When you think of the Small Business Administration (the SBA), you probably think of business loans. But there are also other things the SBA can do to help your business before and after you start—from day-to-day management and expanding your business to making changes.
Most SBA activities are available to all businesses, but loans and some programs are available only to small businesses. The SBA considers industry size standards and other criteria in its definition of a small business. Here are 7 practical ways the SBA can help you:
Help With Business Loans
Before talking about SBA loan programs, I want to debunk a myth about how the SBA works. The SBA doesn't lend money, and you don't need to be turned down by two banks to get SBA help with a business loan.The SBA provides loan guarantees to lenders, to help you to qualify for a business loan. In that way, it acts like a co-signer.
You can go to any lender and ask if they work with the SBA. Or you can get SBA help connecting with lenders. (see below.) Yes, there is more paperwork and time involved with getting a loan with an SBA loan guarantee, but having SBA help can make the difference in many cases between getting that loan or not. You can connect with SBA lenders through the SBA's Linc program. You will need to register and answer a few questions before lenders contact you. it's a great idea to speed up the lending process!
SBA Loan Programs
The SBA is continually updating and changing its loan programs. Here are a few general-purpose and special-purpose/special business SBA-supported loan programs you might find helpful:
- The Basic 7(a) loan program is set up for help with loans for both existing businesses and start-ups. 7(a) loans are flexible and can be used for a variety of business purposes, including working capital.
- The 504 "Go" Loan for property and equipment in development areas. To qualify, your business must be in a specific area targeted for development.
- The SBA also has special loans for individuals who meet certain requirements, like Patriot Express loans for veterans, microloans for smaller amounts to help startups, export loans, and Capline loans for working capital purposes.
You can find more details about these loans from Rosemary Peavler's article about SBA Loan Programs.
One of the most important functions of the SBA is to help small businesses that were hit by disasters. Both physical damage and economic injury assistance may be available.
Local SBA offices will often set up special service areas to help expedite the loan process. These loans, like other SBA loans, are guarantees to lenders, not direct loans to businesses.
Other SBA disaster assistance includes loans to self-employed business owners who have lost their jobs due to a disaster and tax relief assistance to help business owners prepare tax returns for the year of a disaster. You can find more details on the SBA's Disaster Assistance page. And you might want to check out their disaster preparedness tips too.
Grants for Research and Development
A little-known SBA program is called the SBIR /STTR grant. SBIR stands for "Small Business Innovation Research," and STTR stands for "Small Business Technology Transfer." The SBA coordinates these programs.
The SBIR program is a competitive program that is used to encourage businesses to do research that has the "potential for commercialization." The program also focuses these research grants on businesses run by "socially and economically disadvantaged persons." SBA coordinates the program, which ties businesses in with 12 government agencies that have SBIR funds available.
The STTR program connects businesses with research institutions in public/private sector partnerships for joint venture opportunities. The STTR's are intended to "bridge the gap between performance of basic science and commercialization of resulting innovations." Five government agencies are involved. Find out how to qualify and apply for either of these programs at the SBIR/STTR website.
Help to Become a Government Contractor
Small businesses often assume that they can't compete for government contracts because they are so small, but the SBA aims to level the playing field. Many government agencies require that some percentage of their purchases be set aside for small businesses, so you may be able to get in on these contracts.
If you are interested in becoming a government contractor, check out the SBA's online course, "Government Contracting 101." For a detailed explanation of the process, read this article listing the steps for how to get federal contracts for writers. (It works the same for all types of businesses.) Businesses that want to export products can also find help from the Small Business Administration through its exporting division.
Help for Specific Types of Small Business Owners
I've already mentioned Patriot Express loans for veterans, but the SBA also emphasizes other groups.
- an Office of Women-owned Businesses to provide specific help to women starting and running small businesses
- a special loan for minority-owned businesses
- services for disabled and disadvantaged business owners
- immigrant (foreign national) business owners
Face-to-Face Help, Training, and Information
You can find individual help with business startup, business plan writing, marketing, and other business questions through SCORE (formerly the Service Corps of Retired Executives), an SBA partner group. There are SCORE chapters throughout the U.S., and probably one near you. Here are some other resources for local and online information and training:
- The SBA Learning Center, with online courses on a variety of subjects.
- Small Business Development Centers, with over 900 locations, are affiliated with local colleges and universities. They offer training seminars and one-on-one consulting sessions.
- The "Tools" site has many other resources you can use to learn just about anything related to small business.
That's a lot! And I didn't even cover half of what the SBA does to help small businesses. So next time you hear about the SBA, remember they are not just for loans. Start with your local SBA office and see what services and training opportunities are available in your area.