The Small Business Administration (SBA), created in 1953, provides LOANS, loan guarantees, and business counseling and advice to owners and would-be owners of small businesses. In 2000, the SBA portfolio included over 200,000 loans worth more than $45 billion. The SBA is part of the U.S. Department of Commerce. The SBA expanded upon the roles of two previous government agencies, the Reconstruction Finance Corporation (RFC), and the Smaller War Plants Corporation (SWPC). The RTC, created in 1932, made loans to all businesses, small and large, hurt by the GREAT DEPRESSION. The SWPC, created in 1942, provided direct loans to small enterprises, supported lending by large financial institutions to small businesses, and advocated small-business efforts to gain part of federal procurement needs during World War II. Since its creation in 1953, the SBA’s role has been expanded numerous times. In 1958 it established the Small Business Investment Company (SBIC) to license, regulate and provide funding for VENTURE CAPITAL investment firms. In 1964 it created the Equal Opportunity Loan Program (EOL) to provide loans for low-income individuals unable to attract CAPITAL for the creation of new businesses. SBA programs support small businesses and lowincome entrepreneurs through financing, counseling, and technical assistance. Critics suggest many SBA programs discriminate against noneligible small businesses and unfairly subsidize businesses in the programs. The SBA manages a wide array of programs, including
• Basic 7(a) Loan Guarantee. SBA’s primary short- and long-term loan program for start-up and existing businesses cannot obtain financing through normal privatelending channels. Loan guarantees are used through participating, commercial lenders; maximum amount, $750,000
• CAPLInes. Short-term and cyclical working capital loan guarantees; maximum, $750,000
• Defense Loan & Technical Assistance (DELTA). Assistance for small businesses hurt by cuts in defense spending, using loan guarantees
• Community Adjustment and Investment (CAIP). Assistance to businesses affected by changes due to NAFTA (North American Free Trade Agreement)
• Export Working Capital (EWCP). Loan guarantees to finance export transactions
• International Trade Loan (ITL). Long-term loan guarantees for companies engaged in or preparing to engage in international trade
• Energy & Conservation Loan. Loan guarantees for eligible small businesses engaged in energy-conservation markets
• Pollution Control Loan. Loan guarantees for businesses planning or installing pollution-control facilities
• Second Market. Facilitates buying and selling of SBAguaranteed loans
• SBAExpress. Allows participating lenders to use their own documentation to approve, service, and liquidate loans up to $150,000 • CommunityExpress. Loan guarantees up to $250,000 for job creation in designated rural and inner-city areas
• Microloan (7m) Loan Program. Provides loans up to $25,000 to small businesses through approved nonprofit groups
• Small Business Investment Company (SBIC). Provides EQUITY capital, long-term loans, and other financing through licensed SBICs, privately owned, for PROFIT venture capital firms, about 350 in the United States
• Surety Bond Guarantee. Guarantees bid, performance, and payment BONDS for up to $1.25 million for eligible small businesses, which cannot obtain surety bonds through commercial channels
• Prime contracting. Establishes small business set-aside programs in federal projects
• Small Business Development Center (SBDC). Provides MANAGEMENT and technical assistance for small business owners through SBDCs
• Service Corps of Retired Executives (SCORE). Offers counseling and training for small-business owners through volunteer services of retired executives
• Disaster Assistance. Loans, at reduced rates, for homeowners and businesses affected by disasters
• Export Assistance Centers. Coordinates RESOURCES of various federal programs supporting EXPORTING activity
• Empowerment Zones/Enterprise Communities. Provides centralized access to community small-business programs
• Welfare to Work. Coordinates small businesses and former WELFARE recipients in job-search efforts.