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SBA Small Business Administration

SBA or The U.S. Small Business Administration, is a federal agency started in 1953 for the purpose of helping U.S. small businesses become successful. The logic behind creating the SBA is that most employees in the U.S. actually work for small businesses. So by default, helping small business in turn helps the U.S. economy. A whopping 53% of Americans are employed by a small business. Interestingly, 99% of all businesses registered in the United States are considered small businesses, defined by the SBA as companies with 500 or fewer employees.

SBA Programs

So how does the SBA help small businesses? The Small Business Administration was formed by congress under the Small Business Act to "aid, counsel, assist and protect" the interests of small businesses. The SBA currently does this by providing some really helpful resources and programs in several key areas:

  • Business Counseling

  • Disaster Loans

  • Federal Government Contracting

  • Guaranteed Business Loans

 

SBA Counseling Programs

Most helpful to startup businesses, the SBA provides free business counseling from "seasoned business experts". This is done through partnerships with organizations like SCORE (Service Corps of Retired Executives), a nonprofit network of over 10,000 business volunteers, and ASBDC (America's Small Business Development Center), a network of over 1,000 centers found in every major city in the U.S. You can meet some of America's finest business executives through one of these organizations.

  • SCORE - Service Corps of Retired Executives

  • ASBDC - America's Small Business Development Center

SBA Disaster Loans

Most business experts will swear to you that "the SBA does not provide loans, the SBA only guarantees them". This statement is technically false. The SBA does indeed provide low interest loans to both businesses and homeowners (renters too) in certain situations of declared disasters. These loans can be very helpful if a disaster causes you to suffer losses in real estate, personal property, equipment, machinery, inventory or economic injury. The caveat is that your insurance (or FEMA) was unable to cover a portion of your losses. The SBA publishes and updates a master list of qualified disasters on their website. You can find the list here. Disaster Loan Program highlights are as follows:

  • For Individuals, Businesses, Homeowners and Renters

  • Low interest loans

  • Covers loss of property, equipment, inventory, machinery or other economic loss

  • Applies to losses not covered by insurance or FEMA

SBA Federal Government Contracting

Most everyone has heard of federal government programs that provide certain preferential treatment for businesses owned 51% by minorities. And yes, being a women qualifies. The federal government is the largest purchasing entity on the planet, and through the SBA, certain eligible businesses may compete for these lucrative contracts through several programs. SBA programs for disadvantaged or minority businesses include 8(A) (the 8a Business Development Program), WOSB (the Women-Owned Small Business Development Program) and HUBZone (the Historically Underutilized Business Zone Program). To see if your business is eligible, visit the SBA website page here.

  • 8(A) - 8a Business Development Program

  • WOSB - Women-Owned Small Business Development Program

  • HUBZone - Historically Underutilized Business Zone Program

SBA Guaranteed Business Loans

And of course, the one coveted SBA program that we often think about is the SBA Guaranteed Business Loan Program. As the program name suggests, this SBA program does not provide loans, it simply guarantees the loans. Under three major types of business loans, the program allows a small business to borrow $500 to $5,000,000 from an approved SBA lender These loan are partially guaranteed by the SBA, up to 85%. To the business lenders, this guarantee is a big deal. An SBA loan guarantee significantly reduces a lender's risk so that marginal loans, that may otherwise be denied, get approved.

 

In 2017, The SBA approved more than 68,000 loans under the Guaranteed Business Loan Program through thousands of approved SBA lenders. Last year, the SBA Guaranteed Business Loan Program allowed business owners to receive more than 30 billion dollars in guaranteed loans. Pretty darn impressive. Types of SBA Guaranteed Business Loans include:

  • SBA 7(a) Loan Program - Loans up to 5 million dollars for working Capital

  • SBA 504 Loan Program - Loans up to 5 million dollars for real estate or facility purchases

  • SBA Micro Loan Program - Loans under $35,000

Need More Information?

Need to know more? BP Consultants is your premier resource for learning about the SBA and its programs for small businesses. As a nationally recognized SBA consultant, BP Consultants provides small business owners with a variety of useful services geared to maximize the SBA's benefits to your small business. BP Consultants offers SBA consulting services, and SBA Loan application services that have helped business owners like yourself understand, target, apply for, and get their businesses approved with the SBA.

  • SBA Consulting

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