DEFINITION of 'Small Business Administration - SBA'

The Small Business Administration (SBA) is a U.S. government agency, formulated in 1953, that operates autonomously. This agency was established to bolster and promote the economy in general by providing assistance to small businesses. One of the largest functions of the SBA is the provision of counseling to aid individuals trying to start and grow businesses. On the agency’s website, (SBA.gov), there is a wealth of tools to assist small businesses including a small business planner and additional training programs. Localized SBA offices throughout the United States and associated territories offer in-person, one-on-one counseling services that include business plan writing instruction and assistance with small business loans.

BREAKING DOWN 'Small Business Administration - SBA'

The SBA offers substantial educational information with a specific focus on assisting small business startup and growth. In addition to educational events offered on the SBA’s website, local offices also provide more personalized special events for small business owners.

The History of the SBA

The SBA was established by President Eisenhower through the signing of the Small Business Act in the summer of 1953. In its more than six decades of existence, the SBA has been threatened on numerous occasions. The House of Representatives, controlled by the Republican party in 1996, had the SBA slated to be eliminated. However, the agency survived this threat and went on to receive a record budget in 2000. The SBA faced further threat by President Bush and his administration. Though attempts to cut the agency’s loan program saw significant resistance in Congress, the SBA’s budget was cut repeatedly each year, from 2001 to 2004, when certain SBA expenditures were frozen altogether.

The SBA Loan Program

The loan programs offered by the SBA are among the most visible elements the agency provides. The organization does not offer grants or direct loans, with the exception of disaster relief loans, but instead guarantees against default pieces of business loans extended by banks and other official lenders that meet the agency’s guidelines. The number one function of these loan programs is to make loans with longer repayment periods available to small businesses.

The Future of the SBA

As of 2016, despite numerous attempts to do away with the SBA entirely, many political officials and offices continue to support the agency. President Barack Obama and his administration have continually supported the SBA and remain backers of a substantial budget allotment for the agency. The SBA’s ability to offer loans has also been significantly strengthened by the American Recovery and Reinvestment Act of 2009 and the Small Business Jobs Act of 2010.

RELATED TERMS
  1. Small Business Development Center ...

    A partnership between the U.S. Small Business Administration ...
  2. Small Business Investment Company ...

    A privately-owned investment company that is licensed by the ...
  3. 8(a) Firm

    A special status given to a firm that is owned and operated by ...
  4. Lender

    Someone who makes funds available to another with the expectation ...
  5. Service Corps Of Retired Executives ...

    A specific non-profit organization with members who provide free ...
  6. Tenured Capital

    Loans offered by the government to key business sectors.
Related Articles
  1. Managing Wealth

    How ‘Small’ Is a Small Business: The Statistics

    Doing the math will help you determine if you qualify as a small business and when your business gets too big to be small. Turn to the SBA for help.
  2. Investing

    KeyCorp Boosting Small Business Loans (KEY)

    KeyCorp will increase its small business lending program by 44% from a year ago, crushing loan volume records for the bank.
  3. Personal Finance

    Getting Government Loans For Your Small Business

    Would a government loan provide a more cost-effective way to finance your business? See whether your company qualifies for a government loan.
  4. Small Business

    The Small Business Jobs Act: Make It Work For You

    Understanding how to manage business credit is the key to obtaining small business loans.
  5. Managing Wealth

    5 Barriers Small Businesses Must Overcome

    Small businesses can be nimble and innovative, but larger ones have name recognition, can raise capital and have other advantages that are hard to beat.
  6. Investing

    The 4 Best Websites For Small Business Loans (EBAY, PYPL)

    Discover some of the best websites that small business owners utilize to obtain necessary financing at competitive interest rates.
  7. Small Business

    Types of Business Guidance Funded by Government

    To access the right type of advice and support for your business from a variety of government-funded services, know what's out there and what you need.
  8. Small Business

    Top 6 Reasons New Businesses Fail

    Running your own business may be the American Dream, but it's become a nightmare for many entrepreneurs. Learn how to avoid the most common factors leading to bankrupt businesses.
  9. Small Business

    6 Ways To Fund Your Startup's First Year

    Pursue your entrepreneurial goals by picking the startup plan that's best for you.
  10. Managing Wealth

    5 Reasons to Quit Corporate & Run a Small Business

    You're in a corporate job but itching to flex your entrepreneurial muscles. Here's why taking over a small business can make more sense than starting one.
RELATED FAQS
  1. What are some of the major regulatory agencies responsible for overseeing financial ...

    Discover the specific responsibilities of some of the major regulatory agencies that oversee financial institutions in the ... Read Answer >>
  2. What’s the difference between the two federal student loan programs (FFEL and Direct)?

    Learn about the differences between the two types of government-backed student loan programs: Federal Family Education Loans ... Read Answer >>
Hot Definitions
  1. Life Insurance

    A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the ...
  2. Price Elasticity Of Demand

    A measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. Price ...
  3. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  4. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
Trading Center