History and role of SBA
Events leading up to the agency’s creation
SBA’s creation was largely a response to the pressures of the Great Depression and World War II. Read through to get a sense of how the agency’s mission took shape.
- 1932: The Reconstruction Finance Corporation (RFC) is created by President Herbert Hoover to address the financial crisis of the Great Depression. The RFC is a federal lending program for all businesses, large and small, hurt by the Great Depression.
- 1942: Congress creates the Smaller War Plants Corporation (SWPC). The SWPC loans money to entrepreneurs and encourages financial institutions to extend credit available to small enterprises. The agency also advocates on behalf of small business to federal agencies and big businesses.
- 1945: WWII ends, and the SWPC is abolished. Its lending and contract powers are given over to the RFC. The U.S. Department of Commerce takes on some duties addressing small businesses. In the belief that a lack of information and expertise is the main cause of small business failure, the agency produces brochures and counsels individual entrepreneurs in management.
- 1950: The Korean War leads Congress to create the Small Defense Plants Administration (SDPA). SPDA is very similar to the SWPC, except that RFC keeps ultimate lending authority. SDPA evaluates small businesses and certifies them to the RFC if they judge the business can execute government contracts.
- 1952: Legislation marks an end to the RFC. All functions are transferred to the Department of the Treasury.
- 1953: President Dwight Eisenhower signs the Small Business Act into law on July 30, creating a new agency, the U.S. Small Business Administration (SBA). SBA’s mission is to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns." It also is charged with ensuring that small businesses earn a "fair proportion" of government contracts and sales of surplus property.
SBA’s early days
By 1954, SBA is making and guaranteeing loans for small businesses. It loans money to victims of natural disasters and helps small businesses get government contracts. SBA also provides business owners with management and business training.
A 1957 Federal Reserve study finds that small businesses can’t get the credit they need to keep pace with technological advancements. The Investment Company Act of 1958 establishes the Small Business Investment Company (SBIC) Program. Under SBIC, SBA licenses, regulates, and helps fund private venture capital investment firms. These firms provide long-term debt and equity investments to high-risk small businesses.
In 1964, SBA begins to attack poverty through the Equal Opportunity Loan (EOL) Program. EOL relaxes the credit and collateral requirements for applicants living below the poverty level. This provides encouragement to new businesses that had been unable to attract financial backing but were sound commercial initiatives.
SBA today and in the future
Since the agency was founded, SBA has expanded the help it provides. SBA's programs now include help with management, as well as financial and federal contract procurement. SBA provides specialized outreach to women, minorities, and armed forces veterans. SBA loans are available to victims of natural disasters. The agency also offers specialized advice and support in international trade.
SBA was created to preserve free competitive enterprise and to maintain and strengthen the nation’s economy. We remain committed to that goal. In our 2022-2026 strategic plan, SBA describes:
- How we will help ensure that our program delivery is equitable, customer-centric and supports small businesses and innovation
- Strategies for building resilient businesses and a sustainable economy
- A plan for managing its technology and human resources for greater impact
With its commitment to these goals, SBA is working to create a more equitable and sustainable economy supported by America’s small businesses.
SBA legacy businesses
For 70 years, America’s entrepreneurs have relied on SBA support to help start and grow their small businesses. The federal agency has provided trillions of dollars in support to small businesses and has helped millions of small-business owners build meaningful lifelong connections and power their local economies.
In recognition of our nation’s successes, SBA is honoring some of the many Legacy Businesses who have leveraged SBA capital and resources to grow their businesses and strengthen their local economies and communities.
- Alabama: Stanley Construction, Huntsville
- Alaska: Santa Claus House, North Pole
- Arizona: Sonoran Technology and Professional Services, LLC, Goodyear
- Arkansas: McCormick Asphalt Paving and Excavating, Inc., Mulberry
- California: Equator Coffee, San Rafael; Meissner Filtrations Inc., Camarillo; Exquadrum, Inc., Victorville; Leatherby Family Creamery, Sacramento, Citrus Heights; Cosmopolitan Tavern and Italian Grill, Fresno; Herman Construction, Escondido
- Colorado: Snooze AM Eatery, Denver
- Connecticut: The Farmers Cow, Bozrah
- Delaware: High 5 Hospitality – H5H, Newark
- Florida: Leasa Industries, Miami; Engineering and Computer Simulations Inc., Orlando
- Georgia: Arden’s Garden, East Point
- Hawaii: Maui Brewing Company, Kihei
- Idaho: Rekluse Motor Sports, Boise
- Illinois: Skyway Bowl, Chicago
- Indiana: Wild Birds Unlimited, Indianapolis
- Iowa: Iowa Spring Manufacturing, Adel
- Kansas: ShieldAg Equipment, South Hutchinson
- Kentucky: Flavorman, Louisville
- Louisiana: Angelica Food Manufacturing, Saint Gabriel
- Maine: Sea Bags, LLC, Portland
- Maryland: Montgomery County Chamber Community Foundation (MCCCF), Rockville; EMD Sales, Baltimore
- Massachusetts: Wachusett Mountain Associates, Princeton
- Michigan: Hacienda Mexican Foods, LLC, Detroit
- Minnesota: Angie’s Boom Chicka Pop, North Mankato
- Mississippi: SOL Engineering Services, LLC, Jackson
- Missouri: Cohen Architectural Woodworking, St. James; Freedom Interiors, Kansas City
- Montana: Wood’s Powr-Grip Co., Inc. Laurel
- Nebraska: Firespring: Integrated Marketing, Printing, and Websites, Lincoln
- Nevada: Cashman Photo Enterprises of Nevada Inc., Las Vegas
- New Hampshire: WS Badger, Gilsum
- New Jersey: Gladys’ Cleaning Service/GCS Cleaning Enterprises, Union
- New Mexico: Olive Tree Compounding Pharmacy, Rio Rancho
- New York: Bogota Latin Bistro, Brooklyn; Chobani, New Berlin; Datrose Inc., Webster
- North Carolina: Highland Brewing Company, Asheville
- North Dakota: Laducer Information Management, Mandan
- Ohio: Humtown Pattern Company, Columbiana; E. E. Ward Moving & Storage, Grove City
- Oklahoma: Schatz Publishing Group LLC/Schatz Strategy Group, Blackwell
- Oregon: Columbia Sportswear, Portland
- Pennsylvania: Royal Truck & Equipment, Shoemakersville; DelGrosso Foods, Inc. / Laguna Splash Limited, Tipton
- Puerto Rico: Global Manufacturing LLC & Global Mattress LLC
- Rhode Island: Dr. Daycare, Inc., Smithfield
- South Carolina: Holy City Linen Services, Mt. Pleasant & North Charleston
- South Dakota: Simpsons Printing, Rapid City
- Tennessee: Expoquip, Inc., Knoxville
- Texas: GCC Enterprises, Dallas; Tommy Graham’s Paint and Body, Harlingen; Noble Machine, Houston; Merchant Security, LLC, El Paso; Plains Cotton Cooperative Association (PCCA), Lubbock; Avantgarde, LLC, Georgetown
- U.S. Virgin Islands: Alvin’s Hot Sauce, Christiansted
- Utah: Tuacahn Center for the Arts, Ivins
- Vermont: 14th Star Brewing Company, LLC, St. Albans
- Virginia: FamMat (Family Matters) Services LLC (also Maximized Life Coaching, TAG Consulting – Lawrence & Make ‘Ur Merch – Makerspace for Underserved Community, Inner Peace Coalition – Non-profit, Williamsburg
- Washington: Pike Place Fish Market, Seattle
- West Virginia: Action Facilities Management, Morgantown
- Wisconsin: Culver Franchising System, LLC, Prairie du Sac
- Wyoming: Eagle Bronze, Lander