Update: On January 29, The Office of Management and Budget (OMB) released a Memorandum rescinding the previous day’s guidance to freeze federal funding programs and is directing all agencies to contact their general counsel should they have questions regarding implementing the President’s Executive Orders. The situation remains fluid, and we will continue to update our members on any major developments.
Today’s freeze of federal grant funding related to Diversity, Equity, Inclusion, and Accessibility (DEIA) initiatives will hurt small businesses across the country – from rural communities to cities – as well as thousands of nonprofit employees who have dedicated their careers to supporting small businesses.
CAMEO Network reaffirms its commitment to fostering an inclusive economy where all entrepreneurs—regardless of their background—have the opportunity to thrive. Many initiatives have played a crucial role in leveling the playing field, creating targeted pathways for women, people of color, veterans, and other underrepresented groups to participate fully in federal contracting, private industry, and philanthropy. These programs have been instrumental in addressing systemic inequities so more small business owners can drive innovation, economic mobility, and wealth generation in their communities.
Every day, America’s small businesses thrive thanks to support from federally funded work and programs. Our nation’s Small Business Development Centers (SBDCs) enabled small businesses to create $6.6 billion in sales and nearly 81,000 new jobs last year. SBDCs have more than doubled their federal investment dollars, turning $136.6 million in federal appropriations into $216 million in federal revenues and $327 million state revenue last year. Veterans Business Outreach Centers, Women’s Business Centers, and other nonprofits must be recognized for reaching hundreds of thousands of small businesses every year.
The funding suspension affects the U.S. Department of Agriculture’s small business programs, including Rural Business Development Grants and the Rural Microentrepreneur Assistance Program (RMAP). These programs play a key role lifting up rural entrepreneurs and enabling them to create jobs and build prosperity in their communities.
Additionally, the freeze pauses funding for the Community Development Financial Institutions Fund (CDFI Fund), a vital source of capital for small businesses – especially small businesses in low- and moderate-income communities, which may not be eligible for traditional bank loans. The CDFI Fund has enabled millions of entrepreneurs to follow the American dream of business ownership since its founding over 30 years ago.
These initiatives have provided essential tools and opportunities that enable entrepreneurs to overcome barriers, especially in times of crisis, such as the ongoing recovery from devastating wildfires and other economic challenges. They are examples (out of a 52-page list of programs) in which this order will harm entrepreneurs and the dedicated nonprofit employees that support them. In the uncertainty and chaos that follows, jobs will be lost, businesses will close, and entrepreneurs will miss once-in-a-lifetime opportunities for growth because they weren’t able to access the funding and resources they needed.
We are clear this is a fluid situation. Today, the freeze was issued, a lawsuit was filed, agencies sent you memos and a judge issued a temporary stay until Monday. We understand many of you are being impacted and we want to hear from you.
No matter the outcome, CAMEO Network remains steadfast in advocating for policies that support this country’s micro and small businesses. By investing in solutions and maintaining programs that open doors for all entrepreneurs, we can build a stronger, more resilient economy.
We will continue to update you as we receive information and look for solutions to the problems that arise.