As one of the key figures in Los Angeles’ chapter of the Small Business Majority, Brian Pifer researches, educates and advocates for the area’s entrepreneurial community.
Across his network, which is dominated by professional services, consulting and health care firms with fewer than 10 employees, business-owners navigate volatile economic conditions and a growing need for capital.
The Business Journal sat down with Pifer, vice president of innovation at the Sherman Oaks-based nonprofit, for a look at how L.A.-area entrepreneurs are tapping into federal funding and thinking about growth – and survival.
How would you describe the SBA lending landscape for L.A. business-owners right now?
While there was some uptick (in loan volume) early in 2025 – which I think was possibly mainly related to tariffs – there was somewhat of a decline over the past six months.
There are a few L.A. stats that the SBA puts together. They break it out by loan volume by congressional district. What we see in that data closely aligns with national trends in terms of volume. We see 2026 is on trend. Last year, there were 3,456 total 7(a) loans made in Los Angeles County. This year, there have been 1,254, so maybe even a slight increase if that trend continues through the end of the year.
(The SBA does) tout the volume uptick, although there are there is some (national) data that came out of MultiFunding that showed from October of last year to February this year, lenders approved $11.8 billion in 7(a) loans, which is down from $14.6 billion from the same period last year, which is a decline of about 20%. By February of last year, SBA had approved 34,000 loans. This fiscal year, the number was down to 21,000, which is a 36% drop.
One of the big differences is (that) the dollar loan amount is higher so far this year, for an average 7(a) loan amount of $531,000 compared to $477,000 in total last year. The companies that are receiving these loans are getting bigger loans. We know that the biggest access-to-capital-gap issues are in the smaller dollar loan sector. Loans around $50,000 to $100,000 are what most small businesses, micro businesses tend to see, not these larger capital investment 7(a) loans.
You’ve worked to inform entrepreneurs in the Small Business Majority’s network about the capital options available to them. How well do L.A. small-business-owners understand SBA lending programs? Where are the biggest gaps in awareness?
Broadly speaking, businesses that make it make it a point to connect with other business-owners or the resources in their local community, of which there are many, to help small businesses generally have a pretty good understanding of SBA capital options. If you set up a business account at some point, a bank, if they do SBA lending, is going to talk to you about it.
And that’s all well and good. But where we see the biggest gaps are among business-owners in under-resourced communities, immigrant businesses that may not have banking relationships, or businesses that are generally cash-only that don’t have those banking relationships. Their capital needs are much smaller than what SBA can provide. Yes, there’s the micro loan program, and that’s a very good option for some of these smaller businesses.
But at the same time, businesses are getting sold capital options all the time from a lot of shady actors and characters in the space. The problem that we’ve seen in a lot of our work is the interest rate, or the annual percentage rate. The APR is not always disclosed to businesses because of the type of products that they are using. There is a real cost to these alternative products out there that traditional financing like SBA loans seek to solve.
There are other reputable options: through your bank, there’s also community development financial institutions that are funded by the federal government and make it a point to do more micro-lending and small-dollar lending to under-resourced communities.
Have you seen that awareness or caution to risk has changed in any meaningful way in the last year or two?
I’d say the biggest change in terms of awareness over the past couple of years in L.A. County has been in relation to the wildfires. SBA, in addition to their 7(a), 504 and microloan programs, one of the biggest other gaps they fill is in disaster loans. For businesses affected by the wildfires, they likely are aware of the services and the loan products available through SBA, through disaster loan, and because it was such a big story in L.A. County, probably anyone who’s followed that story might be more aware now of the SBA than they were before the wildfires.
But when it comes to immigrant communities, communities where English isn’t the primary language, or communities where lending and banks are not necessarily trusted or desired institutions, I think the gaps are still there.
What are you hearing from members of your network about recent SBA eligibility changes, particularly the one barring non-citizen business-owners from borrowing?
Small business-owners and organizations like ours that support them are appalled by the ruling. If businesses don’t have access to reputable, low-cost financing options like that that the SBA provides, they still need capital. That need hasn’t gone away, and thus they’re going to be funneled into other products that could potentially be detrimental to their business and their personal financial lives.
We haven’t seen the full impacts of this ruling yet since it’s still nascent, but a third of people in L.A. County are foreign-born. If you consider just the volume of that population running businesses in this county, you can see the writing on the wall that their access to SBA lending is going to be severely harmed by this ruling, and we worry about the long-term impacts of that. If the capital needs arise and they get funneled into a product that’s going to cost them more money and interest, it’s going to harm their ability to grow the local economy.
The real challenge is that macroeconomic conditions are affecting businesses, primarily tariffs and continued inflationary costs and increases and pressure on wages and all those things. The only alternative to getting the capital you need to either sustain working capital or plan for growth and expansion is going to be through some of these products.
Are there other policy changes that you’ve seen affect access to SBA lending in L.A.?
We have been frankly dismayed by some of the actions (President Donald Trump’s) administration has taken in regards to the broader small business support and funding ecosystem. They’ve closed down the Minority Business Development Agency. Budget proposals have included severe cuts to the Small Business Development Center, Women’s Business Development Center and Veterans Business Development Center network that the federal government supports. Those organizations help businesses get connected to funding opportunities. There have also been threatened cuts to the CDFI Fund. Those organizations are really trying to serve that small-dollar capital access gap that the larger banks and the SBA programs, broadly speaking, won’t serve.
(The administration) also established grant funding through the SBA, specifically targeting manufacturing businesses. But in setting up that program, they cut basically every other small business grant program that they did have available at that time. This myopic focus on manufacturing ignores the forest for the trees. It’s one thing to want to support that sector, but you need to support small businesses holistically if those specific sectors are going to be successful.
As we come off a record year for loan volume and look ahead, where do you see SBA demand and access going in the next 12 to 18 months?
We launched a Voice of Main Street survey of our network at the beginning of last year, and what we’ve seen consistently since launching is a steady decline in optimism for small businesses and more pressure on both declining revenues and increasing expenses. When you have declining optimism, you have less desire to take on debt and risk to try and grow and expand the business.
I don’t know the full reason for the increase in the volume of SBA lending. Part of me feels like it could be at least part a reaction to businesses needing to cover increased costs brought by tariffs. We’ve seen other actors popping up, offering to buy businesses’ tariff refunds off them for pennies on the dollar and things like that.
I would hope that the government would reverse course on some of these policies that really are harmful and detrimental to small businesses, and in doing so, that might increase desire and demand for SBA lending for growth and expansion. What you’re seeing potentially are Band-Aid solutions for businesses trying to keep up with an economy that’s on shaky ground, and I’m afraid of what 12 to 18 months might look like if it continues to go this way.
