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Small Business Administration

about 75 percent of new jobs, and provided arenas for resentative network in every district office, an Online
technological innovation. During the early 1950s, the Women’s Business Center accessible through the Inter-
value of small businesses in providing stability for the U.S. net, and nearly seventy women’s business centers in forty
economy was realized. states; and the Minority Prequalification Loan Program
Prior to that time, big business and industry promises assists qualified minority-owned, for-profit companies
of career success too often proved to be empty, and many to obtain preapproval for a 7(a) loan guaranty. The 7(a)
disillusioned U.S. workers began to embrace the concept Loan Guaranty Program assists small businesses unable
of self-employment. As the number of business entrepre- to secure reasonable funding terms through normal
neurs increased, it quickly became apparent that such lending channels to obtain funding (i.e., microloans)
entrepreneurial endeavors needed a protective umbrella if through private-sector lenders on loans guaranteed by
they were to survive normal start-up difficulties common the SBA.
to small business, not to mention competitive pressures The SBA does not provide grants to start or expand a
generated by larger organizations. business, but it does coordinate and disseminate informa-
To address the problem, in 1953 the U.S. Congress tion about resources to facilitate awareness of business ini-
approved the Small Business Administration Act, which tiatives, on consulting or mentoring opportunities for
created the Small Business Administration (SBA). As an managerial novices, and regarding entrepreneurial success
independent federal agency, the SBA’s mission is to pro- strategies. Further, it provides disaster assistance and has
vide postdisaster recovery assistance to communities and established a unit to coordinate and facilitate technology
to maintain and enhance the national economy by aiding, transfer conferences for small businesses. In an effort to
counseling, assisting, and protecting small-business inter-
centralize access to a full range of technical and financial
ests based on two principles: quality-focused management
assistance for small-business owners located in empower-
and customer-driven outreach.
ment zones and enterprise communities, the SBA devel-
Throughout its ten regions, the SBA has seventy dis- oped One-Stop Capital Shops. These partnerships
trict offices across the country and program offices in
between the SBA and a local community offer compre-
every state, as well as the District of Columbia, the Virgin hensive small-business assistance from a unique, easy-to-
Islands, Guam, and Puerto Rico. The SBA is considered access retail site located in a distressed area, and they
the government’s most cost-effective economic-develop-
generally target underserved communities or the SBA’s
ment engine, with a 2005 loan portfolio of approximately
new markets.
$45 billion, expected to be dispersed to about 219,000
More information is available from the U.S. Small
entrepreneurs to foster small-business development and
Business Administration Office of Marketing and Cus-
growth. Further, from fiscal year 1999 to fiscal year 2000,
the SBA assisted in obtaining loans of approximately tomer Service, 409 Third Street SW, Suite 600, Washing-
ton, DC 20414; 202-205-6744 or 1-800-8ASK-SBA; or,
$94.6 billion that went to about 435,000 small busi-
nesses, and in 2004 lent about $2.5 billion to almost http://www.sba.gov.
18,000 women-owned businesses. SEE ALSO Entrepreneurship
The SBA also assists small businesses recover from
catastrophic disasters, such as wildfires, hurricanes, and
BIBLIOGRAPHY
terrorist attacks. While the fiscal year 2005 budget Office of Management and Budget. (2005). Small Business
requested $792 million for such disaster recovery funding, Administration. Retrieved January 31, 2006, from
since 2001 disaster relief assistance exceeding $3.3 billion http://www.whitehouse.gov/omb/budget/fy2005/sba.html
has been provided. Re: Invention. (2004, October.) Re: Ladies—Go long for a loan.
The SBA provides financial assistance in the form of Retrieved January 31, 2006, from
loan guarantees, rather than direct loans, through special- http://reinventioninc.blogspot.com/archives/2004_10_01_rei
ized programs that help entrepreneurs attain the appropri- nventioninc_archive.html
ate financial position to initiate their business and Service Corps of Retired Executives. (2005). Ask SCORE for
overcome the first few lean years of infancy. It also pro- business advice. Retrieved January 31, 2006, from
http://www.score.org
vides counseling and training assistance to female, minor-
ity, veteran, and socially and/or economically Small Business Administration. http://www.sba.gov
disadvantaged business owners.
The Office of Women’s Business Ownership, for Mary Jean Lush
instance, has established a women’s business owner rep- Val Hinton

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 671