Small Business Administration: A Primer on Programs Page: 10 of 24
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Small Business Administration: A Primer on Programs
SBA Small Business Financial Programs
The SBA has four types of programs to directly support small businesses that are not disaster-
related. The first are loan guarantees in which the SBA guarantees loans to small businesses that
the private sector would otherwise be unwilling to make.
The second are contracting programs for small businesses that can involve sole source, limited
competition, and cost advantages in government contract competitions. Sometimes the use of
small business subcontractors is an evaluation factor for the prime contractor. When a
government agency is planning a procurement, it chooses between one of these vehicles, and one
in which there are no special advantages for small businesses.
The third are "capital access" programs that indirectly provide equity funding for small
businesses and improve access to capital markets through SBA guarantees.
The fourth are entrepreneurial development programs to provide training to small business
owners mostly using volunteers and nonprofits.
With few exceptions, to qualify for SBA assistance, an organization must be both a business and
What Is a Business?
To participate in any of the SBA programs, a business must meet the SBA's definition of "small
business." This is a business that
" is organized for profit;
" has a place of business in the United States;
" operates primarily within the United States or makes a significant contribution to
the U.S. economy through payment of taxes or use of American products,
materials or labor;
" is independently owned and operated; and
" is not dominant in its field on a national basis."
The business may be a sole proprietorship, partnership, corporation, or any other legal form.
13 For additional information, see CRS Report R40860, Defining Small Business: A Historical Analysis of
Contemporary Issues, by Robert Jay Dilger.
14 The SBA provides financial assistance to non-profit organizations to provide training to small business owners, and
to provide loans to small businesses through the SBA Microloan program. Also, non-profit childcare centers are
eligible to participate in SBA's Microloan program.
1s 13 C.F.R. 121.105.
Congressional Research Service
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Small Business Administration: A Primer on Programs, report, June 22, 2011; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc805667/m1/10/: accessed April 23, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.