Apr 11, 2024 - Economy

SBA chief: Business applications record reflects pandemic recovery

woman standing at podium

Photographer: Ting Shen/Bloomberg via Getty Images

New business applications filed since the start of 2021 reached 17.2 million in the U.S. as of March, Isabel Casillas Guzman, head of the Small Business Administration, told Axios in an exclusive interview on Thursday.

Why it matters: It's the highest-ever level under any presidential term, according to the SBA.

  • "That makes the first, second, third strongest years on record and we're aiming for the fourth," she says.

The big picture: Entrepreneurial energy has largely persevered despite a rolling set of challenges — the pandemic, supply chain issues, high inflation, geopolitical tensions and the rising costs of borrowing and doing business.

  • And even as recent surveys have shown dips in consumer confidence, small business owners have continued to take risks in launching new ventures.

Driving that momentum: Many Americans had reprioritized their values during the Great Resignation as unprecedented levels of federal aid flowed into household savings.

  • Those levels of excess savings ushered in strong consumer spending as the job market remained tight, which in turn boosted wages that created more consumer activity.

Between the lines: The winds have been favorable for entrepreneurial trial and error.

What she's saying: Data showing rates of business growth "higher than historical averages" is "an important indicator of how our nation has recovered from the pandemic," Guzman said.

  • At the same time sentiment data from surveys can shed light on "things we need to start preparing for," such as hiring or ways to manage inflation.

The intrigue: While generative AI has boosted big businesses and Wall Street over the past year and a half, small businesses haven't been left behind.

  • They've been picking up AI tools too to streamline work, according to Guzman.
  • The AI revolution is also taking place at a "unique time" for small businesses, she says, because entrepreneurs have been more open to adopting technology after doing so during the pandemic to survive.
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