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Advantages of the Small Business Administration (SBA)

The Small Business Administration or SBA is there offering their services to potential small business enterprises in terms of providing for the loans that they need to help their business going through its beginning stages. What is SBA? Small Business Administration is an organization established in the year 1953, responsible for providing assistance to small businesses in America in the areas of management, advocacy, procurement, and financial aid. This agency works without any interference from the federal government. Other services offered by the Small Business Administration are as follows: business loans programs, investment programs, disaster loan programs, and bonding for contractors.

The SBA program that has benefited a lot of small businesses is the business loan program. Here is a great solution for the problem of small companies looking for sources of funding for their business, the different programs offered by the SBA to suit the needs of every small business.

SBA does not offer direct loans. What they do is simply provide guidelines for the loans that you will apply for. The main thing that the SBA does is to vouch for your business that your loan will be repaid as you apply for a business loan from any financial institution offering them. So in essence, the loan that you apply for from the SBA is really a regular commercial loan but is custom made to fit the requirements of the SBA with its seal of approval. However, you will not be able to get the loan if you have other sources of financing on reasonable conditions and terms. The policies of the SBA can change if there are changes in the fiscal policies of the government.

With a partially public and a partially private investment partnership, SBA can offer venture funding to small businesses. The SBA manages, licenses, and regulates the venture funds which are privately owned. Unlike other venture capital firms, SBA limits their funding to legitimate small businesses subject to reasonable terms and conditions.

SBA also has a bonding program to help small venture contractors acquire surety bonds, which is a bond signed between three parties – the contractor, a surety or a guarantor, and the project owner. If the contractor fails to complete the project, the surety take the responsibility.

Here we can see the advantages of having the SBA. Many small business success can be attributed to the help provided by SBA financing and programs. So if you are a small business owner, a starting business man or a venture contractor, consider the SBA programs and services for your business financial needs.

Source: American Small Business League