re seeing a lot of folks in the professional service, and technology services sector, as well as in the digital e-commerce space. We saw businesses adopting e-commerce at such high rates—it really connects businesses to the world global trade and so [we’re] excited to see those businesses really taking off as I do think that they’re heavy investments being made that touch those categories. The investments in the Infrastructure Investment and Jobs Act—those are contracts for small businesses to win. Those are opportunities for funds to be distributed locally and benefit main streets as well. The investments in chips and manufacturing and supply chains and innovation are at historic highs as well. So, those numbers and the type of support that we’re seeing for small businesses to engage in those activities with SBA lending small-dollar loans… and our lending programs really being revitalized is really a strong support for small businesses because we are focused on startups at the SBA.
In your role, what do you think still needs the most work done as far as getting things to where they need to be so that we can best support all these small businesses?
Part of our reforms, during [the] Biden-Harris [administration] have been focused on simplifying our products so that they’re more accessible to not only small businesses but our incredible private partners, the lenders, who are part of the SBA network. Funding is king for small businesses. They need to be able to access funding to start and to add to their own resources,
[We’re] really growing our networks… [With the growth accelerator] we have deployed this federal network of over 1,200 centers and supports, including in North Dakota where we want to see small businesses get the tools and resources [they need] because it’s about your skill sets [and] your toolbox to be able to address the challenges and problems that hit every day. And, we’ve seen our small businesses really face enormous challenges. We look back to starting in COVID, where they had to pivot and adapt to survive and rebuild. [We’ve seen] their resilience going forward with dealing with supply chain challenges, inflationary pressures, workforce challenges, you name it. I think SBA’s resources, whether that’s our Small Business Development Centers, Women’s Business Centers that we have on the ground in North Dakota, our Veterans Business Outreach Center, or school partners that are throughout the state, we know that those resources make a difference on success outcomes. So, we’ve really been focused on building those partnerships and trying to find partners to build that awareness. The businesses I’m visiting today, many of them have graduated from our Thrive program, or Emerging Leaders, as we used to call it. This is an intensive training to help give them those tools and resources and it just demonstrates that the SBA’s potential to really help small businesses grow.
I was reading about the Working Capital Pilot Program that’s set to launch. Why did you guys decide to go ahead with that?
We wanted to make sure that our products are meeting businesses where they are today, and I think that working capital continues to be an often-cited challenge for small businesses to get affordable working capital lines. Many of them use their credit card debt, as we know, to be able to finance growth and when we’re seeing these historic investments in infrastructure—North Dakota has $2.6 billion in funding to date—and the private investment that is being leveraged as well to match the investments in manufacturing and innovation—there’s been over $2 billion in the states to date as well. Small businesses need to get the financing they need to go after those contracts or opportunities and working capital continues to be a big challenge. We’re trying to power on an ongoing basis, doing business with the federal government—those contracts require businesses to be ready and able to finance and grow to meet the demands and needs of a contract. So, that’s a huge area of opportunity for us to improve the experience for small businesses and really see the growth. So, we’re excited to be rolling that out with our lending partners and helping more small businesses beyond our current programs, which many are already being leveraged for working capital, but the Working Capital Pilot Program better aligns the fee structure and terms to support a true working capital life.
If you were to look out 10 years in the future, how do you envision small businesses interacting with the SBA?
I’ve told my team that we need to be as entrepreneurial as the small businesses that we serve. Obviously, there’s going to be a continuous evolution of challenges. Small business owners will tell you that every day there’s a new challenge that they face—so, making sure that they have the skills and resources [they need] and that we’re adapting and continuously iterating on our products to meet market demands [is important]. SBA was founded to fill market gaps, and so we constantly assess and make sure that we’re filling those needs for small businesses—especially underserved communities [like] rural communities. There are 1,600 banking deserts for example. We need to see the SBA continue to grow its lending networks, with our banks, credit unions, but as well as our mission lenders and alternative lenders so that we can get all of our resources out into communities equitably around the country. And so hopefully, we continue to grow in those realms of simplifying and creating products and services that meet market demands with a broader network for more competition and innovation.
How do you think being boots on the ground like this helps you in your role?
I come from a small business family and grew up in small businesses. I’ve started my own small businesses, and being able to speak with entrepreneurs constantly on the ground, really, truly gives me inspiration, of course, to continue to do the hard work at the SBA, but it, obviously, also offers me incredible insights. With the feedback that I get from entrepreneurs, we’ve been able to make tweaks and improvements in our products that make a difference. I attribute being on the ground. the way that we get out and celebrate the successes and build awareness for those new business sites, as well as established businesses, and help them become aware of the SBA, and what we can do for them because I do think it is my responsibility to get out there and market and promote the resources of the federal government so that more small businesses feel that they’re accessible to them with for the growth of their businesses.
What are your thoughts on Grand Farm after getting a tour?
I’m super excited because they’ve really been able to leverage multiple federal programs and agencies to be able to, hopefully, see more innovation and commercialization. But more importantly, becoming the national center and leader in ag innovation. That seems like the trajectory they’re on, which is exciting. The other thing is that I want to make sure that awareness of resources is top and center in my visit today.
The fact that the success of the SBIR program is still to come—we need to get more of the innovators here, applying for and winning these federal grants. That is still clearly a problem and one of the top priorities here. So, I’m excited to see how we can be more helpful. That’s what the accelerator grant is all about as well—to make sure that they can have better access to us to be able to learn how to leverage the agencies doing SBIR.
You mentioned during your talk with the Grand Farm leaders that you have been to some other places like this.
We were talking about who else is leading in this space around innovation that they partnered with. They mentioned, the St. Louis area, and a couple of others, but I talked about one that was in California as well. I think the advantage here is that they actually have plots because I often hear from farmers that they have all these tech companies coming in pitching them to try to test their innovations and it can be disruptive and not as fruitful. Sometimes the tech doesn’t work. So to have actual test plots I think is really special.
Is there anything else you’d like to say to our readers?
This is a small business boom and so many entrepreneurs are jumping in finally taking that leap to start a business. It takes incredible risk appetite and bravery. But then as you proceed with a startup, it takes a lot of tenacity. It takes a lot of hard work and effort and the SBA is here to really here to be part of that team. And I want people to really know that sba.gov, our district team that’s on the ground, our resource partners that are fueled locally, are here to help them in that journey and to make sure that we can connect them to the capital and the networks that are needed. And so sba.gov/lendermatch [providers] resources and tools that people can use in their own free time to really learn about entrepreneurship and what the SBA can do for them. So I just want to encourage everyone to come and see what’s available. There are grants to trade abroad and get your business internationalized. [There are] grants for innovation as SBIR dollars. [There are] funding loans and investments that we have in our portfolio as well as just the knowledge and know-how and people behind you to help you thrive.
Learn more at sba.gov
