Small Business Administration (SBA)

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Small Business Administration (SBA): What It Is and How It Helps Small Businesses

What is the SBA?

The Small Business Administration (SBA) is a U.S. government agency that supports the growth and competitiveness of small businesses. Its core mission is to expand access to capital, provide education and counseling, increase federal contracting opportunities, and advocate for small-business interests at federal and state levels. The SBA operates local offices across all 50 states, the District of Columbia, and U.S. territories.

Key services

  • Access to capital: Guarantees and supports a range of loan programs delivered by banks, credit unions, and other lenders; the agency directly issues disaster loans.
  • Entrepreneurial development: Counseling, low-cost training, and mentoring through a national network of local offices and resource partners.
  • Government contracting: Promotes small-business participation in federal procurement and reserves a portion of contracts for small, women-, veteran-, and socially disadvantaged-owned firms.
  • Advocacy: Reviews legislation, represents small-business interests, and provides data and policy analysis.

Major loan programs

The SBA does not typically make standard business loans itself; instead it guarantees loans made by approved lenders, which reduces lender risk and makes financing easier to obtain. Principal programs include:

  • 7(a) Loan Program: SBA’s primary loan program; guarantees loans up to $5 million for working capital, equipment, inventory, and many other uses.
  • CDC/504 Loan: Long-term, fixed-rate financing (up to several million dollars) for major fixed assets such as real estate or large equipment.
  • Microloans: Small, short-term loans (typically up to $50,000; average much smaller) targeted to startups and very small businesses.
  • Disaster Loans: Direct loans from the SBA to businesses and homeowners to repair and recover after declared disasters.

How the SBA helps start a business

  • Business planning: Tools and guidance for market research, developing a business plan, choosing a business structure, naming, and location decisions.
  • Legal and regulatory steps: Information on registration, tax IDs, permits, licenses, and opening business bank accounts.
  • Launch support: Guidance on zoning, insurance, local regulations, and initial financing strategies.

How the SBA helps manage and grow a business

  • Management resources: Advice on finance, hiring, taxes, compliance, purchasing assets, marketing, and sales.
  • Risk and cybersecurity: Best practices, training, and resources to address common cyber threats and scams.
  • Expansion support: Guidance on accessing additional capital, mergers and acquisitions, exporting, and scaling operations.
  • Contracting and procurement: Assistance registering as a federal contractor and navigating government contracting opportunities.
  • Inclusive programs: Targeted resources for women-, veteran-, minority-, Native American-, LGBTQ+-owned, and rural businesses.

Funding and grants

  • Funding source: The SBA is funded by an annual federal budget covering staffing, grants, and program administration.
  • Loan model: Most SBA-backed loans are issued by third-party lenders and guaranteed by the SBA; the agency directly issues disaster loans.
  • Grants: The SBA generally does not give grants to for-profit businesses. Grants are available to nonprofit organizations, resource partners, and educational groups that deliver training, counseling, or technical assistance to entrepreneurs.

Brief history and recent role

  • Established in 1953 to replace earlier New Deal–era agencies, the SBA’s mandate has been to aid small businesses and help them access government contracts and resources.
  • The agency has weathered political and budgetary challenges but remains the primary federal support system for small-business development.
  • During crises—most notably the COVID-19 pandemic—the SBA administered emergency lending and grant programs (e.g., Economic Injury Disaster Loans and related advance grants) to help small businesses survive and recover.

Accessing SBA help

  • Local offices and resource partners (SCORE, Small Business Development Centers, Women’s Business Centers) provide in-person and virtual counseling, workshops, and mentorship.
  • The SBA website hosts planning tools, loan guides, application instructions, and directories to local support.

Bottom line

The SBA is the federal government’s central resource for small-business assistance. It expands access to capital through loan guarantees, provides a wide range of educational and counseling services, helps small businesses compete for federal contracts, and advocates for small-business policy. Whether you’re starting, managing, or growing a business, the SBA’s programs and local resources can connect you to financing, training, and expert guidance.