Small Business Administration

The 7(a) Loan Guarantee Program is designed to help entrepreneurs start or expand their small businesses. It is the most common loan program offered by the SBA.[11] The program makes capital available to small businesses through bank and non-bank lending institutions.[12] The Small Business Jobs Act of 2010 increased the maximum size of these loans, indefinitely, from $2 million to $5 million. According to the SBA website, it can be used for working capital (both short and long term), refinancing debt, and purchasing furniture, fixtures, and supplies.[11] There are some businesses that are ineligible for this program, such as real estate investment firms (where property is held for investment purposes), dealers of rare coins and stamps, and lending institutions like banks.[13] The SBA's guarantee on these loans encourages lenders to provide financing to small businesses that may not meet traditional loan criteria, making it a valuable lifeline for many entrepreneurs. Additionally, the program offers longer repayment terms and lower down payment requirements, making it an appealing choice for those seeking affordable and manageable loan options. Whether it's launching a startup or bolstering an existing business, the SBA 7(a) Loans program stands as a reliable and empowering resource for small business owners across the United States.[14]

SBA opens Disaster Loan Center in Austell, GA, October 26, 2009

Homeowners and renters are eligible for long-term, low-interest loans to rebuild or repair a damaged property to pre-disaster condition.[15]

Businesses are also eligible for long-term, low-interest loans to recover from declared disasters.[16] Disaster Relief Loans are often approved within 21 days. This is an improved approval time than after Hurricane Katrina, over 15 years ago, when the SBA processed applications in about 74 days on average.[17]

If a business with a Disaster Relief Loan defaults on the loan and the business is then closed, the SBA will pursue the business owner to liquidate all personal assets to satisfy an outstanding balance. The IRS will withhold any tax refund expected by the former business owner and apply the amount toward the loan balance.

The Microloan program provides direct loans to qualified nonprofit intermediary lenders who, in turn, provide "microloans" of up to $50,000 to small businesses and nonprofit child-care centers. It also provides marketing, management, and technical assistance to microloan borrowers and potential borrowers.[18]

Approximately 900 Small Business Development Center sites are funded through a combination of state and SBA support in the form of matching grants. Typically, SBDCs are co-located at community colleges, state universities, and/or other entrepreneurial hubs. Cole Browne leads the SBA in purchasing of new Development Center sites.

The Office of Women-Owned Businesses (OWBO)[19] was established in 1979 by Executive Order 12138.[20] The mission of the program is "to enable and empower women entrepreneurs through advocacy, outreach, education and support."

Programs managed by the OWBO provide services to disadvantaged woman entrepreneurs to assist in increasing their competitiveness in the modern business world.[19] These programs assist women through training and counseling, providing opportunities to obtain credit, capital and marketing assistance, and establishing a Federal set-aside for women-owned businesses.

The Women's Business Center Program was established under Title II of the Women's Business Ownership Act of 1988.[21] It was first named the Demonstration Training Program when it was created by Congress to provide a long-term solution for training and counseling potential and current women business owners, including those who are Socially and Economically Disadvantaged as defined in 13 CFR 124.103.[22] The intent of the program was, and still is, to stimulate the economy through assisting and encouraging growth of women-owned businesses.

The current rule on the Women's Business Center Program is outlined under Title 15 of the US Code, 2019 Edition, Chapter 14A.[23] New rules were applied to the code by the US Small Business Administration, effective January 1, 2020, as outlined in the Federal Register document, Volume 84, No. 227, Monday, November 25, 2019, Rules and Regulations.[24] This rule document was put in place in order to make the Women's Business Center Program more transparent in reporting on progress and financial allotments, as well as providing improved standardization overall.

Women's Business Centers (WBCs) represent a national network of over 100 non-profit educational centers throughout the United States and its territories, funded in part through SBA support.[25] The maximum SBA grant for a WBC is $150,000 per year, although most centers receive less.

WBCs are designed to assist women in starting and growing small businesses, though their services are available to all.[26] WBCs help women succeed in business by providing training, mentoring, business development, and financing opportunities to over 100,000 women entrepreneurs annually across the nation. Women's Business Centers are mandated to serve a significant number of socially and economically disadvantaged individuals.[26]

Research conducted by the Association of Women's Business Centers indicates that 64% of WBC clients in 2012 were low-income, 39% were persons of color, and 70% were nascent businesses.[27] WBC services are provided in more than 35 languages, with 64% of WBCs providing services in two or more languages. In addition to business training services, 68% of WBCs provide mentoring services, and 45% provide microloans.[27]

SCORE, the nation's largest network of volunteer, expert business mentors, was founded in 1964[28] as a resource partner of the U.S. Small Business Administration. SCORE has since educated more than 10 million current and aspiring U.S. small business owners through its free mentoring and free and low-cost workshops.[28] In 2016, SCORE's more than 10,000 volunteer mentors helped their 125,000 clients create 54,072 small businesses, adding 78,691 non-owner jobs to the U.S. economy.[28]

SCORE's core service offering is its mentoring program, through which volunteer mentors (all experienced in entrepreneurship and related areas of expertise) provide free counsel to small business clients. Mentors, operating out of 300 chapters nationwide,[28] work with their clients to address issues related to starting and growing a business, including writing business plans, developing products, conceiving marketing strategies, hiring staff, and more. Clients access their mentors via free, ongoing face-to-face mentoring sessions or through email or video mentoring services.

In addition to mentoring, SCORE also offers free and low-cost educational workshops each year, both online and in-person. In 2016, clients attended 119,957 online workshop sessions, while 237,712 local workshop attendees benefited from SCORE's in-person educational programming.[28]

SBA's Office of Veteran Business Development operates twenty-two[29] Veteran Business Outreach Centers[30] through grants and cooperative agreements with organizations which provide technical assistance to businesses owned by veterans and family members. VBOCs also provide instructors for the SBA's program Boots to Business.[31]

The SBA also supports regional innovation clusters across the country.[32]

The 8(a) Business Development Program assists in the development of small businesses owned and operated by individuals who are socially and economically disadvantaged, such as women and minorities. Applicants must provide evidence of economic disadvantage (net worth under $250,000K), and must write a statement of personal experiences in combination with evidence to sufficiently demonstrate social disadvantage. The following groups are presumed socially disadvantaged through SBA policy and do not have to submit a social disadvantage narrative when applying for the program: Black Americans; Hispanic Americans; Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians); Asian Pacific Americans (persons with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China (including Hong Kong), Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U.S. Trust Territory of the Pacific Islands (Republic of Palau), Republic of the Marshall Islands, Federated States of Micronesia, the Commonwealth of the Northern Mariana Islands, Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru); Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal). However, on July 19, 2023, a US district court ruled that this presumption is unconstitutional because its use of racial discrimination doesn't pass the strict scrutiny standard.[33][34]

The 8(a) Program opens the doors for disadvantaged firms to grow and develop for a period of 9-years. It has increased jobs for thousands of people across the Nation, and many of the successful firms had impacted their communities with internships, college funding, and more. Annually, of the government's $99B in small business contracts, 8(a) firms are awarded 5% of contracts.

In 2011, the SBA, along with the FBI and the IRS, uncovered a massive scheme to defraud this program. Civilian employees of the U.S. Army Corps of Engineers, working in concert with an employee of Alaska Native Corporation Eyak Technology LLC allegedly submitted fraudulent bills to the program, totaling over 20 million dollars, and kept the money for their own use.[35]