Small Business Administration Background

The Small Business Administration(SBA) was founded in 1953. Since its inception, the SBA has provided massive amounts of money through loans and contract guarantees, loan guarantees in consulting assistance, and various other programs to businesses all over all of the United States.

The seeds for the creation of SBA were planted during the problems during World War I and the Great Depression and World War I and then grew because of various predecessor organizations.

Small Business Administration Agencies of the past

In 1932, Herbert Hoover instituted the Reconstruction Finance Corporation. It was a non-profit organization that sought to ease the effects from the Great Depression. It attempted to accomplish this by establishing an aid program for businesses that had been adversely affected by Great Depression. It was adopted as a personal idea of Hoover’s successor the president Franklin D. Roosevelt.

The need for assistance to small businesses grew more urgent at the time in World War II, when they faced disadvantage against larger companies. In 1942, the Smaller War Plants Corporation was established in 1942 to assist small businesses, increase their financial stability and allow them to better take an active part in war efforts. It was the Smaller War Plants Corporation accomplished this by offering direct loans to private entrepreneurs, offering incentives to big financial institutions to boost lending to small companies and also acting to advocate on behalf of small businesses in the federal procurement process.

After the war , the SWPC was integrated into the Reconstruction Finance Corporation. Alongside the services provided by RFC it was also the home of the Commerce Department also had an Office of Small Business. The purpose for the Office of Small Business was principally educational, and based on the belief that the reason for the failure of many companies was due to insufficient access to information about operating the business and business. The Office concentrated its efforts on pamphlets and consulting for entrepreneurs who are not self-employed.

In the Korean War the Congress created another agency that was focused on small-scale businesses, called The Small Defense Plants Administration. It had a portfolio as the predecessor, the Smaller War Plants Corporation with the exception that small-business lending power remained with the Reconstruction Finance Corporation. Small Defense Plants Administration Small Defense Plants Administration performed initial screening and offered assistance to small-sized firms and issued certificates that they are able to receive government-issued contracts. They then entered the loan process with the Reconstruction Finance Corporation.

The Inception of SBA

To simplify government support for small-scale businesses, To streamline government support for small businesses, President Eisenhower proposed the establishment for the Small Business Administration and it was established by Congress in July 1953.” The charter also stated that SBA will guarantee small businesses an “fair percentage” to government grants as well as selling of surplus property.

The SBA focused on direct loans to small companies as well as guaranteeing bank loans and offering loans to victims of natural catastrophes. The Administration also offered assistance to small-sized businesses in obtaining government contracts, and also provided technical and management assistance.

The Investment Company Act of 1958 created the Small Business Investment Company (SBIC) Program. Under it, the SBA licensed the company, regulated it and also helped in providing funding to privately-owned and managed venture capital firms. They were specialized in providing long-term debt as well as equity investments to minor firms. The idea for the company was born as a result of an Federal Reserve study that discovered in the simplest way, that these companies are not able to access the capital they required to keep up with technological advances.

In 1964, the SBA broadened its offerings to be part of to the War on Poverty, with the Equal Opportunity Loan Program (EOL). This program offered people who were living in poverty with the opportunity to get credit with a lower collateral requirement and eligibility requirements. This allowed businesses with solid employment prospects to secure the capital they required to explore their goals.

SBA Today

The range and breadth of the programs offered through the SBA has never been larger than today. The SBA provides assistance and serves as an advocate of every U.S. businesses in every industry category, as well as all State as well as Territory. In terms of providing procurement assistance to federal contractors, management consultancy or outreach to minorities, women and veterans as well, the SBA is a reliable partner. SBA also offers the victims of natural disasters with loans and provides specialized advice and support with international trade.