United Bank & Trust Blog

Kenny Leonard

In an analysis of small businesses and jobs the SBA Office of Advocacy says that over a recent 15-year period, small businesses created some 65 percent of the net new jobs in the private sector. (http://www.sba.gov/advo/research/rs359tot.pdf)

SBA Advocacy economist Brian Headd notes that many of the new jobs are in new business start ups, but an even larger share are in expanding firms of all sizes—particularly mid-sized firms with 20-499 employees.

“More and more, we’re finding that both new start ups and ongoing high-growth firms have important roles to play in the labor market,” said Acting Chief Counsel for Advocacy Susan M. Walthall. “Fast-growing firms scattered across the economy create a large share of jobs—and because no one can predict which idea will be the next to catch on, it’s important to create an environment in which a wide spectrum can start up and expand.”

Advocacy’s analysis of the quarterly Bureau of Labor Statistics data show that over the 15 years from 1993 to mid-2008, 31 percent of net job gains (jobs created minus jobs lost) came from the opening of new establishments. An even larger share—the remaining 69 percent—were from ongoing firms of all sizes that expanded. (These net figures are based on establishment openings minus closings and establishment expansions minus contractions.)

The business cycle is an important factor in the net creation or loss of jobs. In the current downturn, firms with fewer than 20 employees began losing jobs as early as the second quarter of 2007. From 2008 to the second quarter of 2009, these smallest firms accounted for 24 percent of the net job losses, while those with 20-499 employees accounted for 36 percent; the remaining 40 percent of job losses were in large firms with more than 500 employees.

United Bank & Trust and United Structured Finance Company (USFC) are committed to our local small businesses. We all have a vested interest in helping to grow or help start-up businesses in the local communities we work and live. USFC is proud to be the largest SBA lender in Washtenaw, Livingston and Lenawee counties and is proud to be a positive force contributing to the growth in jobs cited in the study.

Don’t hesitate to call on us with any questions, comments, or concerns. Have a great week!

About The Office of Advocacy of the SBA

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers.  For more information, visit www.sba.gov/advo, or call (202) 205-6533.

For more information and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo.