The Small Business Administration (SBA) is an independent government agency of the United States. The SBA was created by Congress on July 30, 1953 as per the proposal of President Dwight Eisenhower. The Reconstruction Finance Corporation (created in 1932), the Smaller War Plants Corporation (created in 1942), the Office of Small Business (OSB) and the Small Defense Plants Administration (SDPA) are treated as SBA’s predecessors. The root force behind the creation of Small Business Administration was the great economic depression and the economic decline caused as a result of World War II.
The Small Business Administration aims to:
- support, guide, assist and protect the interests of small business concerns;
- safeguard free competitive business venture; and
- preserve and reinforce the overall economy of the United States
The Small Business Administration has distributed a huge volume of direct business loans, loan undertakings to small businesses, loan arrangements to victims of natural disasters, government procurement contracts for small businesses, counseling conferences, management and technical assistance and business training to business entrepreneurs and other forms of support to small business organizations. The Small Business Administration provides its services to people around the country through a far-reaching network of field offices and tie-ups with public and private sector organizations.
In 1958, the Small Business Administration approved, regulated and facilitated the formation of Small Business Investment Company (SBIC) Program under the Investment Company Act. The SBIC provides funds for private business ventures as long-term debt and participates in equity investments for high-risk small businesses. In 1964, through the Equal Opportunity Loan (EOL) Program, the Small Business Administration provided relaxation on credit and collateral requirements for new business applicants living below the poverty level.