During the Korean War the Congress created yet another agency focusing on small business, the Small Defense Plants Administration. It carried a portfolio similar to its predecessor Smaller War Plants Corporation with the exception that small business lending authority remained with the Reconstruction Finance Corporation. The Small Defense Plants Administration performed initial screening and provided counseling services to small businesses and provided certification that they were competent to receive government contracts. The businesses then entered the loan process of the Reconstruction Finance Corporation.
If you're looking for a way to help your business grow, now would be a good time to understand how the government can help you with your small business needs.
The Founding of SBA
To streamline government support for small business President Eisenhower proposed the formation of the Small Business Administration and it was created by Congress in July 1953." The charter also stipulated that SBA would ensure small businesses a "fair proportion" of government contracts and sales of surplus property.
Initially the SBA focused on providing direct loans to small businesses, guaranteeing bank loans and making loans to victims of natural disasters. The Administration also provided assistance to small businesses to procure government contracts and provided management consulting and technical assistance.
The Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program, under which SBA licensed, regulated and helped provide funds for privately owned and operated venture capital investment firms. They specialized in providing long-term debt and equity investments to high-risk small businesses. Its creation was the result of a Federal Reserve study that discovered, in the simplest terms, that small businesses could not get the credit they needed to keep pace with technological advancement.
In 1964 the SBA expanded its portfolio to join the War on Poverty, with the Equal Opportunity Loan Program (EOL). The Equal Opportunity Loan Program presented citizens living below the poverty level with the opportunity to receive credit with reduced collateral and application requirements. This enabled small businesses with sound business opportunities to get the financing that they needed to pursue them.
The breadth and scope of programs offered by the Small Business Administration has never been more extensive than it is today. The SBA helps and is an advocate for all U.S. small businesses in every enterprise category and every State and Territory. Whether its providing procurement assistance for federal contracts, management consulting, or outreach to women, minorities and veterans, the Small Business Administration is an able partner. SBA also provides loans to victims of natural disasters and specialized advice and assistance in international trade.
About The Author
In the world of social enterprises, failure is a cringe-worthy moment nobody wants to talk about. But, social entrepreneurs can benefit from their failures.