WASHINGTON, D.C. – Today, pursuant to EO 14210(Link is external), the U.S. Small Business Administration (SBA) announced its plans for an agency-wide reorganization. To return to its founding mission of empowering small businesses, and to restore accountability to taxpayers, the agency will reduce its workforce by 43% – ending the expansive social policy agenda of the prior Administration, eliminating non-essential roles, and returning to pre-pandemic staffing levels.
The strategic reorganization will begin a turnaround for the agency by restoring the efficiency of the first Trump Administration, as well as its focus on promoting small businesses. Core services to the public, including the agency’s loan guarantee and disaster assistance programs, as well as its field and veteran operations, will not be impacted.
The SBA’s reorganization will enable the agency to become a dynamic and efficient force for small businesses, manufacturing, and job creation in support of President Trump’s economic agenda. SBA will refocus its resources on the core missions of supplying capital, fostering innovation, supporting veteran small business owners, providing field support, and delivering timely disaster relief.
Key features of SBA’s reorganization include:
- Promoting business formation and growth by shifting resources to expand capital formation functions and personnel, removing the emphasis from partisan programs of the past.
- Prioritizing risk management and fraud prevention by centralizing these functions within the Office of the Chief Financial Officer, in the effort to restore integrity to agency programs, audits, and financial statements.
- Expanding disaster response support by transferring disaster loan servicing functions and additional personnel into the Office of Disaster Recovery and Resilience. Additionally, the agency will cross-train field office personnel to support disaster recovery efforts.
- Eliminating redundant pandemic-era positions associated exclusively with processing pandemic-era loans within the Office of Capital Access.
- Ensuring that 30% of the agency is located in the field, by decentralizing services and working to better serve Main Streets across America.
- Promoting veteran businesses and American manufacturing by preserving existing staffing levels within the Office of Veterans Business Development and the Office of Manufacturing and Trade.
- Exempting key accountability offices from reductions at this time including the Office of Advocacy and the Office of the Inspector General.
Much of the reorganization is targeted to reverse the broad and costly expansion of the SBA under the Biden Administration. Since the pandemic, the agency has nearly doubled in size, in part to support a suite of new progressive programs like the Green Lender Initiative, the Community Navigator Pilot Program, and DEI activities. This partisan agenda, promoted at the expense of America’s small businesses, predictably led to the deterioration of SBA’s services and financial performance. An estimated $200 billion in Paycheck Protection Program (PPP) and Covid Economic Injury Disaster Loan (EIDL) fraud was ignored for four years. Meanwhile, irresponsible Biden-era changes to the 7(a) loan program generated(Link is external) rising defaults and delinquencies, as well as negative cash flow for the first time in over a decade – which will have future, multi-year consequences for the program.
