Get Guaranteed Small Business Loans and Find funding through Small Business Administration USA
What is Small Business Administration USA and how it helps Small Businesses
The main role of Small Business Administration USA is to help American people start, build and grow businesses through an established network of field offices and partnerships with public and private organizations whether its helping any entrepreneur in securing a business loan or with market research for setting up a new business.
SBA or the United States Small Business Administration is an independent agency of the federal government that was setup way back in 1953 to assist and protect the interest of the small businesses, to preserve free competitive enterprise and to strengthen the overall economy of the nation. SBA works closely with the entrepreneurs and small businesses as they are critical to the nation’s economic recovery, in building the nation’s future and helping the USA compete in today’s global marketplace.
General Information About Small Business Administration USA:
- Office Locations – At least one office in each US state
- Small Business Development Centers – Approx. 900 locations
- Women Business Centers – 110 across US
- Serves over 1 million Entrepreneurs and small business annually with free counselling and training programs
SBA introductory video (courtesy SAB.GOV)
SBA was created under the Small Business act of 1953 enacted by the congress on july 30. In the year 1958, congress enacted the Small Business Investment Act to facilitate investment opportunities, lending and loan options for the small businesses.
The Small Business Resource magazine is the most comprehensive guide published quarterly by the Small Business Administration USA in which you can find all the information related to counseling, training, capital, contracting, disaster assistance, business advocacy, local directories and more.
Small Business Administration USA provides various services to the small businesses and entrepreneurs:
Before we dig any further it is important to note here that Small Business Administration is open to all businesses but its business loan services are only available for the Small Businesses.
Now let’s try to figure out what all services SBA provides to the Small Business owners.
SBA Guarantees Loans to the Small Business Owners and Individuals looking for funding to startup
Business Loan Assistance – SBA works with government and private banks to facilitate loans for the small businesses. It is important to understand that SBA itself doesn’t lend any money rather it works with banks and financial companies to help small business owners get business loans.
You can go to any lender or bank and ask them if they work with SBA. You can also take assistance from the SBA to connect with the lenders on their list. SBA acts as a co-signer for you and provides loan guarantees to the banks and lenders so that you qualify for a business loan. However, the processing time for the business loans when applying through an SBA is a bit more but it makes a lot of difference to your case since SBA acts as your loan guarantor.
You can find compare rates, terms and fee of various lenders through the lender match service offered by the SBA. You have to simply fill up the form and answer few questions to get started with your lending process.
SBA Loan Program – SBA offers various loan programs to the small business owners in various categories such as 7(a) loan which is the primary of all loan programs for providing financial assistance to the Small Business Owners. Under the 7(a) loan program there are various categories to apply for the loan depending on your nature of business, working capital needs and your situation.
Few of these categories under which you can apply for a loan are:
SBA Express, Export Express, Export Working Capital, Veterans Advantage etc. Each category has its own interest rates, terms and fee associated with it so you have to check with SBA which suits your needs and situation best.
SAB also have special loan program such as the Community Advantage Loans to serve small businesses in underserved markets. The Community Advantage Loan also falls under the 7(a) loan category.
Other categories include 504 “Go” loans which are available to the businesses that are in a specific targeted area for development. The 504 “Go” loans are for the property and equipment in certain specific development areas.
Microloan Program – SBA’s microloan program is to help small businesses and certain no-for-profit organizations such as child care centers grow. As the name suggests microloans are smaller amounts compared to the conventional loan amounts with a maximum limit of US $50000. Maximum allowed repayment term is 6 years and the rate of interest can be between 8% to 13%. However, the rate of interest depends on many factors such as the loan amount, use of funds and your needs a small business.
SBA Disaster Assistance Program – Apart from loan programs SBA also provides loans to the small businesses and homeowners in the disaster hit areas.
These loans are provided at a very low-interest rates to the homeowners, renters and small businesses that are in the region of declared disasters. Loan assistance is available for both physical damage as well as the economic injury. Physical damage loans are provided for home repairs and replacement of physical assets damaged in a disaster while the economic injury loans are provided to cover operating expenses of small businesses after a disaster.
Grants for Small Businesses and Non Profits involved in Research & Development – SBA helps nonprofit organizations and small businesses in getting grants from the state and local governments as well as venture capital funds that are involved in scientific research and development work that has the potential of commercialization.
SBIR or Small Business Innovation Research program is one such program and it focuses these grants towards the small businesses run by the individuals that are socially and economically weaker. SBA has tie ups with 5 agencies that provide such grants. SBA plays the role of a coordinating agency for the SBIR program.
STTR or Small Business Technology Transfer program focuses on bringing small businesses and research institutions together for a private/public partnership opportunities to facilitate the transfer of technology developed by a research institution through the entrepreneurship of a small business concern.
Government Contracting – As a small business owner you may assume that you are not eligible to bid for government projects and contracts while the fact is that the Small Business Administration ensures that small businesses don’t lose out to the large businesses when it comes to becoming a government contractor. Small Business Administration works with federal agencies to award at least 23 percent of all prime contracts to the small businesses. This helps federal agencies in meeting statutory goals by helping women owned small businesses, small disadvantaged businesses and small businesses that are located in the underutilized zones.
Market Research and Competitive Analysis – Market Research and Competitive analysis services by the Small Business Administration USA helps small business owners to understand various factors such as market size, competition, economic trends, location, pricing etc. to start and succeed in their ventures. The aim of market research and competitive analysis is to help you find customers for your small business.
Before you start a business it is important that you identify your market and the economic trends in that area to strategically price your products or services to attract customers. Small Business Administration helps you in reducing risks before you start a business by providing you with the insightful demographics data that includes population, age, interests, economic trends etc. of a particular area.
The market research and competitive analysis also help small business owners to find answers to some of the challenging questions such as:
- Demand: Do people really need your products or services that you want to offer?
- Market Size: How many people really need your products or services?
- Economic Trends: What’s the average income of people and spending ability
- Location: Where your customers live and how your business can reach them?
- Competition: Are there other similar services or businesses selling similar products?
- Pricing: How to strategically price your products and services identifying the alternatives that customers pay for.
The Small Business Administration USA offers many resources and tools for marketing research and competitive analysis such as:
The Sizeup tool that helps small business owners in identifying how their small business matches up with the competitors in the city and by industry.
In addition to helping small businesses in acquiring government contracts, the SBA’s 8(a) Business development program assists economically disadvantaged individuals in developing their businesses through counseling programs, training sessions and matchmaking programs with federal buyers. It’s a unique program in itself that aims to empower socially and economically disadvantaged individuals with aspiring entrepreneurship dreams.
The Small Business Administration also provides free resources that help individuals and small business owners in starting a new business, market research, training programs and counseling both online and offline. SBA has over 900 local offices across the United States that provide every kind of information that you need related to a small business. From Starting up to acquiring a small business loan to government contract to online training videos, you don’t need to look any further beyond SBA when it comes to setting up your small business successfully.
The information that we have covered here is not even 30% of what all services and programs Small Business Administration USA offers to the Small Businesses. You can visit the official SBA website or visit a local SBA office near you and find out more about their training programs, business loans and services available in your area.
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