Infographic helps correct misconceptions about the Small Business Administration, and documents the history of the organization dating back to the Great Depression.
SALT LAKE CITY – As loans guaranteed by the Small Business Administration hit records high last week, the Obama Administration has been busy putting even more resources and money into the SBA.
As shown by our recent infographic from Lendio, Obama is not the only U.S. president — or member of Congress for that matter — to try to spur the economy through the SBA in the last 80 years.
In essence, the SBA’s roots date back to President Herbert Hoover, who created the Reconstruction Finance Corporation in 1932 to help pull the country out of the Great Depression. About 20 years later, that organization had morphed into the Small Business Administration, established by Congress as the to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.”
Since then, the SBA has survived various threats to its existence, and continues to be the source of controversy. Much of that controversy, however, may be because of misconceptions about the program.
“Most business owners across the United Sates think that the SBA is a lender,” said Brock Blake, Lendio CEO. “The SBA is not a lender. What the SBA really is, in its truest sense, is an insurance program for the lenders, for the banks and credit unions. The bank still is the one who makes the decisions.”
Since 1953, 20 million businesses have received direct or indirect help from an SBA program. In many cases, those funds would not have been made without the SBA backing those loans. Last week, Vice President Joe Biden, SBA Administrator Karen Mills and other banks pledged more than $20 billion to small business lending.
“The SBA has always been criticized that it doesn’t do that much,” said Bob Coleman, small business lending expert, and owner of Coleman Publishing, on a recent Lendio podcast. “But 6 percent of this year’s INC 500 companies started with an SBA loan. Only 4 percent got a conventional loan. SBA financing has become very, very important to the entrepreneur.
“I know there’s a concern about the government, about what’s happening, and about what these programs cost, but just remember this, the SBA didn’t need a bailout,” Coleman said.
To see the full History of the SBA infographic, or for the embed code top put on your website or blog, go here: //www.lendio.com/blog/infographic-history-small-business-administration-sba/1/
Lendio makes business loans simple by matching qualified small business owners with active banks, credit unions, and other lending sources. Through a proprietary matching technology, Lendio assists a business owner to identify the business loan category and specific lenders that offer the highest probability for that business owner to prepare for and secure a business loan approval. Lendio formerly operated as FundingUniverse.com. For more information, contact Lendio at press(at)lendio(dot)com.