SBA - Small Business Administration

How the SBA Can Help a Small Business Thrive

Could an SBA Loan Help Your Business?

The SBA, or Small Business Administration, is a U.S. government agency that assists small businesses by providing a wide range of support services. The stated mission of the SBA is as follows:

… to maintain and strengthen the Nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses and by helping businesses and families recover from economic and other disasters.

What is the SBA?

The SBA is an independent government agency, working under the authority of the Small Business Act of 1953. Issues and responsibilities pertaining to small business are handed off to the SBA by the secretary of commerce.

Its administrator and deputy administrator are appointed by the president and must be approved by Congress.

There are over 68 facilities that handle the SBA’s many programs, including the monitoring of loans.

The SBA itself is monitored by the Inspector General Office. The SBA does not grant loans (with one exception: the Disaster Relief Loan). It does, however, guarantee lenders against borrower defaults for approved business loans that are offered by banks and other lenders.

Overview of SBA’s Role in Loans

Many believe that SBA loan programs are usually provided for people with poor credit, who are ineligible for traditional loans, or that they supply funding for startup businesses.

However, SBA programs actually have an entirely different set of purposes.

They make loans with longer repayment periods available.

They also help business owners establish payments that are equal to the previous year’s profit, as opposed to the payments terms that most banks offer, which is usually no more than two-thirds of the previous year’s profit.

SBA loans are often used to purchase commercial property, particularly buildings that are or will be used by a small business.

Loan Programs

The SBA has several programs, including the following:

• The Loan Guarantee Program helps small businesses and entrepreneurs start or grow a business. This program makes capital available through banks and other lending institutions.
• The MicroLoan Program provides up to $35,000 through non-profit intermediaries. This funding goes to small businesses that would not qualify for business loans with more traditional lenders.
• The Economic Development Program operates in each state of the U.S. and provides counseling and training to small businesses.

Please visit SBA.gov for more information.

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