As a small business owner, you’ve probably heard of the Small Business Administration (SBA) – in passing, at the very least. For most people, SBA loans are the first thing that comes to mind. The SBA is one of the largest loan backers to small business owners in the country. The reality? they have a lot more to offer than you think.
Curious? Good. Here you’re going to get an overview of the SBA. But, you’ll also see what it does and how it can help you grow your business.
What is the Small Business Administration?
The SBA is a United States Government agency. Created post-World War II, the SBA wanted to encourage and support America’s small business owners. They wanted to help boost the economy. The guiding principles of the SBA are the same today as they were at the very beginning.
As stated on its website:
“The U.S. Small Business Administration helps Americans start, build, and grow businesses.”
SBA loans might be the most well-known of the agency’s programs. But, the SBA also provides business counseling, disaster loans, federal government contracting, and other tools to help small business owner. Getting in touch with the SBA is easy. Its main campus is in Washington, D.C.. But they have dozens of offices across all 50 states and U.S. territories. Many of these offices host local events and in-office programs for small business owners to attend.
Small Business Administration Programs
The SBA runs a variety of programs that small business owners can take advantage of to grow their business.
Access to capital is one of the biggest struggles many small business owners face. SBA loans are a primary source of funding for tens of thousands of small business owners across the country. In the 2019 Fiscal Year, the SBA reported over $28 billion through approximately 58,000 approved loans.
The primary SBA loans are the 7(a) and 504 programs. These loans are made through partner lending institutions with the SBA guaranteeing a portion of the loan. The SBA doesn’t directly loan to small business owners. The SBA 7(a) loan is the administration’s most popular. It provides up to $5 million in working capital at a low interest rate for business purposes. The SBA 504 loan provides up to $5.5 million. It can be used for real estate, equipment and other fixed asset purchases. While the 7(a) and 504 are the most popular programs, the SBA offers other financing options too.
They include SBA:
- Microloans which provide working capital up to $50,000.
- Disaster loans offer loans to businesses and homeowners who have been affected by nationally declared disasters.
- Express loans have a quick 36-hour turnaround for approval.
- Export loans provide capital for small businesses that have export financing needs.
- CAPLines are lines of credit.
- Veterans Advantage are loans for military veterans.
Each SBA loan program has specific terms, conditions and requirements. Be sure to check them before applying to any loans. Having a strong business plan and a good personal credit score are key factors for SBA loan applications as well.
Other SBA Financing Options
In addition to the loan programs above, the SBA offers a variety of other financing options for small business owners.
Small Business Grants
The SBA doesn’t offer small business grants directly. However, it does have a few programs that can help businesses focused on the cutting edge of innovation. These programs are the Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Program (STTR). They offer grants for qualified businesses producing tech or science-focused research and development programs. These businesses will also have commercial potential.
The administration also works with Small Business Investment Companies (SBIC), which invest in small businesses. While SBICs are independently owned and managed, the SBA provides oversight in terms of regulation, licensing, and funding.
The U.S. Government is one of the biggest employers in the world. That’s good news for small business owners. The government has tens of thousands of contracts available at any given time. A portion of those are reserved for small business owners.
The SBA helps support small business owners when it comes to finding and securing government contracts. The administration even offers advice and guidance through online courses and in-person help. Topics include how to become a qualified government contractor.
The SBA also has specific programs to help Women-Owned Small Businesses (WOSB). They help Service-Disabled Veteran-Owned Small Businesses (SDVOSB). And, they even aid small businesses located in historically underutilized business zones. These businesses can be in the HUBZone program, to secure government contracts as well.
Small Business Services
The SBA also offers programs and services for small business owners that offer help to support and grow businesses. These programs are provided free of charge for small business owners.
SBA’s Counselors to America’s Small Business SCORE program has chapters throughout the country. The program is comprised of a network of volunteers who serve as mentors to small business owners. SCORE program members can receive help with everything from creating a business plan to marketing. They receive help through in-person events, online courses and workshops.
Small Business Development Centers
The SBA also partners with many colleges and universities across the country to form Small Business Development Centers (SBDC). These centers work with local small business owners on a variety of training and development programs.
SBA Learning Center
Through its online learning portal, the SBA offers dozens of free courses. They cover everything a small business owner would want to know. Classes range from Social Media Marketing, to Accounting 101. All courses are free.
Other Outreach Programs
Additionally, the SBA also has a vested interest in helping women, veterans and minority business owners succeed. To that end, the administration has smaller outreach centers geared specifically towards these business owners. These programs offer a bit more specialized training and guidance.
Small Business Owners and the SBA
The bottom line? The Small Business Administration is a phenomenal resource for small business owners. They offer everything from classes and mentorship to a variety of funding options. The SBA strengthens the backbone of the American economy: small businesses and their owners.