The Small Business Administration (SBA) is a federal agency that was created in 1953. The SBA was designed to provide management and financial assistance to small businesses. One of the main activities of the SBA is to guarantee small business loans through financial institutions, but they also give general aid and assistance, are a wealth of information, and they also protect and advocate on behalf of small businesses within the federal government.
Loans
The SBA offers a number of financing programs to small businesses. In 2003-2004 almost $19 Billion in financial assistance and long term credit was provided to almost 90,000 small businesses through the SBA’s network of participating financial institutions and certified development companies. Let’s examine some of the most popular loans that are available through the SBA.
1.The 7(a) General Loan Program is the main type of loan that the SBA provides and is more like a guarantee of a loan provided by a commercial lender. If a new business has the proper qualifications, the SBA will guarantee up to 80 percent of the amount provided by the bank.
2.The “LowDoc” is a fairly new type of SBA loan and, as the name indicates, is a low-document lending program for those who need less than $150,000, with the SBA guaranteeing up to 85 percent of that amount. This type of loan requires much less paperwork than the traditional SBA loans require. This is currently the most popular form of financial assistance from the SBA.
3.The Export Finance Program is designed to promote exporting, as the name indicates. This loan offers specialized guarantees to provide working capital and longer-term financing.
4.The Micro loan is a program for inner-city and rural area businesses; this type of loan is also often used for home-based businesses. This type of loan is for businesses that need small-scale financing. The average loan size is about $10,500 and these loans are also for a shorter-term. The loans are administered through local nonprofit groups.
5.The 504 Development Company Loan Program uses public and private partnerships to finance the fixed assets of the business.
6.The Small Business Investment Company Program (SBIC) combines private capital with SBA-guaranteed loans, which can create a source of venture capital for new and developing or expanding businesses. This is the federal government’s own public venture capital organization. SBICs are privately owned and operated investment companies that partner with the federal government.
Counseling
The SBA also provides counseling and guidance to small businesses and budding entrepreneurs. Do an Internet search to find the nearest SBA office in your area, or try calling 1-800-827-5722 for more information.
The SBA provides training conferences specifically designed for female entrepreneurs.
The SBA provides an assortment of publications and audio-visual educational materials geared towards management of small business, as well as topics that cover technical assistance.
The SBA also gives guidance to new businesses that export goods outside of the United States. The particular areas of interest include the Pacific Rim, Canada, Europe, and Mexico.
Posted in 
Tags: 