New Business Applications Reach Record 16 Million Under Biden-Harris Administration

WASHINGTON – Today, Administrator Isabel Casillas Guzman, head of the U.S. Small Business Administration (SBA) and the voice in President Biden's Cabinet for America's 33.5 million small businesses, celebrated new Census data showing 5.5 million new business applications were filed in 2023 alone—including 121,417 in Virginia—marking the third consecutive year of historic small business growth. Thanks to President Biden's Investing in America Agenda, the United States has experienced the first, second, and third strongest years of new business application rates on record.

"More Americans than ever are pursuing their dreams of business ownership as the rate of new business applications filed and establishments under President Biden continues to surge," said Administrator Guzman. "In the last year alone, Americans across the country and in a wide range of industries filed a record five and a half million new business applications, bringing the total number under this Administration to a record-breaking 16 million. America's great diversity continues to propel entrepreneurship with Black, Latino, and women founders starting up at higher rates than ever. As we enter 2024, the SBA will continue its work to increase access to the resources needed to start and grow resilient new businesses, harnessing the unique optimism and ingenuity of American entrepreneurs."

"Over the past three years of President Biden's Investing in America agenda, we've seen Virginia entrepreneurs file more than 121,417 applications to start a business—the fastest pace for new business creation ever recorded," said Regional Administrator John Fleming. "Under Administrator Guzman's leadership, the SBA has improved and streamlined programs and services to make it easier than ever for small businesses to start and grow right here in Virginia and capitalize on opportunities under to President Biden's Bipartisan Infrastructure Law and Inflation Reduction Act."

Since President Biden took office, there have been 16 million new business applications – the highest recorded amount in a three-year period. From 2021-2023, the U.S. has seen more new business applications than the prior four years combined. The monthly average of new business applications during the three-year span — 443,000 — is 46% higher than the average of the prior four years. The surge has featured outsized growth in entrepreneurship among women, Latinos, and Black Americans.

The Biden-Harris Administration's Investing in America agenda has fueled this small business boom with historic federal investments – including the American Rescue Plan, Bipartisan Infrastructure Law, and Inflation Reduction Act. The SBA has helped ignite and sustain this boom by closing capital access gaps, increasing outreach to underserved entrepreneurs, and bolstering competition both domestically and abroad.

BACKGROUND: Three Years of the Biden Small Business Boom

Under the Biden-Harris Administration, Americans continue to file businesses at a record pace.

• Record business starts: 16 million new business applications have been recorded since the start of the Biden Administration, an 84% increase relative to the average pace of annual growth from when the survey began in 2004 until the start of the Biden Administration. It took just 2 years and 10 months for new business filings during the Biden Administration to surpass the level reached during the prior Administration.
• Record establishment growth: Department of Labor data reflect that Americans aren't just applying to start businesses—they're turning those applications into real business establishments:
  • The number of private establishments has increased by 1.3 million since the start of the Biden Administration. The annual pace of establishment growth during the Biden Administration (5.4 %) is faster than at any point in the last quarter-century.
  • 2.8 million private-sector establishments were born since the start of the Biden Administration. More establishments have been born per year during the Biden Administration (1.4 million per year) than at any point since the series began in 1993.
• Ongoing small business job growth: More small businesses mean more small business jobs. From 2021 through the first quarter of 2023, the U.S. economy added a net 7.2 million small business jobs, with each quarter showing net-positive small business job growth of more than 370,000.  

Women and minority entrepreneurs have made an outsized contribution to new business creation.

• Black business ownership is growing at the fastest pace in 30 years, and the share of Black households owning a business has more than doubled, from 5% to 11% between 2019 and 2022.
• Latino business ownership is growing at the fastest pace in at least a decade, rising from 7% to 10% between 2019 and 2022.
• The number of women-owned businesses has grown dramatically. From 2019 to 2023, the growth rate of women-owned businesses was 94% greater than the growth of
• men-owned businesses.  

Business growth is seen broadly across industries, from tech startups to Main Street.

• Large industries lead application growth: From 2021-2023, the top 10 sectors ranked by total business applications spanned diverse industries, led by retail, professional services, and construction.
• Innovative startups growing rapidly: The country's most innovative pockets of enterprise all experienced establishment growth. Entities engaging in R&D across Nanotechnology, Biotechnology, Physical, Engineering, and Life Sciences, and the Social Sciences and Humanities experienced about 40% growth in number of establishments over the course of the Biden Administration through Q2 2023.

$52B in SBA Capital supported the small business boom in 2023 .

SBA lending to small businesses reflects both the increase in new business creation and the growing participation of women and minority entrepreneurs in the small business boom.

• Minority-Owned Small Businesses: Since 2020, the share of the SBA's loan portfolio going to minority-owned businesses has increased from 23% to over 32%.
  • The number and dollar value of SBA-backed loans to Black-owned businesses has more than doubled
  • The SBA backed $3 billion in loans to Latino-owned businesses in FY23 – a record-breaking high
  • Lending to AAPI-owned small businesses is on the rise, with loan count and total loan dollars both increasing by over a third since 2020
  • Loans to Native-owned small businesses are up 70% and total loan dollars have nearly doubled since 2020.
• Women-Owned Small Businesses: Lending to women-owned small businesses is once again on the rise, with loan counts increasing by 70% since 2020 and total loan dollars exceeding $5 billion in 2023.
• Veteran-Owned Small Businesses: Loans to veteran-owned small businesses are up by a third since 2020, with total loan dollars exceeding $1 billion in 2023.

Historic Biden-Harris investments set the conditions for the small business boom.

• The American Rescue Plan committed $1.9 Trillion to the U.S. economic recovery from the pandemic, providing financial security to the American middle class and enabling Americans to take on the risk of starting a business.
• Recent laws core to the Biden Investing in America agenda, including the Bipartisan Infrastructure Law (BIL), the CHIPS and Science Act, and the Inflation Reduction Act further facilitate the conditions for small business success. There are both specific provisions written into the laws to support small businesses (e.g., CHIPS funding recipients are evaluated by the degree to which they create opportunities for small businesses) as well as key spillover effects that will benefit small business (e.g., investments in expanding broadband access nationwide).
• In 2022, the Biden-Harris Administration awarded a record-breaking $163 billion in federal procurement opportunities to small businesses. These awards include a record $69.9 billion, or 11.4% of federal contracting spending, to Small Disadvantaged Businesses (SDBs) – exceeding the Administration's FY22 goal – and over $28 billion to service-disabled Veteran-owned (SDVOB) small businesses, or 4.6% of federal contracting spending.

For more information about the SBA's loan programs, financial assistance, and other services, visit sba.gov.