Order Code RS22703
August 7, 2007
Small Business Administration Programs for
Women, Minorities, and Veterans
N. Eric Weiss
Analyst in Financial Institutions
Government and Finance Division
Summary
The Small Business Administration (SBA) encourages small business owners and
those who want to start small businesses through technical support and guaranteeing
private sector loans. Most programs are available to all who seek help, but some are
targeted to specific groups such as women, minorities, and veterans. This report
provides a brief summary of these SBA programs. More detailed information on many
of the programs is available in CRS Report RL33243, Small Business Administration:
A Primer on Programs by N. Eric Weiss. The SBA website, [http://www.sba.gov], has
additional information. Brief mention is made of programs for women, minorities, and
veterans in other federal agencies.
This report will be updated as warranted.
General Programs
These SBA programs are available to anyone interested in starting a small business
or seeking assistance in managing one.
Loans and Grants. The only loans (which must be repaid) that the SBA makes
directly to businesses are physical and economic injury disaster loans. The SBA’s major
program to support small business access to capital is to guarantee loans made by private-
sector lenders to small businesses. In general, these SBA loan guarantees result in
reduced interest rates and longer repayment terms than private sector loans without the
guarantee. Borrowers and lenders negotiate the terms of the loans, subject to SBA’s
limits on amount borrowed, interest rate, and maturity.

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The SBA’s flagship loan guarantee program is the “7(a),” which is named after the
section of the Small Business Act that authorizes it.1 The maximum amount of the loan
is $2.0 million, of which the SBA guarantees $1.5 million.
In the “504” loan program, geographically-based Community Development
Corporations (CDCs) make loans for major fixed assets. The business contributes 10%
of the asset’s cost. A private lender loans up to 50% of the cost and has a senior lien on
the asset. The local CDC lends up to 40% backed by the SBA’s guarantee, which is in
the form of a debenture for a maximum of $1.5 million for job creation criteria loans, a
maximum of $2.0 million for public policy criteria loans, and $4.0 million for small
manufacturers.
The SBA also supports microloans (loans of $35,000 or less) through grants to
nonprofits. The SBA is not accepting new nonprofits into any of its grant programs at this
time.
The SBA does not make grants (which do not have to be repaid) to small businesses,
but it does make some grants to nonprofits that in turn provide advice to small businesses.
Technical Support. Technical support for small businesses is advice in all
aspects of starting and managing a small business to entrepreneurs. The SBA provides
technical support by grants to nonprofit groups such as the Service Corps of Retired
Executives (SCORE), Small Business Development Centers (SBDCs), and the Small
Business Training Network. These grants typically cover 50% of the nonprofit’s
operating costs.
Targeted Programs
Loans. The only SBA loan programs restricted to members of targeted groups are
those targeted to veterans and reservists. The SBA has some loan programs for special
reasons for borrowing such as exports.
The SBA announced the Patriot Express Pilot Loan Initiative in 2007. Under the
program, the SBA expedites its decision on guaranteeing private sector loans to veterans,
service-disabled veterans, reservists (including National Guard members), active duty
service members eligible for transition assistance, and spouses and widows of those in
these groups. The maximum amount of the loans is $500,000.
Military Reservist Economic Injury Disaster Loans from the SBA are available to
small businesses when an essential employee, including an owner, is called up to active
duty during a period of conflict. The loan is designed to help cover cash flow reductions
caused by the military call up to active duty to a maximum of $1.5 million. There are
additional restrictions.
Technical Support. SBA officials have testified that technical support
requirements do not vary greatly among those looking to start or grow small businesses.
1 P.L. 85-536 as amended, 72 Stat. 384.

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Nevertheless, the SBA has programs targeted to women, members of economically and
socially disadvantaged groups, and veterans.
Women. The SBA has Women’s Business Centers (WBCs) in each state. The
WBCs provide women with help in all areas of business: finance, marketing,
management, production, human resources, etc. The SBA provides grants to cover some
of the WBCs’ costs.
Each of the SBA’s district offices has a women’s business ownership representative
to provide women with assistance.
Economically and Socially Disadvantaged. A technical support program
targeted for economically and socially disadvantaged groups is the Native American
Outreach, which provides technical support for American Indians, Alaskan Natives,
Native Hawaiians, tribally owned small businesses and businesses located in Native
American communities.
Veterans. The SBA provides specialized business development support of
veterans, reservists, and National Guard members. It does this through five Veterans
Business Outreach Centers. Help includes pre-business plan workshops, concept
assessments, business plan assistance, training, and mentoring. Veterans business
development officers are located in each state and provide similar assistance.
In addition, the National Veterans Business Development Corporation
(VeteransCorp) provides business advice to veterans. VeteransCorp is a federally
chartered nonprofit originally funded by the SBA, Department of Defense, and the
Department of Veterans Affairs. The heads of these three agencies are ex officio
members of the board of directors. VeteransCorp is currently funded by a direct
appropriation, but the Administration has requested no money for the corporation in
FY2008.
Government Contracting. The SBA coordinates the federal government’s
efforts to encourage federal agencies to contract with members of specific groups for
goods and services; it negotiates with government agencies to meet government-wide
contracting goals:
! 23% of prime contracts (measured in dollars) for small businesses,
! 5% of prime and subcontracts for small disadvantaged businesses,
! 5% of prime and subcontracts for women-owned small businesses,
! 3% of prime and subcontracts for HUBZone (Historically Under Utilized
Business Zone) businesses, and
! 3% of prime and subcontracts for service-disabled veteran-owned small
businesses.
The goals are not mandatory, and some agencies have higher individual goals while other
agencies have lower goals.
The “8(a)” business development contracting is the main program by which
economically and socially disadvantaged businesses compete for government contracts.
Federal agencies are allowed to restrict competition on certain contracts to firms that have

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SBA 8(a) certifications. The 8(a) program includes technical support and mentoring
programs. SBA also has a small disadvantaged business (SDB) designation that provides
technical support. All 8(a) firms are SDBs, but not all SBDs are 8(a)s.
The HUBZone program encourages government agencies to award contracts to
businesses located in areas that meet certain specific criteria concerning high
unemployment rates or high housing costs as defined by the HUBZone Act of 1997.2 In
addition, at least 35% of the small business’ employees must live in a HUBZone.
HUBZone firms can compete for government contracts limited to HUBZone firms and
receive a 10% price adjustment in competitive contracts. In some circumstances,
HUBZone firms can be awarded sole-source contracts.
Other Federal Sources of Assistance
Other organizations within the federal government that provide support of various
types for economically and socially disadvantaged, and small businesses. The following
list is not exhaustive.
! Every federal agency with contracting authority has an Office of Small
and Disadvantaged Business Utilization (OSDBU) to encourage their
agencies to use small businesses in prime contracts and subcontracts.
! The Department of Transportation sponsors a Disadvantaged Business
Enterprise (DBE) program to comply with legislation passed in 1983
requiring that 10% of all federal highway and transit funds be expended
with DBEs.3 A similar program applies to airport funding.4
! The Minority Business Development Agency, housed in the Department
of Commerce, is the only federal agency encouraging the growth of
minority-owned business regardless of small business status.
! Other government agencies maintain programs targeted at members of
specific racial or ethnic groups. For example, the Department of the
Interior has programs giving preference for work on Indian reservations
to tribal members.
Additional Information
For information on the legal basis of targeted procurement programs, see CRS
Report RL33284, Minority Contracting and Affirmative Action for Disadvantaged Small
Businesses: Legal Issues, by Jody Feder.
2 P.L. 106-554, 114 Stat. 2763
3 P.L. 97-424, 96 Stat. 2097.
4 P.L. 100-223, 101 Stat. 1486.

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