I’m sure by now you’ve heard the term ‘SBA’ mentioned once or twice, but who are they, what do they do, and why do they exist? In short they are a government run organization created to help small businesses succeed; we will discuss this in more detail in today’s article.
The SBA was established in 1953 with the mission of strengthening the American economy by helping businesses. They are a federally run institution and are funded by in large by tax dollars. They have helped tens of thousands of business owners achieve their goals through various programs.
So what are those programs? The most famous is the SBA loan program. Often mistaken as direct lending program, these are simply loans that meet certain criteria set out by the small business administration. These criteria include certain terms and conditions as well as limits placed on interest rates. Additionally, they also provide direct funding for disaster relief loans and also guarantee/subsidize loans for businesses in certain industries deemed of high importance to society.
Another service provided by the SBA is their business plan assistance. They have consultants with years of industry experience who can sit down with you and assist you in creating or improving a formal business plan. This is a very important document to the success of your company as it will outline in detail any potential costs in detail. Not only will this help you get a loan if you want one, but it also makes clear to you where perhaps your understanding of your expenses or potential profits may be wrong.
So, why does the SBA Exist? Their mission as stated above is to help strengthen the US economy. They do this by assisting small businesses to obtain loans, and run their businesses more successfully. It was determined many decades ago that small businesses provided a large diverse framework of ideas, and that diversity of thought, and a wide distribution of resources was good for the stability of the economy. This seems to hold true, but whether or not a federal entity is necessary or useful is a matter of debate. In fact, there was short period of time in the 1990s where it seemed the small business administration might lose their funding and cease to exist. But, they survived that vote and continue to exist to this day. To date they have assisted tens of thousands of companies in obtaining the funding they need.