SBA’s Community Navigator Pilot Program

SBA’s Community Navigator Pilot Program

INSIGHTi

SBA’s Community Navigator Pilot Program
March 15, 2022
Because of the extent of small business needs in the wake of the pandemic, Section 5004 of the American
Rescue Plan Act, 2021 (ARPA, P.L. 117-2) authorized the Small Business Administration’s (SBA)
Community Navigator Pilot Program (CNPP) to help current or prospective small business owners access
COVID-19 pandemic programs and resources. The program awards grants to eligible organizations (e.g.,
nonprofit organizations, economic development organizations, or local government entities) in order to
provide no-cost management and technical assistance to small business owners. Program services target
underserved businesses, such as minority-, women-, and veteran-owned businesses, and include “financial
assistance and access to capital; contracting and procurement; marketing, operations, business
development, and exporting; and industry-specific training.” Congress appropriated $100 million for
CNPP grants.
The SBA awarded grants to 51 recipients in October 2021, through a competitive process. Maximum
grant awards ranged from $1 million to $5 million, based on the proposed project’s geographic reach and
population served. Grantees have a two-year performance period during which to carry out project
activities. SBA’s Office of Entrepreneurial Development is overseeing the CNPP until it sunsets in 2025.
Program Objectives
According to the committee report accompanying ARPA, the CNPP’s primary purpose is
to make more equitable the awareness of and participation in COVID-19 relief programs for
business owners currently lacking access, with priority for businesses owned by socially and
economically disadvantaged individuals, women, and veterans.
While all small businesses may receive assistance through the CNPP, the program is designed to provide
targeted outreach to businesses underserved by the SBA, through organizations with staff who are
culturally and/or linguistically knowledgeable of underserved communities. In its CNPP Frequently
Asked Questions (FAQ), SBA states that 20.7% of the more than 7.9 million establishments with fewer
than 500 employees are in counties without any type of SBA service center (e.g., Small Business
Development Centers (SBDCs), Women’s Business Centers (WBCs), Veteran’s Business Outreach
Centers, or Service Corps of Retired Executives (SCORE)).
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Program Design and Grant Award Process
The CNPP employs a “Hub and Spoke” service delivery model. A grantee becomes the lead organization,
serving as a “Hub,” and is charged with mobilizing a network of no fewer than five “Spoke”
organizations that directly serve businesses. Some Hubs are located within the same state or county as
their Spokes while some may serve larger areas. According to the Notice of Funding Opportunity
(NOFO), Hubs must have been in operation for two or more years and be one of the following entities:
 a 501(c) status nonprofit organization;
 an economic development or similar organization;
 a Native American tribal government, or tribal organization other than a federally
recognized tribal government;
 a local government (state, county, city, or township);
 an SBA Resource Partner (e.g., an SBDC, WBC, Veterans Business Outreach Center);
 a Community Development Financial Institution (CDFI); or
 a nonprofit college or university.
Hubs are responsible for funding Spokes, overseeing program operations, and acting as intermediaries
between the SBA and Spoke organizations. Although Hub organizations are not responsible for Spoke
organization performance, they must assist Spokes in fulfilling their project obligations. In turn, Spokes
provide direct assistance to business owners and represent a sector of small business owners to the SBA.
According to the NOFO, the SBA used a tiered proposal solicitation “to ensure the greatest amount of
equity and diversity of geographical and service delivery reach possible.” The three project award tiers
included:
1. “Tier 1” awards, which were capped at $5 million and intended for multi-state projects
serving more than 500,000 people;
2. “Tier 2” awards, which were capped at $2.5 million for projects supporting a state,
region, municipality, or city with at least 500,000 people; and
3. “Tier 3” awards, which were capped at $1 million for projects supporting a region,
municipality, city, or tribal or rural community with fewer than 500,000 people.
The SBA reviewed 502 applications for the CNPP and funded 51. Nearly 450 Spoke organizations are
associated with the funded Hubs. Thirty-four states and Puerto Rico are home to a Hub and every state is
home to at least one Spoke with the exception of North Dakota and Kansas. Five states, California, Ohio,
Georgia, Texas, and Missouri, have more than 20 Spokes. States with only one Spoke are Maine, New
Mexico, Nevada, and West Virginia.
Congressional Interests
There is some congressional discourse concerning the need for the CNPP, as well as the appropriateness
of its scope. One Member and program advocate stated in the Congressional Record that the CNPP is
needed to “help those who are not as sophisticated to be able to get the help that they need” and whose
needs are not being met by SBA resources: “Yes, we have the Women’s Business Centers. Yes, we have
the Small Business Development Centers. But we need more help.” Others, however, have expressed
concern about the CNPP’s potential duplication of existing SBA programming and questioned whether
the CNPP’s duration suits its pilot status (found in the committee report accompanying ARPA).

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Prior to funding the CNPP, in FY2020, Congress appropriated $261 million for entrepreneurial
development programs in P.L. 116-93, plus an additional $265 million for SBA training programs in the
CARES Act (P.L. 116-136) to assist small businesses adversely affected by the pandemic. Congress may
be interested in how CNPP services affect small business participation in SBA programs, and how CNPP
grantee outreach differs from SBA service centers’ and resource partners’ typical outreach. Congress may
be specifically interested in data provided in CNPP grantee reports to the SBA. According to the NOFO,
the SBA will monitor CNPP performance metrics, including the number of:
 unique clients who receive assistance;
 clients approved for loan or grant funding (including new and existing businesses);
 jobs created or retained; and
 the percent of revenue increase (gross sale dollars).
As described in CRS Report R41352, Small Business Management and Technical Assistance Training
Programs, Small Business Management and Technical Assistance Training Programs, discussions about
the duplication of small business technical assistance services and opportunities for improved
coordination, merger, or elimination of programs predate the CNPP, as does advocacy for tailored
programs for specific demographic groups.

Author Information

R. Corinne Blackford

Analyst in Small Business and Economic Development
Policy

Disclaimer
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