All About the United States Small Business Administration
The United States Small Business Administration (SBA) makes the American dream of business ownership come alive for millions of citizens. The SBA makes advocates for the rights of small businesses, ensuring fair competition and the availability of resources for those desiring to succeed in the business world, with over $30 billion in loans made towards the growth and improvement of small businesses. Throughout its history, the SBA wore many hats before its final incarnation as the United States Small Business Administration.
The SBA found its start under the mandate of President Hoover in 1932. President Hoover created the Reconstruction Finance Corporation (RFC) to assist businesses devastated as a result of the Depression. The RFC made loans available to both large and small businesses. As it entered the World War II years and now under the tutelage of President Roosevelt, the RFC created a sublet called the Smaller War Plants Corporation (SWPC) in 1942 to motivate small businesses to participate in wartime defense production. The larger businesses were tasked with the responsibility of dispensing loans to their small businesses counterparts.
The SWPC found a new role after the post-war years as the Office of Small Business (OSB), run by the Department of Commerce. The OSB played an advisory and training function to small businesses. It was widely believed that the lack of training contributed to the failure of many small businesses. However, this was not true, as small businesses found themselves unable to compete with larger businesses, as was discovered when the Korean War once again sparked wartime production, which benefited larger companies. And once again, the government was forced to create an organization to enable small businesses to compete, this time in the form of the Small Defense Plants Administration (SDPA).
Finally, President Eisenhower saw the writing on the wall and formally introduced the Small Business Administration as a separate entity. Officially adopted by Congress in 1953, the purpose of the SBA had changed to “aid, counsel, assist, and protect insofar as is possible, the interests of small business concerns.”
Beginning in 1954, the SBA introduced direct loans to small businesses, and for the first time, made loans available to businesses affected by natural disasters. In 1958, another barrier was broken down for small businesses when the Small Business Investment Company (SBIC) made it easier for high risk businesses to secure loans through private investment groups. The Equal Opportunity Loan Program in 1964 made the American dream of business ownership a reality for those in poverty with sound business plans, but who otherwise were unable to secure governmental assistance.
Today, the United States Small Business Administration has extended its influence, providing contracting, procurement, natural disaster, training, and outreach to all those with wishes of becoming a business owner. The SBA remains an important tool in the repertoire of the small business owner, helping small businesses grow and succeed, and thereby serving as an important developer of economic activity in the United States.
