USA small business administration

  • Created:
  • / Author: Aaron Lewis

The purpose of SBA

SBA (U.S. Small Business Administration) is headquartered in Washington, in the country has 69 branches,Most of the policies and measures American government support the development of small enterprises is through the implementation of the. For small businesses, development process faces many difficulties and challenges, such as the financing channel is narrow, lack of management,Market development ability is weak. SBA based on careful research on small enterprise difficult, strictly follow the basic law of the market economy, make full use of market mechanism, especially the use of America developed banking system, capital market and modern financial instruments, design that can support the development of small enterprises, but also the policy of each active system, to promote the small enterprise.

Mode of operation

SBA uses America big banking system, established a loan guarantee cooperation relationship with many banks. When the small enterprises to apply for loans from the bank, the bank first, credit status, the small business plan, market prospect evaluation, if that risk is small, direct bank lending; if that risks need to SBA guarantee, then complete the assessment report and submit. SBA to the bank's assessment report as the basis for the review, as agreed to provide the guarantee, the bank loans, such as that the risk will guarantee, banks are not lending. SBA secured funding from the federal budget. When SBA promised to guarantee, it does not require immediate payment and loan guarantees the same amount of guarantee funds, only when the use of loans of small enterprises are unable to repay, using SBA guarantee funds for small business.

The impact on the market

Practice has proved,Loan guarantee program operation is very successful. By the end of 1998, SBA provides a guaranty loan balance of $29000000000, support about 20 of thousands of small businesses. The plan's success, because it is the design of a bank and SBA can benefit from the "win-win" mechanism.