Today will be discussing the small business administration and its function. In general the SBA is a federally run organization that was established to assist small businesses. They assist with planning as well as advising on how to obtain loans. We’ll discuss more what they do in detail in today’s discussion.
The small business administration or SBA for short was established in 1953 as a means of having the federal government encourage new small businesses. Their size and scope have changed considerably since then but their primary goal remains the same. Some question whether or not the organization should continue to exist as it does, at taxpayer expense. In fact there was a brief time in the mid-90s that it looks as though the organization would in fact cease to exist. However if they have continued on to this day and continued provide some of the following services.
One service that the SBA provides which is not commonly known is business loan planning and consulting. You can ask to have an agent assigned to you and this agent will go over your business plan with you to see where you have perhaps made mistakes or are missing necessary details. This can be very helpful when you are attempting to get a loan as a solid business plan is a must.
Also along this line the SBA will assist you in obtaining a loan for your company. Although they are not themselves a direct lender they do have a great deal of expertise and can walk you through the process of applying for a loan and explain to you some of the information which you will need in order to increase your odds of obtaining funding. There are also special loan programs which are pre-approved by the SBA which meet certain lending criteria. You should discuss these criteria with your agent to see if this loan type is appropriate for your business. Typically these are loans designed for small businesses which take into consideration your lack of business history and lower revenue.
Overall the function of the SBA is twofold. To assist your business in establishing a solid business plan which can be used to assist you in getting funding as well as to demonstrate to you where perhaps you have been unrealistic in your estimates. Furthermore they can take this information as well as your additional backing accounting documentation to help you obtain a loan from a third-party lender.