Access to working capital is critical to the survival and growth of small businesses.
And with the news from the National Federation of Independent Businesses (NFIB) Small Business Optimism Index released on Tuesday (August 13) that despite cost pressures and macroeconomic headwinds, small and medium-sized businesses (SMBs) in the US are feeling the effects highest level of optimism since February 2022, delivering the working capital The financial products and services they need to thrive are a priority for smart lenders and financial players.
But it is not just private sector players who are keen to seize the SME opportunity and stimulate the growth of large companies. The US government’s Small Business Administration (SBA) is also joining the initiative.
On August 1, the SBA launched a new loan category Under the umbrella of SBA 7(a) loans, the Working Capital Pilot Program (WCP) is designed to provide small businesses with more flexible and accessible lines of credit and plans to address the needs of growth-oriented businesses that require working capital to finance projects or manage cash flow.
Small businesses often struggle with irregular cash flow, where their income may not keep up with their expenses. Working capital helps bridge that gap, ensuring they can pay bills, purchase inventory, and meet payroll even during lean periods.
Program Comments closed On Wednesday (14 August), the WCP will be extended at least until the initial end of the authorisation period, set for 31 July 2027.
Read more: White House increases working capital offering for small businesses
Building a competitive advantage with innovations in working capital
For small businesses, access to working capital is not just a matter of convenience, but a necessity. It is the foundation of their ability to manage daily operations, respond to challenges, and take advantage of growth opportunities. Without it, even a profitable company can struggle to survive, especially in today’s often unpredictable and fast-paced economic environment.
The SBA website underlines that the agency expects significant demand for its WCP program, especially given that many small businesses face challenges accessing traditional working capital loans.
For 2025 alone, the SBA estimates it will approve approximately 270 WCP loans totaling $337 million. Half of that volume will come from loans that would have otherwise been approved as an SBA 7(a) Export Working Capital Program loan or SBA 7(a) CAPLines loan, and the other half will be new volume, according to the agency.
By participating in the program, the SBA notes that lenders can offer lines of credit at competitive rates, helping small businesses expand, strengthen their operations and ultimately create more jobs.
Only about 8.5% of Small and medium-sized enterprises SMEs have found that working capital loans from banks are readily available, according to “What’s next for credit? Why SMEs prefer corporate credit cards for short-term financing”, a PYMNTS intelligence report and Cross River collaboration.
More than half of respondents said they would consider new financing by 2024. Among those considering new financing, more than 26% would consider using an online lender and about a third would consider using a large national bank.
See also: Integrated lending puts SMEs at the centre of the financial services landscape
According to SBA, the agency’s own evaluation of the success of the working capital program will include, but not necessarily be limited to, the number of WCP loans approved, the adoption rate (number of lenders making WCP loans), a comparison of the number of loans approved and the adoption rate against those in the 7(a) CAPLine and EWCP programs and among SBA’s major lenders, whether the costs (including losses) of the pilot are within an acceptable range, and the performance of the portfolio relative to other 7(a) programs.
“Small business owners are using a Variety of solutionsYou may have more than seven business applications in your back office and are looking for a simpler, more efficient solution.” American Express Vice President of Marketing, Business Blueprint and Small Business Banking Brett Sussman told PYMNTS in an interview published Thursday (Aug. 15).
And how covered hereThe SME lending market is heating up – the most recent earnings season reveals that companies are increasingly focused on the segment.
The lawsuit stems from PYMNTS intelligence report “Main Street small business growth outpaces GDP for first time in two years” found that growth among Main Street small and midsize businesses (SMBs) has outpaced gross domestic product (GDP) growth for the first time in two years. That expansion would fuel plans to tap working capital to continue expanding.
