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Business Inspiration, Small Business Tools

5 Small Business Programs that are Going, Going…

Small business owners watching or reading the news lately should feel pretty darn important. It seems that every other story out of Washington D.C. is about stimulating the economy by promoting business. That’s why it was a little surprising when President Obama announced Monday that his new budget plan would cut funding for the Small Business Association (SBA) almost in half. The SBA is the government’s department dedicated to all businesses small and growing, and it is home to a whole host of programs for small business owners. Probably their best known initiative is backing loans to small business owners in orders to persuade banks to lend.

Of course, one of the reasons we started Kabbage was because banks aren’t lending to ecommerce sellers, SBA or no SBA. (They just aren’t equipped to evaluate an ecommerce business! Though that’s a topic for a whole other post.) To that end, we have to wonder if there isn’t something to cutting programs that aren’t working while keeping the one that are. But then that led us to wonder what is the SBA up to these days, anyway? Here are 5 programs the SBA has in place. If one appeals to you, better jump on it before it’s on the chopping block in 2012!

  1. Small Business Loan Guarantee Program – When banks decided that loaning to small businesses – many of which fail – was too risky, the government stepped in to give banks an incentive to reconsider. As of now, the SBA will back loans make up for a percentage of losses sustained by banks when a small business loan goes south.  This program includes a microloan program and the brand new “Lending Initiatives for Underserved Communities,” both of which were designed to help “micro” businesses, a category which many ecommerce sellers fall into.  Unfortunately, this program also represents a major portion of the 2012 budget cuts – these small business loan incentives will no longer be in place when 2011 is up. On one hand, it’s a shame that the government will no longer provide this incentive. On the other hand, if the program were actually working, small businesses would have been able to actually apply for and receive loans over the past few years…
  2. Import/Export Assistance – While importing and exporting sounds like big business, approximately 70% of exports in the U.S. have fewer than 20 employees. Small business makes the global economy go around, and one of President Obama’s major initiatives at the beginning of his term was to try and get a piece of that global purchasing pie by helping small business owners export. The SBA supports several different initiatives to provide loans or capital to exporters.
  3. SCORE – An acronym for the “Service Corps of Retired Executives,” SCORE helps small business owners with classes on everything from business plan writing to marketing. One of their more useful initiatives allows small business owners to ask experienced business owners questions. And the service is free! (Try comparing that to the price of an appointment with a lawyer or accountant.)
  4. Disaster Assistance – This program helps small businesses prepare for disasters before they strike, as well as helps them get back on their feet after a fire, flood, hurricane or other such disaster. Assistance includes loans to business owners, unemployment loans and even coordinating FEMA assistance, all designed to help get your business back to the state it was in before disaster struck.
  5. Government Contracting Assistance – The SBA also helps small business register to become government contractors. They walk you through steps like getting a DUNS number and registering with the various government entities that will need to evaluate you before you can even begin to bid on contracts.