White House Working Capital Program Targets Small Business Stability Through 2027

Access to working capital is critical for the survival and growth of small businesses.

And with the news from the National Federation of Independent Business (NFIB) Small Business Optimism Index released Tuesday (Aug. 13) that — despite ongoing cost pressures and macro headwinds — small and medium-sized businesses (SMBs) in the U.S. are feeling the highest level of optimism since February 2022, delivering the working capital products and financial services they need to thrive is top of mind for savvy lenders and financial players.

But it’s not just private sector players excited to capture the SMB opportunity while spurring Main Street growth. The U.S. government’s Small Business Administration (SBA) is getting into the mix, too.

On Aug. 1, the SBA launched a new category of loan under the SBA 7(a) Loan umbrella, the Working Capital Pilot (WCP) Program. The SBA WCP loan program 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 fund projects or manage cash flow.

Small businesses often face irregular cash flow, where their income might not align with expenses. Working capital helps bridge the gap, ensuring that they can pay bills, purchase inventory, and meet payroll even during lean periods.

Comments for the program closed Wednesday (Aug. 14), and the WCP will run at least until the initial end of the authorization period, set for July 31, 2027.

Read more: White House Ramps Up Small Business Working Capital Offerings

Building a Competitive Edge With Working Capital Innovations

For small businesses, access to working capital is not just a matter of convenience; it’s a necessity. It underpins their ability to manage daily operations, respond to challenges, and seize growth opportunities. Without it, even a profitable business can struggle to survive, especially in today’s fast-paced and often unpredictable economic environment.

The SBA’s site stresses 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 be 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, per the agency.

By participating in the program, the SBA notes that lenders can offer competitively priced lines of credit, helping small businesses expand, strengthening their operations and ultimately create more jobs.

Only about 8.5% of small and medium-sized businesses (SMBs) have found working capital loans from banks to be readily available, according to “What’s Next in Credit: Why SMBs Prefer Corporate Credit Cards for Short-Term Financing,” a PYMNTS Intelligence and Cross River collaboration.

More than half of respondents said coming into 2024 that they would consider tapping new financing. Among those considering new financing, more than 26% would consider using an online lender and about a third would use a large national bank.

See also: Embedded Lending Puts SMBs at Center of Financial Services Landscape

According to the SBA, the agency’s own evaluation of the working capital program’s success will include, but will not necessarily be limited to, the number of WCP loans approved, the adoption rate (number of lenders making WCP loans), a comparison of number of loans approved and adoption rate versus the same in 7(a) CAPLine and EWCP programs and among the top SBA Lenders, whether the costs (including losses) of the pilot are within an acceptable range, and portfolio performance as it relates to other 7(a) programs.

“Small business owners are using a variety of solutions. They may have seven-plus business apps in their back office, and they’re looking for a simpler and more efficient solution,” American Express Vice President of Marketing, Business Blueprint and Small Business Banking Brett Sussman told PYMNTS in an interview posted Thursday (Aug. 15).

And as covered here, the SMB lending market is heating up — with the most recent earnings season revealing that companies are increasingly focused on the segment.

The demand comes as the PYMNTS Intelligence report “Main Street Small Business Growth Exceeds GDP for First Time in Two Years” found Main Street small and medium-sized business (SMB) growth has exceeded gross domestic product (GDP) growth for the first time in two years. That expansion would feed into plans to tap working capital to keep expanding.