The Small Business Administration (SBA) is a government organization dedicated to assisting small businesses in the United States. The SBA does this by providing grants, mentoring, and services for new and existing small businesses. Small businesses can face numerous challenges when starting up or growing their business. That's why the SBA exists to help. Read on to learn more about the SBA and how it may be able to assist your business as you grow.
The Small Business Administration (SBA) is an agency of the federal government that assists with financing, training, and support for small businesses— not a stand-alone nonprofit organization. Rather than applying directly to the S&T Council, you must seek assistance through your local SBA branch office. There are almost 200 offices located throughout the country; however, smaller cities will have fewer locations — some areas only have one or two branches within a reasonable distance from most residents.
What Does the SBA Do?
The Small Business Administration was established in 1953 to provide capital to small businesses that are unable to obtain financing from private sources. The SBA makes loans, guarantees loans, and provides other assistance to help small businesses get the capital they desperately need to start up or expand. The SBA is also responsible for administering contracting provisions that give small businesses an opportunity to compete for federal contracts that might otherwise be reserved only for larger companies. The SBA's core function is to provide assistance to small businesses in the form of loans and grants. In addition, the SBA offers services that help businesses grow, expand and succeed. Some of these services include providing business mentoring, assistance in obtaining government contracts, training workshops, and assistance with regulatory compliance.
SBA Loan Program
The SBA loan program provides financing in the form of loans and grants to small businesses that are unable to access financing from banks or other private sources. The SBA guarantees these loans, which means that if the borrower is unable to repay the loan, the federal government will pay the lender. The SBA's 7(a) Loan Guarantee Program provides long-term, fixed-rate financing (20 years or less) to small businesses.
This program also provides fixed-rate loans to lenders who make loans to small businesses. The SBA's Microloan program offers fixed-rate, long-term loans to start or expand a small business that employs low-income individuals. The SBA's Surety Bond Guarantee Program is used by contractors and their contractors to obtain surety bonds that permit them to work on federal contracts.
SBA Equity Program
The SBA's Microloan Equity Investment Program provides equity investments to microloan lenders who serve low-income entrepreneurs. The SBA guarantees a percentage of the equity investment in these microloans. The SBA's Preferred Lenders Program allows preferential treatment for lenders who commit to loan funds to economically underserved areas. These programs help increase the availability of microloans for low-income entrepreneurs and reduce the amount of capital needed to start or operate a microloan lender.
The SBA's Microloan Program also offers financial assistance and advice to low-income entrepreneurs who want to start their own businesses. The SBA's Business Development Program offers free one-on-one counseling services to aspiring and current business owners. The SBA's Women's Business Development Program offers grants and one-on-one counseling services to women interested in starting or growing their own businesses.
7(a) Loan Guarantee Program
The 7(a) Loan Guarantee Program provides a guaranteed source of long-term fixed-rate financing for small businesses that cannot obtain financing from private sources. The program's loan funds are provided by private lenders. The SBA guarantees a portion of the loan to the lender, thus ensuring that the lender will be repaid even if the small business defaults on the loan. The SBA's Contracting Assistance Program offers assistance with obtaining federal contracts and competing for federal contracts that are reserved only for small businesses.
SCORE Counseling and Training
SCORE's network of more than 10,000 volunteer mentors across the United States and in Puerto Rico provides free one-on-one advice, workshops, and seminars on starting, growing, and selling a business, financing a business, hiring and managing employees, marketing, and other topics, as well as advice on federal programs and resources for small businesses. SCORE's services and resources are available through its website, email, live chat, and app.
The website offers information on topics such as how to start a business, how to market a business, how to apply for government grants, and how to obtain loans. The website features guides on writing a business plan, marketing your business, and choosing the right business entity. It also offers resources such as a business consultant finder, business financing resources, business grants, and a list of government agencies.
The SCORE program provides free mentoring from experienced business people who have been successful in starting, growing, and selling their businesses. SCORE also provides information about federal programs and resources for small businesses.
SBA Assistance for Veteran-Owned Small Businesses
The U.S. government has created and implemented several programs to assist veteran-owned small businesses with obtaining the capital they need to start or grow their businesses. These programs include SBA loan assistance, government contracting set-asides, grants, and other activities designed to assist veteran-owned small businesses. For example, SBA 7(a) loans are available to veteran-owned small businesses with a creditworthy business plan. The SBA partners with other government agencies to provide contracting set-asides for veteran-owned small businesses. Many government agencies have programs to hire veterans to work for the government.
Other Services Provided by the SBA
The SBA also conducts research and publishes handbooks and guides of interest to small businesses. The SBA's Disaster Assistance Program assists small businesses and nonprofits in recovering from natural disasters. The SBA's Advocate for Small Business program assists with resolving disputes between small businesses and large companies that are their customers or suppliers.
How to Find Out If You're Eligible for an SBA Loan or Grant?
The SBA offers a simple way to determine if your small business is eligible for a loan or grant. The SBA has set up a website where you can enter information about your business and then find out if you're eligible for any assistance. The website address is www.sba.gov.
You can also reach out to an SBA-approved lender or broker to find out how to get a small business loan. The SBA recommends that you start researching and applying for a loan at least six months before you actually need it. This will give you enough time to navigate the application process and receive approval.
Bottom Line
The SBA offers a variety of financial and other support services for small businesses. You can learn more about these programs by visiting the SBA website, www.sba.gov. If you're a small business owner, it's worth your time to see what assistance is available to help your business grow and succeed. SBAs also hosts a variety of events, workshops, and forums where you can meet other entrepreneurs, seek advice, and get feedback on your business plan. If you're looking to expand your business or start a new one, the SBA has resources to help you at every step of the way.
Visit the SBA website to learn more about the agency's financial and non-financial services and how to get involved with these programs. You can also contact your local SBA office to speak with an advisor about how these programs can benefit your business. For more informative blogs on young professionals and business strats, check out SYP.net.