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The Benefits of Working With the SBA

Donna Fuscaldo
Donna Fuscaldo
Senior Finance Writer Staff
Updated Sep 07, 2022

From access to capital to education and counseling, the Small Business Administration has a lot to offer small business owners.

What is the SBA?

Formed in 1953 under the order of President Dwight D. Eisenhower, the Small Business Administration, or SBA, is charged with aiding, counseling, and protecting the interests of the small business owner. In recognition of the large role small businesses play in the economy, the SBA was created as an independent federal agency to be the voice of small business owners and protect the economy. The SBA charter also calls on the agency to ensure small businesses get their fair share of government contracts.

“The U.S. SBA is one of the smallest federal Cabinet-level agencies, with 4,000 employees and 68 offices across the country,” Scott said. “Folks in the field are helping those small businesses, whether they are startups or existing businesses. The great thing about the SBA is tax dollars pay for the SBA. We don’t charge additional fees for the types of services consultants charge for.”

The SBA’s support for small businesses doesn’t end with its agency. It provides grants and partners with other nonprofits to assist small business owners, such as through its nearly 900 Small Business Development Centers and more than 100 Women’s Business Centers. The SBA also partners with SCORE, a nonprofit network of business counselors.

“Both the SBA and SCORE are here to help small businesses start to grow and survive,” said Bridget Weston, CEO of SCORE. “We know how important small businesses are to our economy and continue to do whatever it takes to make them succeed.”

What does the SBA do?

The SBA’s services can be broken down into four buckets: access to capital, business development, government contracting, and advocacy. All are designed to benefit small business owners in different ways.

Capital access

By far the SBA’s most popular service, SBA loans provide business owners with access to capital at reasonable interest rates. They are designed for business owners who might not be approved by a bank. The goal is to get funding into the hands of small business owners so they can grow their operations, hire more staff, and keep the economy humming. The SBA’s access to capital runs the gamut from equity investment capital to microloans. Businesses must complete the SBA loan application to be considered for a loan.

Business development

While small business owners are great at what they make or the services they provide, that doesn’t mean they are expert accountants or marketers. The SBA provides free counseling and low-cost training in more than 1,800 small business centers across the country. The SBA Office of Entrepreneurial Development oversees the counseling and training programs through its Small Business Development Centers, Women’s Business Centers, and the SBA’s partnership with SCORE. The Office of Entrepreneurship Education runs the SBA’s free online Learning Center and its Emerging Leaders program, which is an intensive executive-level training series geared toward small business leaders operating in underserved cities.

SCORE is an important part of the SBA’s efforts, providing small business owners with access to more than 13,000 volunteer business counselors, 348 chapters, and the SCORE website.

“SCORE is that guide, that resource, that mentor to small business owners,” Weston said. “There are tons of mentors and advisors that can help them navigate and cut through the noise to find the best next step for their small business.”

Government contracting

One of the missions of the SBA at its inception was to ensure that small business owners received access to government contracts, and that is still its main role. It works with other federal departments and agencies to ensure 23% of government contract dollars go to small businesses.


Small businesses are the backbone of the economy. The SBA advocates for their interests with lawmakers and competitors, whether that means reviewing legislation, assessing the impact of regulations, or testifying before Congress on behalf of small businesses.

How does the SBA benefit businesses?

One of the biggest benefits of the SBA has long been the access to capital. That was the case before the pandemic and is even more so now, with the coronavirus continuing to rage. The SBA has played a vital role in the economy during the pandemic with its disaster loan programs. With small businesses accounting for 44% of U.S. economic activity, forgivable small business loans for the community have been critical. The Paycheck Protection Program has been particularly popular, giving small business owners access to loans that are forgivable if they use the proceeds to keep their employees on the payroll. Meanwhile, the SBA’s COVID-19 Economic Injury Disaster Loan gives business owners access to low-interest loans that they can pay back over 30 years.

“Our role has expanded greatly, and I don’t think we’re ever going back,” Scott said. “If we ever go through another pandemic or national crisis where the economy is hurting, a lot of it is on our back.”

Outside of a PPP loan or disaster loan, the SBA has several funding products. These are some of them:

SBA 7(a) loan

With the SBA 7(a) loan, the most popular SBA loan program outside of the PPP, small businesses can borrow up to $5 million for short- and long-term working capital to refinance expensive debt or to buy equipment and supplies. An SBA-approved bank or lender provides the loans. The SBA guarantees 85% of the loan up to $150,000, and 75% of the loans for higher than $150,000, for the SBA lender.

SBA 504 loan

The SBA 504 loan is a long-term, fixed-rate business loan to cover the costs of fixing or upgrading assets and expanding the business. Business owners can use the proceeds for existing buildings or land, new facilities, and long-term machinery and equipment, and to improve and modernize parking lots, landscaping, and existing facilities. The loan can’t be deployed for working capital, inventory, debt refinancing, or speculative investments, including rental real estate.

These loans are accessible from Certified Development Companies (CDCs), which are nonprofits certified by the SBA to work with lenders in order to provide financing to small businesses in their communities.


The SBA’s microloans max out at $50,000, providing small businesses and some not-for-profit child care companies with small loans to help them get off the ground or expand. According to the SBA, the average microloan is $13,000. The SBA provides the funds to nonprofit community-based organizations that it deems designated intermediary lenders, which then administer the microloans.

“These capital programs are for those business owners who do not have the perfect credit situation and don’t have Grandma to hand them $50,000 or $100,000, or had credit issues in the past,” Scott said. “A lot of lenders won’t give startups or businesses a chance to grow. That’s where we come in.”

Image Credit: Kerkez / Getty Images
Donna Fuscaldo
Donna Fuscaldo Staff
Donna Fuscaldo is a senior finance writer at and has more than two decades of experience writing about business borrowing, funding, and investing for publications including the Wall Street Journal, Dow Jones Newswires, Bankrate, Investopedia, Motley Fool, and Most recently she was a senior contributor at Forbes covering the intersection of money and technology before joining Donna has carved out a name for herself in the finance and small business markets, writing hundreds of business articles offering advice, insightful analysis, and groundbreaking coverage. Her areas of focus at include business loans, accounting, and retirement benefits.