Small Business Lending
Small Business Administration (SBA) Initiatives
An Overview and History about the Small Business Administration (SBA)
The U.S. Small Business Administration was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of the United States. Small businesses are critical to an economic recovery, to building America’s future, and to helping the United States compete in today’s global marketplace. Since its founding, the SBA has delivered millions of loans, loan guarantees, contracts, and other forms of assistance to small businesses.
Programs for Prospective Lenders
The SBA has developed a number of financial programs that address the various needs of small businesses. The SBA works with a wide range of lending institutions across the country that play a key role in providing financing for small businesses. Some SBA lending programs include:
- 7(a) for start-up businesses;
- CDC/504 to acquire fixed assets;
- Microloan for short-term loans up to $35,000;
- Community Express Loans for the nation’s underserved communities;
- Patriot Express for businesses that are 51 percent or more owned by veterans.
The SBA America’s Recovery Capital ARC Loan Program was established on February 17, 2009 in the American Recovery and Reinvestment Act. Benefits of the ARC Loan included a deferred-payment loan of up to $35,000. This loan program expired on September 30, 2010.
On September 27, 2010 a $30 Billion Small Business Lending Bill signed into law and established a lending fund for small businesses and includes $12 billion in tax breaks for small companies. The objective of the bill is to make more loans available to small businesses, reduce taxes for businesses and establish a lending fund available to community banks.
Programs for Prospective Borrowers
The SBA recognizes that the conventional commercial loan market may not offer many small business owners access to the capital they need to help them grow. Thus, the SBA provides a number of financial assistance programs for small businesses that are designed to meet key financing needs, including debt financing, surety bonds, and equity financing.