SBA stands for the Small Business Administration of the United States, which was
founded in July, 1953. The vision for the Small Business Administration actually
began to take form a number of years before that time, largely in response to economic
turmoil created by the Depression and World War II.
The Small Business Act of 1953 outlined the mission of the SBA as a program to help
and protect small businesses. It also made clear that the SBA must guarantee
a fair percentage of government owned contracts to small business owners.
The stated mission of the SBA is to "Maintain and strengthen the nation's economy
by aiding, counseling, assisting and protecting the interests of small businesses
and by helping families and businesses recover from national disasters."
Today's SBA initiatives also include loans, advice, and government contracts for
women, minorities, and veterans. The Administration is structured to offer loans,
to back loans from other lenders, and to counsel small business owners with the
help of several resource partners. These partners include SCORE -the Service
Corps of Retired Executives, Small Business Development Centers, Women's Business
Centers, the Veterans' Business Outreach Program, and many SBA lenders. Counseling,
training programs and other resources are provided by the SBA in conjunction with
these institutions.
From its inception through the turn of the century, the SBA has provided nearly
twenty million loans along with various other forms of help for small business owners.
Today, the Administration even offers online classes for small business owners and
has at least one office in every state. While some people complain that the
SBA is unnecessary, because they believe small companies cannot compete with large
corporations, SBA is a thriving program. It is not only the "largest single
financial backer" of businesses in this country; it is also one of the government's
most cost efficient agencies.
Small businesses create local jobs, revenue, and exciting innovations brought to
life by ambitious entrepreneurs. The Small Business Administration's three
thousand employees and many resource partners are behind them to make sure they
are afforded the opportunity to achieve the American dream.
What is an SBA Loan?
The U.S. Small Business Administration (SBA) is a federal government agency that
administers loan guaranty programs and other support services to encourage growth
and development of small businesses throughout the United States. Since its founding
on July 30, 1953, the U.S. Small Business Administration has delivered over 20 million
loans, loan guarantees, contracts, counseling sessions and other forms of assistance
to small businesses.
Loan Guarantee Program
A percentage of the loan is guaranteed by the SBA, enabling lenders to accept greater
risk on small businesses that may not currently be financially strong enough to
obtain a conventional small business bank loan.
Program Features
Two significant features that an SBA programs offer are lower down payments, and
longer term financing. This helps a small business that is just starting out,
or about to expand, to keep more cash flow for operational expenses, and put less
towards debt repayment.
Loan Purposes
SBA loans are offered for business purposes such as owner-occupied commercial real
estate, business acquisitions and start-ups; franchise financing, working capital,
improvements and renovations, inventory and equipment and debt refinancing.