The Small Business Administration (SBA) has been helping small businesses with many things, including loans, counseling sessions and contracts, for almost 60 years. Still, there are many people who don’t know much about it or how it came to be.
There were several predecessors to the SBA. The first was the Reconstruction Finance Corporation (RFC), which was founded in 1932 to provide government loans to companies suffering during the Great Depression. Next came the Small War Plants Corporation (SWPC), which started assisting small businesses in 1942 by providing and helping procure loans and advocating for small business to the federal government and big business.
After WW2, some of the duties that would eventually belong to the SBA were split between the RFC, the Office of Small Business (OSB) and the Department of Commerce. During the Korean War, another department called the Small Defense Plants Association (SDPA) was created to basically perform duties similar to those that the SWPC performed during WW2. In 1953, the RFC was abolished and its functions, as well as the small business function of the other agencies mentioned, were assigned to the newly-formed SBA.
The SBA’s charter stated that they would make sure that small businesses received a fair proportion of government contracts and surplus property sold by the government. Soon they were making loans and guaranteeing bank loans to small businesses. In 1958, the SBA expanded its loan program to try to help small businesses get the capital they needed to keep pace with improvements in technology. In 1964 they started providing loans tailored to people at or below the poverty level who wanted to start a new business.
Today, the SBA has expanded its services to small businesses considerably and it now offers loans, management assistance, help in procuring government contracts, assistance with international trade and loans and assistance to victims of natural disasters. The organization also provides specialized outreach to women, minorities and veterans of the armed forces.