Small Business Administration Essay, Research Paper
In July of 1953 the United States Congress amended an act called the Small Business Act. Many believed that the essence of the American economic system of private enterprise is free competition. Also, that only through full and free competition can free markets, free entry into business, and opportunities for expression and growth of personal initiative and individual judgement can be assured. Thus, the Small Business Act was amended. In order to carry out the policies of this Act there was hereby created an agency under the name “Small Business Administration”. The United States Small Business Administration, more commonly known as the SBA, is a federal agency to protect and assist America’s greatest resource, the small business. Since American enterprise is the backbone of our economy and the driving force behind economic growth and prosperity. The SBA’s mission is to create economic development through small businesses. More easily to understand, the SBA helps businesses get started and helps established businesses grow. The SBA has many functions, below six of the functions are explained. When natural disasters cause damage and help is needed. The Disaster Loan Assistance function comes into play. SBA disaster loans are the primary form of federal assistance for non-farm, private sector disaster losses. When victims of natural disasters need to borrow money for repair, the SBA loans provide low interest rates and long terms available for affordable recovery. Since the SBA started, more than 1.14 million loans have been approved for a total of $16.4 billion. Another function of the SBA is Investment Capital. This provides small businesses to have money or capital for growth and finance. The Small Business Investment Capital or SBIC provides the capital. Developed in 1958, the SBIC wanted to fill the gap between venture capitol and the needs of small businesses. There are two types of SBICs, the regular SBIC and the specialized SBIC. The next function, International Trade encourages small businesses to sell U.S products and services overseas. It also provides marketing and trade information to exporters through the ATLAS or Automated Trade Locator Assistance System. International Trade offers information, advice and export financing assistance to current and potential exporters.
The Procurement Assistance function tries to make sure that small businesses get their fair pay, goods and services from the federal government. Procurement Assistance programs include Prime Contracts Assistance, Natural Resources Assistance, Subcontracting Assistance, COC and PASS programs. The SBA also tries to establish goals for contracting with small disadvantaged businesses. The next function, Financial Assistance offers a variety of financing options to eligible small business concerns that cannot borrow on reasonable terms from conventional lenders without government help. Financial Assistance is made up of three different loan categories: + 7(a) General Business Loan, which is most widely used. It provides funds for almost any legitimate business purpose.+ Certified Development Company Loans (504 Program) provide long term, fixed rate financing at reasonable rates for businesses to grow.+ Other Special Loan Programs include: Microloans; Lines of Credit; Contract Loans; Physical Disaster Loans; Direst loans to veterans, Vietnam, disabled and handicapped individuals, etc.The sixth function of the SBA is Business Development, based on management assistance through information, counseling, training and conferences, utilizing the following programs:+ Services Corps of Retired Executives (SCORE)+ Small Business Institutes (SBI)+ Small Business Development Centers (SBDC)+ Business Information Centers (BIC)The SBA has more than a hundred offices across the nation and a permanent staff of nearly four thousand employees. The SBA has an office in nearly every state, for easier access for future small business owners. On top of it, the SBA increases its ability to help many small businesses through public or private initiatives. Ninety nine percent of all U.S. businesses are considered small, and approximate amount of 20 million small businesses make up 39 percent of the GNP, provide around 50 percent of America’s workforce, and generate 53.5 percent of all sales. Most small, independent businesses or individuals starting a business are eligible for Small Business Administration assistance. Since the SBA is committed to economic development through small businesses, it works to help businesses get started, grow and remain profitable