Small Business Administration facts for kids
Seal of the SBA
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Logo of the SBA
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| Agency overview | |
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| Formed | July 30, 1953 |
| Preceding agency |
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| Jurisdiction | Federal government of the United States |
| Headquarters | 409 Third St SW Washington, D.C., U.S. |
| Employees | 3,293 (2015) |
| Annual budget | $710 million USD (2015) |
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The United States Small Business Administration (SBA) is a special agency of the United States government. It helps people who want to start or grow a small business. The SBA's main goal is to make the nation's economy stronger. It does this by helping small businesses get started and succeed. The SBA also helps communities recover after big disasters.
You can think of what the SBA does as the "3 Cs":
- Capital: Helping businesses get money (loans).
- Contracts: Helping small businesses get government jobs.
- Counseling: Giving advice and training to business owners.
The SBA works with banks and other lenders to offer loans. The SBA guarantees part of these loans. This makes it easier for small businesses to get the money they need. For example, after the economy faced problems in 2008, the SBA increased its loan guarantees to help more businesses.
The SBA also helps small businesses get a fair share of government contracts. The government aims to give 23% of its main contracts to small businesses. Some programs specifically help businesses owned by women or veterans with disabilities. The SBA also has offices in every U.S. state. It supports many counseling groups, like Small Business Development Centers (SBDCs) and Women's Business Centers. These groups offer free advice to over 1 million business owners each year.
Contents
History of the SBA
The SBA was created on July 30, 1953. President Eisenhower signed the law that started it, called the Small Business Act. This law was made to "aid, counsel, assist and protect" small businesses.
Over the years, some people wanted to close the SBA. For example, in 1996, some members of Congress tried to shut it down. But the SBA survived and even got more money in 2000. Later, the Bush Administration also tried to cut its funding. However, the Obama administration strongly supported the SBA. It helped the agency get more money and expand its programs. In 2012, President Obama even made the head of the SBA a part of his Cabinet, which is a group of top advisors.
How the SBA is Organized
The SBA has a main leader called the Administrator and a Deputy Administrator. It also has many different offices, each focusing on a specific area. These areas include:
- Helping businesses grow.
- Managing loans.
- Helping after disasters.
- Supporting women-owned businesses.
- Helping veteran-owned businesses.
- Dealing with government contracts.
SBA Lending Programs
The SBA offers different types of loans to help small businesses. These loans are usually given by banks, with the SBA guaranteeing part of the loan. This makes it less risky for banks to lend money to small businesses.
Loan Guarantee Program
The 7(a) Loan Guarantee Program is the most common SBA loan. It helps entrepreneurs start or grow their small businesses. Businesses can use this money for many things, like buying supplies, paying for daily operations, or buying equipment. Some types of businesses, like real estate investment firms, cannot get these loans. SBA loans often have easier rules for down payments and what you need to offer as collateral.
Disaster Loan Program
The SBA also offers special loans after a declared disaster, like a hurricane or flood.
- Homeowners and renters can get low-interest loans to fix or rebuild their homes.
- Businesses can get low-interest loans to recover from disaster damage. These loans help businesses get back on their feet quickly.
Microloan Program
The Microloan program provides smaller loans, up to $50,000. These loans are given through special nonprofit groups. These groups then lend the money to small businesses and child-care centers. The program also offers advice and training to help these small businesses succeed.
Programs for Entrepreneurs
The SBA has many programs to help people learn how to run a business.
Small Business Development Centers
There are about 900 Small Business Development Centers (SBDCs) across the country. They are often located at colleges or universities. SBDCs offer free or low-cost training and advice to small business owners. They help with things like writing business plans and marketing.
The Office of Women's Business Ownership
This office helps women entrepreneurs. It works to support and empower women who own businesses.
Women's Business Centers
Women's Business Centers (WBCs) are part of a national network. There are over 100 WBCs across the U.S. They help women start and grow small businesses. WBCs offer training, mentoring, and help with getting loans. They serve over 100,000 women entrepreneurs each year. Many of the women they help are from low-income backgrounds or are people of color. WBCs often offer services in many different languages.
SCORE
SCORE is a group of volunteer business mentors. It was started in 1964 and works with the SBA. SCORE has helped over 10 million people who own or want to start a business. In 2016, its 10,000 volunteer mentors helped create over 54,000 new small businesses.
SCORE's main service is its mentoring program. Experienced business leaders volunteer their time to give free advice to small business owners. They help with things like creating business plans, developing products, and hiring staff. You can meet with a mentor in person, or get advice by email or video. SCORE also offers free and low-cost workshops online and in person.
Veteran Business Outreach Centers (VBOC)
The SBA also has Veteran Business Outreach Centers. There are 22 of these centers. They help businesses owned by veterans and their families. They also teach a program called "Boots to Business" to help veterans start their own companies.
Federal Contracts and Business Development
8(a) Business Development Program
The 8(a) Business Development Program helps small businesses owned by people who have faced social or economic challenges. This includes women and minority groups. The program helps these businesses grow and develop for a period of nine years. It helps them get government contracts, which can create many jobs. About 5% of the government's small business contracts go to 8(a) firms each year.
Office of Hearings and Appeals
The Office of Hearings and Appeals (OHA) is a separate office within the SBA. It was created in 1983. The OHA listens to appeals (requests to review a decision) about certain SBA decisions. For example, if a business disagrees with a decision about its size or whether it qualifies for a special program, it can appeal to the OHA. The OHA makes its decisions public a few days after they are made.
See also
In Spanish: Agencia Federal de Pequeños Negocios de Estados Unidos para niños
- Administrator of the Small Business Administration
- Title 13 of the Code of Federal Regulations
- Business Development Bank of Canada
