Small Business Administration

FEMA - 42344 - Small Business Administration Opens Disaster Loan Center

Small Business Administration (SBA) is a United States government agency that provides support to entrepreneurs and small businesses. The mission of the SBA is to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters. The agency's activities are summarized into several key services: providing loans, loan guarantees, contracts, counseling sessions, and other forms of assistance to small businesses.

History

The Small Business Administration was created on July 30, 1953, through the Small Business Act. Its function was to aid, counsel, assist, and protect the interests of small business concerns, to preserve free competitive enterprise, and to maintain and strengthen the overall economy of the nation. Since its inception, the SBA has delivered millions of loans, loan guarantees, contracts, counseling sessions, and other forms of assistance to small businesses.

Loan Programs

The SBA provides a variety of loan programs for very specific purposes. These include:

• 7(a) Loan Program: The SBA's most common loan program, which provides loans up to $5 million for various types of businesses.
• 504 Loan Program: Provides long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization.
• Microloan Program: Offers up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand.

Disaster Loans

The SBA offers disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. These loans can be used to repair or replace items damaged or destroyed in a declared disaster.

Government Contracting

The SBA also helps small businesses in obtaining government contracts and provides surety bonds for small contractors.

Counseling and Training

Through its resource partners, such as the SCORE Association, Small Business Development Centers (SBDCs), and Women's Business Centers (WBCs), the SBA offers counseling and training to entrepreneurs and small business owners.

Criticism and Challenges

While the SBA has been instrumental in helping many small businesses, it has faced criticism over the years. Critics argue that the agency has been inefficient, that its loan programs have disproportionately benefited larger businesses, and that it has struggled to reach minority-owned businesses effectively.

Recent Developments

In response to the COVID-19 pandemic, the SBA has been at the forefront of administering the Paycheck Protection Program (PPP) loans to help businesses keep their workforce employed during the crisis.

See Also

• Entrepreneurship
• Economic Development
• Business Plan
• Loan Guarantee