Question

NO HANDWRITTEN OR COPIED ANSWERS

Describe some of the SBA’s programs for small businesses and economic performance.

Answer 1

            Introduction:-

To understand the concepts of US Small Business Administration Act let us understand the meaning and importance of small business in development of a society and the economy as a whole.

Each big organization in the United States begun with an idea in the backyard for an example with companies such as Microsoft and Apple being few that only had an Idea in mind and would have failed without active government policies that help in promoting small businesses from growing.

Usually the idea behind developing small businesses is that they deploy larger manpower which facilitates inclusive growth. Larger business owners are more capital intensive in their approach and do not have their manufacturing in smaller areas whereas small scale owners can be found across the country.

Case Specifics:-

The Small Business Act was passed in the year 1953 by then President Eisenhower to help and promote small business owners in help in the form of Capital, Administrative Help or Counselling and Contracts guarantee to help them in growing.

Over the years, the Small Business Act has rapidly changed and survived being axed in the general interests of the business owners respectively.

The 3 C's of Small Business Act and their relevant policies are explained as follows.

1) Capital:-

The prime objective of the Small Business Act is to ensure higher capital availability to the small business owners in the form of credit from Financial and Non-Financial Banking Institutions to allow them to function properly.

This is undertaken in the form of Loan Guarantee Programs in which the small business owners get credits which are guaranteed in case of default by government undertakings. The government critically evaluates small business owners to allow for a particular amount to be disbursed by banks and this largely helps in availability of capital to the same.

Further initiatives include programs such as Micro Loan Programs, in which the government lends money directly to qualified lenders which in turn give away money as loans.

Disaster Loan Programs are also a way in which the Act helps small business owners from recovering from disaster like hurricanes. The Program directly benefits those which require reconstruction of business due to damage by providing low interest rate loans respectively.

(2) Counselling:-

Another feature of the Act is how it counsels entrepreneurs in doing their business. Through the help of this act various centers have been set across the country to allow for guidance to small firms and individuals that want to conduct their business. There are over 800 Small Business Development Centers which are primarily found around state universities, schools, entrepreneur hubs etc.

Another feature of Counselling are the Women Business Development Centers which focus on women and their growth as business owners. They provide financial knowledge assistance and try to develop women into being successful entrepreneurs. They receive regular grants from the government in their endeavors.

(3) Contracting:-

The SBA Act has ensured that 23% of the Contracts that have been given out by the United States administration are directly given to small business owners. This helps in ensuring that the federal government reaches out not only to large corporations in sourcing the products they require but also reach out to small business owners, particularly women which are vulnerable if left without guidance respectively.

Please feel free to ask your doubts in the comments section.