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Analysts of small business recognize that several economic factors tend to thwart this business form. To offset these factors, legislation was enacted creating the Small Business Administration, an independent federal agency. In Washington, D.C., and in regional offices around the country, trained specialists provide professional expertise and financial assistance to those wishing to form small businesses or to those already operating such businesses.
In a typical year, the SBA guarantees about $3.5 thousand-million of bank loans made to small businesses. These loans usually are for the purchase of plant, equipment and inventory.
A unique feature of the SBA is the management assistance that is offered to new or faltering businesses. In the SCORE program, successful entrepreneurs who are retired volunteer their services to help others. Working in conjunction with individual state agencies and universities, the SBA also operates about 700 Small Business Development Centers that provide technical and management assistance to new and existing small businesses.
The SBA makes a serious effort to fund programs for minorities, especially African-, Asian- and Hispanic-Americans. The agency also administers an aggressive program to identify international markets and joint venture opportunities for small businesses that have export potential.
In addition, the SBA is well known for its disaster relief program. Ever since its inception, the SBA has offered assistance to homeowners and business firms suffering physical damage as a result of floods, hurricanes, tornadoes and other natural disasters.