Offering Valuable Business Growth and Sustainability Assistance - The Small Business Administration

Montrie Rucker Adams, APR

Many business owners can attest to at least hearing about or being directed to the Small Business Administration (SBA). Often, they are told that before starting their business, they should contact the SBA and see from what programs and assistance they can benefit.

Wondering what the SBA can do to support you and your business? Some of your greatest challenges as a business owner can be addressed with support from the SBA, including access to capital, contracting opportunities, and counseling services.

SBA Provides Access to Funding for Small Businesses

The SBA is committed to providing equitable access for all, including those that have been underserved. The SBA offers three types of funding to help small businesses.

SBA-Guaranteed Loans are commercial loans made by SBA partners (lenders, community development organizations, and micro-lending institutions) with guidelines set by the SBA. The SBA guarantees that these loans will be repaid, which eliminates some of the risk to the lending partners. Traditional SBA lending options include 7(a) loans, 504 loans, microloans, and Coronavirus relief options such as the Paycheck Protection Program.

Small Business Investment Company (SBIC) program is a public-private investment partnership created to help fill the gap between the availability of growth capital and the needs of small businesses. The SBA does not invest directly in small businesses, relying instead on the expertise of qualified private investment funds. The SBA licenses these funds as SBICs and supplements the capital they raise from private investors with access to low-cost, government-guaranteed debt.

Surety Bond Guarantee (SBG) program helps small business contractors who cannot obtain surety bonds through regular commercial channels. Surety bonds help small businesses win contracts by providing the customer with a guarantee that the work will be completed. The SBA guarantees surety bonds for certain surety companies, which allows the companies to offer surety bonds to small businesses that might not meet the criteria for other sureties.

Peter Gibbs, Director of SBA Office of Surety Guarantees, explains that the two major issues for small businesses are the ability to secure bonding and access to working capital. Gibbs states “the advantage of working with the SBA is that they will guarantee 80 to 90 percent of the bond”. Gibbs emphasizes “Whatever amount a company qualifies in the standard bonding market, they will most likely qualify for twice the amount in the SBA surety program”.

SBA Helps Small Businesses Sell to the Government

The U.S. Government is the largest single purchaser of goods and services in the world. The SBA offers assistance to find, compete for, and win federal government contracts. The SBA’s contracting assistance programs help small businesses win federal contracts.

8(a) Business Development program is a business development program created to help small disadvantaged businesses access the federal procurement market. Participants in the 8(a) business development program can receive sole source contracts up to $4 million for goods and services and $7 million for manufacturing. The federal government has a goal of awarding 5 percent of all dollars for federal prime contracts to 8(a) firms.

Historically Underutilized Business Zones (HUBZone) program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. The HUBZone program fuels small business growth in historically underutilized business zones with a goal of awarding at least three percent of federal contract dollars to HUBZone-certified companies each year.

Women-Owned Small Business (WOSB) Federal Contracting program is designed to provide greater access to federal contracting opportunities for WOSBs and economically disadvantaged women-owned small businesses (EDWOSBs). The program aims to help federal agencies achieve their statutory goal of awarding 5% of their federal contracting dollars to WOSBs.

Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC) program was developed to help agencies meet the government-wide goal that not less than 3% of the total value of all prime contract and subcontract awards be made to small businesses owned and controlled by service-disabled veterans. This allows contracting officers to create SDVOSB set-asides or make sole source awards in an effort to meet the 3% goal. 

SBA Helps Scale Small Businesses

If you don’t qualify for the SBA’s contracting assistance programs, the SBA can provide invaluable support to you and your small business through a network of local partners that counsel, mentor, and train small businesses.

Small Business Development Center (SBDC) is a network of centers that provide counseling and training to help small business owners start, grow and expand their business.

Service Corps of Retired Executives (SCORE) are volunteer business counselors, advisors, and mentors who offer individual free to low cost counseling throughout the U.S. and its territories.

Veteran’s Business Outreach Center (VBOC) is designed to provide entrepreneurial development services and referrals for eligible veterans owning or considering starting a small business.

Women’s Business Center (WBC) provides free to low cost counseling and training and focus on women who want to start, grow and expand their small business.

Interested in the SBA offerings and programs? Visit the Cleveland District Office at www.sba.gov/offices/district/oh/cleveland. The District serves 28 urban and rural counties in Northern Ohio: Ashtabula, Carroll, Columbiana, Cuyahoga, Defiance, Erie, Fulton, Geauga, Harrison, Henry, Huron, Jefferson, Lake, Lorain, Lucas, Mahoning, Medina, Ottawa, Portage, Sandusky, Seneca, Stark, Summit, Trumbull, Tuscarawas, Wayne, Williams, and Wood.