The Small Business Administration (SBA) is the government’s response to support small businesses in America. While many within the SBA do their best to connect with small firms around the nation, more often than not, the government does not do much to support the department. For example, did you know that the SBA ” does not actually give out loans. It guarantees the loans made by banks to higher-risk, small business applicants.” The are other departments that do give out grants for small suppliers that meet requirements but the SBA does not directly invest in companies.
While it does make some sense (e.g. meeting government requirements for money can be daunting for small businesses not looking to sell to the government), looking at the department for the long term, small grants totaling a few million could go a long way. You’re dealing with companies that only need 25K – 50K in investment to ramp up growth and the lack of support from the government directly is telling.
The SBA is allowed to give one certain type of loan, and that is for companies falling victim to disasters. “In its last fiscal year, the administration issued more than $7bn in direct loans to small businesses, non-profits, homeowners and renters affected by hurricanes, floods, droughts, tornadoes and other natural disasters around the country.” With the rise of climate change related disasters it appears this amount may increase.
A silver lining but one that still does not address the lack of support from the government overall. Simply investing $10 to $50 million directly with small businesses could address a ton of growth concerns for small firms and its unfortunate this is not the case.