PYMNTS-MonitorEdge-May-2024

SBA Head McMahon Offers Update Six Months Into The Job

Six months into her tenure, U.S. Small Business Administration (SBA) head Linda McMahon is speaking up about the state of small and mid-sized businesses (SMBs) in the country.

In an interview with The Associated Press, McMahon pointed to a divide in the SMB community: feelings of both optimism and frustration over lack of access to finance.

“Entrepreneurs are willing again to be bigger risk-takers than they have been over the past eight years,” McMahon told the publication. “I think there is still a caution,” she added, a result of residual concerns following the Great Recession.

In particular, regulations around taxes and healthcare are a challenge to small business owners today, she said. According to reports, McMahon has spent the first six months in her position traveling around the country to meet with small business owners. Throughout that time, she noticed a few patterns in small business sentiment.

“There’s a lack of interest, or there is not a trained workforce to come in,” she said of the challenges SMB owners face when looking to hire. Companies are struggling with a lack of talent pool, with many telling McMahon the skilled workforce is older, aged 50 to 55, without a younger generation to replace them.

The unemployment rate is also at a 16-year low, reports noted, meaning fewer people are looking for jobs. According to McMahon, some small businesses are feeling relief as businesses large and small donate funds and other resources to community colleges and high schools around the country in support of specialty training for a younger workforce.

McMahon said this will not only help ease small businesses’ access to skilled labor, but will also stir a new generation of entrepreneurs.

“When you get those skills, you can start your own business,” she said.

But there are other issues at play, McMahon noted, including an ongoing struggle to access capital or small business loans. A rolling back of Dodd-Frank could help, she said, while banks should step up their efforts to reach SMB borrowers, especially women and people of color.

“We’ve found that women aren’t as aggressive at promoting themselves and putting themselves forward as men, although more women are starting businesses and having a better success rate,” she said.

PYMNTS-MonitorEdge-May-2024