Small Business Administration Definition

The Small Business Administration (SBA) is a government agency in the United States that provides support, resources, and loans to small businesses to help them start, grow, and prosper.

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When you’re starting your own business, you might need support in many different ways. This could mean support with your day-to-day operations, legal support, financial support, or support with new opportunities. There are many ways you can search for business resources and lenders willing to give you start-up money. The Small Business Administration (SBA) is a popular way to start. 

Let’s take a look at the Small Business Administration definition.

What is the Small Business Administration?

The Small Business Administration, by definition, is a federal government agency that provides certain resources to small businesses. These resources include: 

  • Financing options
  • Business counseling
  • Help with getting government contracts

Your business might have to meet certain eligibility requirements to take advantage of the Small Business Administration’s services.

Help with financing

There’s only one type of loan that the SBA makes directly to small businesses: a loan to help with disaster recovery. Otherwise, the SBA matches businesses with different kinds of lenders. The SBA can help match you with lenders that provide:

  • 7(a) loans (up to $5 million)
  • 504 loans (for buying or fixing certain real or personal property)
  • Microloans (up to $50,000)

But even with the SBA’s lender-matching help, it’s important to speak to legal and financial experts before taking on a loan. 

Help with Finding Counseling

The SBA can help some businesses find counseling through SBA-partnering experts and organizations. 

Help with Getting Government Contracts

If you’re prepared to take on the responsibility, running your business by getting and fulfilling government contracts can be very lucrative. Recently, the federal government spent over $600 billion on government contracts in only one year. The SBA can help your business find federal government contracts and secure them.

What are Small Business Administration advantages?

If you’re new to the business world, you might not know who to talk to about financing or business opportunities. If you use the Small Business Administration, benefits might include help with finding lenders, counseling, and contracts to build capital and bring in revenue.

What are Small Business Administration disadvantages? 

Sometimes the SBA can be more exclusive with its services than other private entities that offer similar benefits. The Small Business Administration might deny you services if:

  • Your business is too big
  • Your business receives funding from other sources
  • You don’t have a certain immigration status
  • Your business doesn’t have the right purpose

This is only a handful of eligibility issues you might encounter when using the SBA for services. You could also encounter these same eligibility issues using other services, but there are some resource services that can be more flexible with the characteristics of your business.

Summary

The Small Business Administration is a federal agency put in place to help small businesses get off the ground. If you have a small business that fits the right criteria, the SBA can help you find financing, government contracts, and business counseling. However, not all businesses have access to all of these SBA resources. 

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We can help!

To use many SBA resources, you need to have an officially registered and fully operating business. We can help with that! Our large catalog of business formation services can help you easily register a new business in your state and keep it running smoothly. We can help you get started, help you handle your money, and help you stay legally compliant from start to finish. 

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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