What is the SBA?

Official Website: http://www.sba.gov/

Created by: Shannon Campbell

February 1, 2013

What is the SBA?:

The SBA, which stands for the U.S. Small Business Administration, was founded on July 30, 1953. The SBA is an independent agency of the U.S. federal government that helps both protect and defend the rights of small businesses, which consists of counseling and assisting. The SBA has also delivered a consistent amount of financial aid, which includes loans, loan guarantees, and contracts. According to their official website, the SBA’s overall goal is to ‘preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation’.

Early History:

The SBA, however, has roots that go far beyond the early 1950’s. The RFC, which stands for The Reconstruction Finance Corporation, was created by Herbert Hoover in 1932. Hoover was president of the United States during the early days of the Great Depression, and created the RFC to help ease the financial crisis for both small and large businesses going on at the time. When Franklin Delano Roosevelt won the presidency in 1933, he continued the program with the most elite of staff. This also continued into WWII, where many industries, especially those on the larger end, built up their businesses to help with the war-time efforts. Small businesses at the time simply could not compete, and The Smaller War Plants Corporation, or the SWPC, was implemented by Congress. The SWPC began giving more direct loans, as well as making credit more readily available to smaller businesses.

Although the SWPC faded out post-WWII, The Office of Small Business, or the OSB, took the responsibilities of the agency. The OSB added more of an education approach to the development and progress of small enterprises. During the Korean War, The Small Defense Plants Administration (SDPA) was created with the similar duties of the SWPC.

The RFC was eventually eliminated in 1952, and Dwight Eisenhower proposed the creation of the SBA.

1953 to Present:

When Congress passed Dwight Eisenhower’s proposal, they ensured that small businesses would be treated fairly along with larger industries in the United States.

In 1954, the SBA began distributing loans to small businesses who were victims of natural disasters, along with helping them with new technology and training.

In 1958, The Investment Company Act created The Small Business Investment Company or SBIC to help with licensing for private operated investment firms, as well as providing equity investments for small businesses that may be high-risk. This was done because the Federal Reserve saw that small businesses were unable to receive the proper credit in order to keep up with the fast technological times. A few years later, the Equal Opportunity Loan was also created.

As stated above, a variety of programs have been created by the SBA to help small businesses and their owners not only compete with larger industries, but to help stay afloat in an unpredictable economy. It has even added a special program to help small businesses with international trade. With the variety of assistance programs the SBA offers, it is a vital association that is well valued by the United States and its people.