SBA 101: Understanding the Small Business Administration | Florida Capital Bank

In 2012, the administrator of the Small Business Administration (SBA) was given cabinet-level status in the federal government, bringing the SBA into a more prominent role. But what exactly does the Small Business Administration do? How can it help your business?

The Small Business Act of July 30, 1953 was passed by Congress under Dwight D. Eisenhower, and its function was to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.”

Small businesses have been an important sector of our national economy. In fact, a recent study from ADP Research Institute reported that companies with 499 employees or less accounted for 83% of new jobs in early 2015. Clearly, the success of small businesses is integral to our national economic health, so it’s important to know what the Small Business Administration can and cannot do to help American businesses.

What the SBA Does

Shares Loan Risk

While the SBA does not make loans to businesses itself, it does however partner with financial institutions to lend money to new or growing small businesses. Financial institutions and the SBA share the risk on some of the following types of loans:

7(a) Program: This loan helps startups and existing small businesses with financing for general business purposes

CDC/504 Loans: These loans are specifically for real estate and equipment for small businesses

Disaster Loans: Disaster loans help businesses to recover after certain types of disasters

Microloans: These small, short-term loans are for specific projects or short-term needs


Small Business Development and Training

The SBA offers free training and counseling, both face-to-face and over the Internet for small businesses and entrepreneurs. This training and counseling can help small businesses owners address potential pitfalls and educate them about successful business practices. This counseling is available for new and existing small businesses.

Government Contracting Opportunities

Section 15(g) of the Small Business Act sets goals regarding government contracts for small businesses. Small businesses interested in attaining government contracts can work with the SBA’s Office of Government Contracting for help in this endeavor. The office helps small businesses with subcontracting procurement opportunities and provides training and outreach programs.

Advocacy for Small Business

Created in 1953, The Small Business Administration reviews legislation and testifies on behalf of small business. It also examines the regulatory burden on America small businesses by conducting research on the many factors that influence businesses.


What the SBA Does Not Do

Fund Loans

The Small Business Administration does not fund loans. SBA loans are made through banks, credit unions, and other lending institutions that partner with the SBA. The SBA provides a government-backed guarantee on the loans made through its lending partners. The SBA does not provide grants either, but it does fund the Disaster Relief Loans.

Create Legislation

Although the administrator for the Small Business Administration is currently a member of the cabinet, the SBA does not create any legislation. It does however, monitor legislation discussed in Congress and the Senate and makes recommendations on that legislation based on how the laws would affect small businesses nationwide.

How Can the SBA Help Your Business?

With a working knowledge of what the SBA does and does not do, you can put the SBA to work for you. Do you need guidance regarding expanding or starting a new business venture? The SBA can help with resources, training, and counseling. For more information about the SBA and how they help business owners, vist their site at


Are you ready to talk about expansion, acquisitions or refinance options for an existing commercial business loan? SBA loans from a local bank, such as Florida Capital Bank, can help meet your business needs. Learn more about our SBA program and our team of SBA specialists here  or give us a call at 844.200.FLCB(3522) for more information.