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Small Business Administration:
A Primer on Programs

Oscar R. Gonzales
Analyst in Economic Development Policy
June 22, 2011
Congressional Research Service
7-5700
www.crs.gov
RL33243
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008

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Small Business Administration: A Primer on Programs

Summary
The Small Business Administration (SBA) administers several programs to support small
businesses, including loan guarantee programs to enhance small business access to capital;
contracting programs to increase small business opportunities in federal contracting; direct loan
programs for businesses, homeowners, and renters to assist their recovery from natural disasters;
and small business management and technical assistance training programs to assist business
formation and expansion.
Congressional interest in the SBA’s loan and contracting programs has increased in recent years,
primarily because small businesses are viewed as a means to stimulate economic activity, create
jobs, and assist in the national economic recovery. Many Members of Congress also regularly
receive constituent inquiries about SBA loans, the loan guarantee programs, and special
contracting programs and this report provides an overview of these programs. In addition, after
the enactment of the Small Business Additional Temporary Extension Act of 2011 (P.L. 112-17),
the SBA’s authorization is scheduled to expire on July 31, 2011.
This report is designed to assist Congress in the event that it considers the reauthorization of the
SBA by providing a summary and analysis of the SBA’s major programs, including changes made
by the American Recovery and Reinvestment Act (P.L. 111-5) and the Small Business Jobs Act of
2010 (P.L. 111-240), and by referencing other CRS reports which examine these programs in
greater detail.
This report will be updated to reflect legislative action and programmatic changes.


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Contents
Introduction ................................................................................................................................ 1
SBA Disaster Loans .................................................................... Error! Bookmark not defined.
Overview .............................................................................. Error! Bookmark not defined.
Types of Disaster Loans ........................................................ Error! Bookmark not defined.
Disaster Loans to Individuals and Homeowners .............. Error! Bookmark not defined.
Disaster Loans to Businesses and Nonprofits................... Error! Bookmark not defined.
SBA Small Business Financial Programs..................................... Error! Bookmark not defined.
Overview .............................................................................. Error! Bookmark not defined.
What Is a Business? ........................................................ Error! Bookmark not defined.
What is Small?................................................................ Error! Bookmark not defined.
Loan Guarantees ................................................................... Error! Bookmark not defined.
Overview ........................................................................ Error! Bookmark not defined.
SBA Lender Programs........................................................... Error! Bookmark not defined.
Certified Lenders Program .............................................. Error! Bookmark not defined.
Preferred Lenders Program.............................................. Error! Bookmark not defined.
SBA Special Contracting Programs ....................................... Error! Bookmark not defined.
8(a) ................................................................................. Error! Bookmark not defined.
Small Disadvantaged Businesses ..................................... Error! Bookmark not defined.
Historically Underutilized Business Zones ...................... Error! Bookmark not defined.
Service-Disabled Veterans............................................... Error! Bookmark not defined.
Office of Small and Disadvantaged Business Utilization . Error! Bookmark not defined.
Capital Access Programs ....................................................... Error! Bookmark not defined.
Overview ........................................................................ Error! Bookmark not defined.
Surety Bonds .................................................................. Error! Bookmark not defined.
Small Business Innovation Research Awards ................... Error! Bookmark not defined.
Small Business Technology Transfer Awards ................... Error! Bookmark not defined.
Small Business Investment Company (SBIC) Loan Guarantee ProgramError! Bookmark not defined.
New Market Venture Capital ........................................... Error! Bookmark not defined.
Entrepreneurial Development ................................................ Error! Bookmark not defined.
Advocacy and Other.................................................................... Error! Bookmark not defined.
SBA’s Office of Advocacy..................................................... Error! Bookmark not defined.
Legislative Activity..................................................................... Error! Bookmark not defined.
ARRA................................................................................... Error! Bookmark not defined.
Small Business Jobs Act of 2010 ........................................... Error! Bookmark not defined.
Discontinued Programs ......................................................... Error! Bookmark not defined.
Funding and Appropriations ........................................................ Error! Bookmark not defined.

Figures
Figure 1. Major SBA Program Areas, FY2010............................. Error! Bookmark not defined.

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Small Business Administration: A Primer on Programs

Tables
Table 1. Summary of Key Features for 7(a) Loan Guarantee ProgramError! Bookmark not defined.
Table 2. Summary of Key Features for 504/CDC Loan Program.. Error! Bookmark not defined.
Table 3. Selected Provisions, the Small Business Jobs Act of 2010Error! Bookmark not defined.

Contacts
Author Contact Information ...................................................................................................... 20

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Small Business Administration: A Primer on Programs

Introduction
The Small Business Administration (SBA) administers several programs to support small
businesses, including loan guarantee programs to enhance small business access to capital;
contracting programs to increase small business opportunities in federal contracting; direct loan
programs for businesses, homeowners, and renters to assist their recovery from natural disasters;
and small business management and technical assistance training programs to assist business
formation and expansion.
Congressional interest in the SBA’s loan and contracting programs has increased in recent years,
primarily because small businesses are viewed as a means to stimulate economic activity, create
jobs, and assist in the national economic recovery. Many Members of Congress also regularly
receive constituent inquiries about SBA loans, the loan guarantee programs, and special
contracting programs and this report provides an overview of these programs. In addition, after
the enactment of the Small Business Additional Temporary Extension Act of 2011 (P.L. 112-17),
the SBA’s authorization is scheduled to expire on July 31, 2011.
This report is designed to assist Congress in the event that it considers the reauthorization of the
SBA by providing a summary and analysis of the SBA’s major programs, including changes made
by the American Recovery and Reinvestment Act (P.L. 111-5) and the Small Business Jobs Act of
2010 (P.L. 111-240), and by referencing other CRS reports which examine these programs in
greater detail.
The SBA’s programs have detailed rules on program requirements and administration that are not
covered in this report. Detailed information is available on the SBA’s website, 15 U.S.C. 631 et
seq., and in Title 13 of the Code of Federal Regulations.1
The Small Business Act states that continued free competition is “the essence of the American
economic system.”2 It declares that it is the policy of Congress to ensure that a fair proportion of
government contracts are awarded to small businesses and to support small businesses with
financing, export support, and other means. Moreover, the act charges the SBA with representing
small business interests in interactions with other government agencies.
The SBA also has programs to assist small businesses owned by women, service-disabled
veterans, and the socially and economically disadvantaged. These programs provide participants
training and reduced competition for government contracts.
SBA’s origins can be traced to the Great Depression of the 1930s and World War II when
concerns about unemployment and war production were paramount. The SBA replaced the
Reconstruction Finance Corporation (RFC), which was created by the federal government in
1932 to provide funding for businesses of all sizes during the Depression and later financed war
production. During the early 1950s the RFC was disbanded amidst charges of political favoritism
in granting loans. In 1953, Congress passed the Small Business Act (P.L. 83-163) that created the
SBA. The SBA has undergone many changes since 1953. One key change is that it no longer
makes direct loans to businesses or individuals except for disaster loans.

1 See http://www.sba.gov.
2 P.L. 85-536, as amended.
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As a general principle and following its statutory mandate, the SBA is willing to accept a higher
level of default risk than other lenders will (through its loan guarantees), but there is a limit to the
amount of risk it is willing to accept. Although the SBA does not make direct loans (except in the
case of disasters), it may be responsible for covering up to 90% of loan guarantees in case of loan
defaults. To manage risk, it seeks collateral and examines the borrower’s ability to repay a loan.
For example, loans and loan guarantees of more than $10,000 usually require collateral. Personal
guarantees are required if the collateral is considered insufficient by the lender or the SBA. In
short, these are loans that must be repaid, not grants that are not repaid.
The SBA’s FY2012 budget justification includes funding for the following programs and offices:
1. disaster loan program;
2. business loan guarantee programs (7(a) program, 504 Certified Development
Company program, microloans and Small Business Investment Company loans);
3. government contracting and business development programs (some of which are
limited to businesses owned by socially and economically disadvantaged
groups);
4. capital access programs (international trade programs, new market venture
capital programs, and surety bond programs);
5. entrepreneurial development programs (including Women’s Business Ownership,
and Small Business Development Centers);
6. SBA Office of the Inspector General (OIG);
7. executive direction programs (advocacy, National Women’s Business Council,
Ombudsman, and veteran’s business development); and
8. a residual category, including regional and district office programs, and
congressional grants.
Figure 1 shows the SBA’s budget classified into these previously mentioned programs and
offices.
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Small Business Administration: A Primer on Programs

Figure 1. Major SBA Program Areas, Cost by Program, FY2010
($ millions)
Capital Access,
Business Loan
$14.2
Inspector
Other, $73.2
Guarantees,
General, $25.3
$189.3
Disaster
Government
Assistance,
Contracting and
$248.7
Business
Development,
$111.7
Executive
Entrepreneurial
Direction, $18.4
Development,
$182.2

Source: U.S. Small Business Administration, FY2012 Congressional Budget Justification, Washington, DC, 2011, pp.
24-25.
Note: The SBA spent $863.0 million in FY2010. FY2011 data is not currently available and the SBA is required
to provide a spending plan to Congress, pursuant to P.L. 112-10.
SBA Disaster Loans
Overview3
Disaster loans are available to individuals, small businesses, and non-profits in declared disaster
areas. These loans are the only instances where the SBA makes loans to the ultimate borrower
instead of guaranteeing loans that others make or supporting nonprofit lenders with loans.4
SBA disaster loans are some of the agency’s best-known programs and the only ones that are not
limited to small businesses.5 The disaster loan programs have been the subject of regular
congressional and media attention because of complaints about slow processing of loan

3 For additional information, see CRS Report R41309, The SBA Disaster Loan Program: Overview and Possible Issues
for Congress
, by Bruce R. Lindsay.
4 13 C.F.R. § 123.105 and 13 § 123.203.
5 13 C.F.R. § 123.
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applications. The SBA does not view these programs as immediate assistance, but the public is
frequently looking for a rapid response.
Types of Disaster Loans
The SBA Disaster Loan Program includes the following categories of loans for disaster-related
losses: Personal Property Loans, Real Property Disaster Loans, Physical Disaster Loans, and
Economic Injury Disaster Loans (EIDL). An estimated 80% of SBA disaster assistance is made
available to individuals and households rather than businesses. SBA disaster assistance is
provided in the form of loans, not grants, and therefore must be repaid to the federal government.
Homeowners, renters, and personal property owners located in a declared disaster area (and in
contiguous counties) may apply to SBA for loans to help recover losses from the disaster. Only
victims located in a declared disaster area (and contiguous counties) are eligible to apply for
disaster loans. Disaster declarations are “official notices recognizing that specific geographic
areas have been damaged by floods and other acts of nature, riots, civil disorders, or industrial
accidents such as oil spills.”6 Five categories of declarations put the SBA Disaster Loan Program
into effect. These include two types of presidential major disaster declarations as authorized by
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act),7 and
three types of SBA declarations.8
SBA’s Individual and Homeowner Disaster Loan Program falls into two categories: personal
property loans and real property loans. These loans cover only uninsured or underinsured
property and primary residences. Loan maturities may be up to 30 years. Disaster loans to
businesses and non-profits are also discussed below.
Disaster Loans to Individuals and Homeowners
Individuals can obtain loans for both personal property such as cars and furniture, and to repair
homes destroyed. Loans are limited to uninsured losses. The maximum term for SBA disaster
loans is 30 years but the law restricts businesses with credit available elsewhere to a maximum
three-year term. The SBA sets the installment payment amount and corresponding maturity based
upon each borrower’s ability to repay.
Personal Property Loans
A personal property loan provides a creditworthy homeowner or renter with up to $40,000 to
repair or replace personal property items such as furniture, clothing, or automobiles damaged or
lost in a disaster. These loans cover only uninsured or underinsured property and primary
residences and cannot be used to replace extraordinarily expensive or irreplaceable items such as
antiques or recreational vehicles. Interest rates vary depending on whether applicants are able or
unable to obtain credit elsewhere. For applicants who can obtain credit without SBA assistance,

6 13 C.F.R. § 123.2.
7 P.L. 93-288, 42 U.S.C. 5721 et seq.
8 Disaster declarations are published in the Federal Register and can also be found on the SBA website at
http://www.sba.gov/services/disasterassistance/basics/recentdisaster/SERV_RECENT_WV_11750.html.
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the interest rate may not be more than 8% per year. For applicants who cannot obtain credit
without SBA assistance, the interest rate may not be more than 4% per year.9
Real Property Loans
A creditworthy homeowner may apply for a “real property loan” of up to $200,000 to repair or
restore the homeowner’s primary residence to its pre-disaster condition.10 The loans may not be
used to upgrade homes or build additions, unless upgrades or changes are required by city or
county building codes. A real property loan may be increased by 20% for repairs to protect the
damaged property from a similar disaster in the future. The interest rate for real property loans is
determined in the same way as it is determined for personal property loans.
Disaster Loans to Businesses and Nonprofits
There are several types of loans, discussed below, available to businesses and nonprofits located
in counties covered by a presidential disaster declaration. In certain circumstances, the SBA will
also make these loans available when a governor, the Secretary of Agriculture, or the Secretary of
Commerce makes a disaster declaration. Physical disaster loans are available to almost any
nonprofit or business. The other business disaster loans are limited to small businesses.
Physical Disaster Loan
Any business or nonprofit, regardless of size, can apply for a physical disaster business loan of up
to $2 million for repairs and replacements to real property, machinery, equipment, fixtures,
inventory, and leasehold improvements that are not covered by insurance. Nonprofits that are
rejected or are approved by the SBA for less than the requested amount for a physical disaster
loan are in some circumstances eligible for grants from the Federal Emergency Management
Agency (FEMA). Interest rates for Business Physical Disaster Loans for businesses must be no
lower than 4% and no higher than 8%.11
Economic Injury Disaster Loans
Economic Injury Disaster Loans (EIDL) are limited to small businesses. If the Secretary of
Agriculture designates an agriculture production disaster, small farms and small cooperatives are
eligible. EIDLs are available in the counties included in a presidential disaster declaration and
contiguous counties. The loans are designed to provide small businesses with operating funds
until the business recovers. The maximum loan is $2 million and the terms are the same as
personal and physical disaster business loans. The loan can have a maturity of up to 30 years and
has an interest rate of 4% or less.12

9 13 C.F.R. § 123.105(a)(1).
10 13 C.F.R. § 123.105(a)(2).
11 13 C.F.R. § 123.203.
12 13 C.F.R. § 123.302.
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SBA Small Business Financial Programs
Overview13
The SBA has four types of programs to directly support small businesses that are not disaster-
related. The first are loan guarantees in which the SBA guarantees loans to small businesses that
the private sector would otherwise be unwilling to make.
The second are contracting programs for small businesses that can involve sole source, limited
competition, and cost advantages in government contract competitions. Sometimes the use of
small business subcontractors is an evaluation factor for the prime contractor. When a
government agency is planning a procurement, it chooses between one of these vehicles, and one
in which there are no special advantages for small businesses.
The third are “capital access” programs that indirectly provide equity funding for small
businesses and improve access to capital markets through SBA guarantees.
The fourth are entrepreneurial development programs to provide training to small business
owners mostly using volunteers and nonprofits.
With few exceptions, to qualify for SBA assistance, an organization must be both a business and
small.14
What Is a Business?
To participate in any of the SBA programs, a business must meet the SBA’s definition of “small
business.” This is a business that
• is organized for profit;
• has a place of business in the United States;
• operates primarily within the United States or makes a significant contribution to
the U.S. economy through payment of taxes or use of American products,
materials or labor;
• is independently owned and operated; and
• is not dominant in its field on a national basis.15
The business may be a sole proprietorship, partnership, corporation, or any other legal form.

13 For additional information, see CRS Report R40860, Defining Small Business: A Historical Analysis of
Contemporary Issues
, by Robert Jay Dilger.
14 The SBA provides financial assistance to non-profit organizations to provide training to small business owners, and
to provide loans to small businesses through the SBA Microloan program. Also, non-profit childcare centers are
eligible to participate in SBA’s Microloan program.
15 13 C.F.R. § 121.105.
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What Is Small?
The SBA uses two measures to determine if a business is small: SBA-derived industry specific
size standards or a combination of the business’s net worth and net income. For example,
businesses participating in the SBA’s 7(a) loan guarantee program, including its express
programs, are deemed small if they meet the SBA’s industry-specific size standards for firms in
1,159 industrial classifications described in the North American Industry Classification System
(NAICS) or if they do not have more than $15 million in tangible net worth and not more than $5
million in average net income after federal taxes (excluding any carry-over losses) for the two full
fiscal years before the date of the application. All of the company’s subsidiaries, parent
companies, and affiliates are considered in determining if it meets the size standard.16
The SBA’s industry size standards vary by industry, are designed to encourage competition within
the industry, and are based on one of the following four measures: the firm’s (1) average annual
receipts in the previous three years, (2) number of employees, (3) asset size, or (4) for electrical
power industries, the extent of its power generation. Historically, the SBA has used the number of
employees to determine if manufacturing and mining companies are small and average annual
revenue for most other industries.
As a starting point, the SBA presumes $7.0 million as an appropriate size standard for the
services, retail trade, construction, and other industries with receipts based size standards; 500
employees for the manufacturing, mining, and other industries with employee-based size
standards; and 100 employees for the wholesale trade industries. These three levels, referred to as
“anchor size standards,” are used by the SBA as benchmarks or starting points when establishing
its size standards. To the extent an industry displays “differing industry characteristics” necessary
to enable small businesses to compete successfully with larger businesses within that industry, the
SBA will consider a size standard higher, or in some cases lower, than an anchor size standard.17
Overall, more than 99.7% of all businesses are considered small by the SBA.18 These firms
account for approximately half of the nation’s gross domestic product, half of the nation’s total
employment, and 44% of the nation’s private sector payroll.19
Loan Guarantees
Overview
The SBA provides loan guarantees for small businesses that cannot obtain commercial loans. The
SBA requires personal guarantees from owners and shares the risk of default with the lender by

16 13 C.F.R. § 121.201; and P.L. 111-240, the Small Business Act of 2010, Sec. 1116. Alternative Size Standards.
17 U.S. Small Business Administration, Office of Government Contracting and Business Development, “SBA Size
Standards Methodology,” Washington, DC, April 2009, pp. 1-8, http://www.sba.gov/idc/groups/public/documents/
sba_homepage/size_standards_methodology.pdf.
18 U.S. Small Business Administration, “Table of Small Business Size Standards Matched to North American Industry
Classification System Codes,” Washington, DC, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
serv_sstd_tablepdf.pdf; and U.S. Small Business Administration, “Fiscal Year 2010 Congressional Budget
Justification,” Washington, DC, 2009, p. 75, http://www.sba.gov/idc/groups/public/documents/sba_homepage/
serv_budget_2010_justification.pdf.
19 U.S. Census Bureau, Statistics of U.S. Businesses: 2007, Washington, DC, http://www.census.gov/econ/susb/.
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making the guarantee less than 100%. In the event of a default the borrower still owes the amount
contracted less the value of any collateral liquidated. The SBA can attempt to recover the unpaid
debt through administrative offset, salary offset, or IRS tax refund offset. Most types of business
are eligible for loan guarantees, but a few are not. These excluded business lines include real
estate investment firms, financial speculation and intermediaries, pyramid sales, illegal activities,
and gambling.20 With one exception, nonprofit and charitable organizations are also ineligible.21
Prepayment
The SBA charges a prepayment penalty on loans applied for on or after December 22, 2000. This
is a “subsidy recoupment fee” and applies only to loans of 15 or more years when the borrower
makes the repayment in the first three years after the first loan disbursement, and when the
repayment is more than 25% of the loan amount. The fee is 5% of the prepayment in the first
year, 3% in the second, and 1% in the third year.22
Fees
The SBA collects fees from lenders to help offset the costs of loan defaults and for administering
its loan guarantee programs. Since 2005, the SBA has set these fees with the goal of achieving a
zero subsidy rate, meaning that the loan guarantee program does not require annual
appropriations of budget authority for new loan guaranties. For example, for 7(a) loans with a
maturity exceeding 12 months the SBA charges the lender a 2% guarantee fee for the SBA
guaranteed portion of loans of $150,000 or less, a 3% guarantee fee for the SBA guaranteed
portion of loans exceeding $150,000 but not more than $700,000, and a 3.5% guarantee fee for
the SBA guaranteed portion of loans exceeding $700,000. 7(a) loans with an SBA guaranteed
portion in excess of $1 million are charged an additional 0.25% guarantee fee on the guaranteed
amount in excess of $1 million. These loans are also subject to an ongoing servicing fee of 0.55%
of the outstanding balance of the guaranteed portion of the loan.23 Lenders are also authorized to
collect fees from borrowers to offset their administrative expenses.
In 2009 and 2010, Congress provided $963 million to temporarily eliminate some of the SBA’s
fees. For example, the Small Business Jobs Act of 2010 (P.L. 111-240) provided $510 million to
subsidize fees in the SBA’s 7(a) and 504/CDC loan guarantee programs from its date of
enactment (September 27, 2010) through December 31, 2010.
Maturity
SBA-guaranteed loans generally have longer terms to maturity than other business loans. The
maximum loan term is 25 years for real estate. For fixed capital equipment, the maximum term is
the lesser of 25 years or the life of equipment financed. For working capital it is seven years.
There are some exceptions. For example, if a borrower is likely to be unable to repay a working

20 A list of ineligible businesses, such as non-profit businesses, insurance companies, and businesses deriving more
than one-third of gross annual revenue from legal gambling activities, is contained in 13 C.F.R. § 120.110.
21 P.L. 105-135, the Small Business Reauthorization Act of 1997, expanded the SBA’s Microloan program’s eligibility
to include borrowers establishing a nonprofit childcare business.
22 13 C.F.R. § 120.223.
23 15 U.S.C. 636(a)(23)(a).
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capital loan in seven years, the SBA can allow a longer term, such as 10 years, if that makes the
loan viable.
Use of Proceeds
The SBA will guarantee loans for most business purposes. Exceptions to this are refinancing
existing debt where the lender is in a position to absorb a loss, and the SBA would be responsible
for the loss because of the refinancing; financing a partial change in ownership; paying funds
owed to the owner; paying delinquent taxes that should have been escrowed; and non-business
purposes. The SBA will guarantee loans to farms, but it recommends that the borrower contact
the Farm Service Agency first.
Other Sources
The SBA requires borrowers to demonstrate a need for the desired credit and requires lenders to
certify that the desired credit is unavailable to the borrower on reasonable terms and conditions
from non-federal sources without the SBA’s assistance.24 If a portion of the entire loan amount is
not available without an SBA guarantee, the SBA may guarantee that portion.
7(a)25
The main SBA guarantee program is the 7(a) loan guarantee, which is named after the section of
the Small Business Act that authorizes it. These are loans made by SBA partners (mostly banks,
but also some other financial institutions) and partially guaranteed by the SBA. Despite the offer
from the SBA to guarantee a loan, a lender does not have to make it. The SBA has created
variations on the 7(a) program for special purposes. It has also created expedited processing with
selected lending partners called certified lenders and preferred lenders. Table 1 provides the
information on the maximum loan amount, maturity, maximum interest rates, and guarantee fees
for the 7(a) program.

24 13 C.F.R. § 120.100; 13 C.F.R. § 120.101; and 13 C.F.R. § 120.102.
25 For additional information, see CRS Report R41146, Small Business Administration 7(a) Loan Guaranty Program,
by Robert Jay Dilger.
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Table 1. Summary of Key Features for 7(a) Loan Guarantee Program
Reflects changes made by the Small Business Jobs Act of 2010 (P.L. 111-240)

7(a) Loan Guarantee
Purpose
Fixed assets, working capital, financing of start-ups or to purchase an existing business; some debt
payment al owed, but lender’s loan exposure may not be reduced with the Express products. Lines
of credit are offered with the Express programs.
Maximum
$5 million.
Loan Amount
Maturity
5 to 7 years for working capital, up to 25 years for equipment & real estate. Al other loan purposes
would have a maximum term of 10 years.
Maximum
Base rate plus 2-1/4% for maturities under 7 years. Base rate plus 2-3/4% for maturities of 7 years or
Interest Rates longer. Loans of $50,000 or less may add an additional 1% and loans under $25,000 may add an
additional 2%.
Guarantee
A fee of 0.25% of the guaranteed portion of the loan is charged for loans with maturities of 12
Fees
months or less. For loans with maturities over 12 months, the fees are 2% for loans of $150,000 or
less; 3% for loans of $150,001 to $700,000; 3.5% for loans over $700,000; and 3.5% for the guaranty
portion over $1 million. There is an on-going fee of 0.55%.
Job Creation
No job creation requirements.
Source: Table compiled by CRS from data from the Small Business Administration.
Note: In 2009 and 2010, Congress provided $963 million to temporarily eliminate some of the SBA’s fees. For
example, the Small Business Jobs Act of 2010 (P.L. 111-240) provided $510 million to subsidize fees in the SBA’s
7(a) and 504/CDC loan guarantee programs from its date of enactment (September 27, 2010) through
December 31, 2010.
Variable-rate loans can be pegged to either the prime rate or the SBA optional peg rate, which is a
weighted average of rates that the federal government pays for loans with maturities similar to the
guaranteed loan. The spread over the prime rate or SBA optional peg rate is negotiable between
the borrower and the lender, but no more than 6%. The adjustment period can be no more than
monthly and cannot change over the life of the loan.
Variations on the 7(a) Program
The 7(a) program has four specialized programs that offer streamlined and expedited loan
procedures for particular groups of borrowers, the SBAExpress program, the Small Loan
Advantage Program, Community Advantage Program, and the Patriot Express Program. Lenders
must be approved by the SBA for participation in these programs. For example, the SBAExpress
program was established as a pilot program by the SBA on February 27, 1995, and made
permanent through legislation, subject to reauthorization, in 2004 (P.L. 108-447, the Consolidated
Appropriations Act, 2005). The program is designed to increase the availability of credit to small
businesses by permitting lenders to use their existing documentation and procedures in return for
receiving a reduced SBA guarantee on loans. It provides a 50% loan guarantee on loan amounts
up to $350,000. However, the Small Business Jobs Act of 2010 (P.L. 111-240) temporarily
increased the program’s loan limit to $1 million for one year following enactment (until
September 27, 2011). The loan proceeds can be used for the same purposes as the 7(a) program
except participant debt restructuring cannot exceed 50% of the project and may be used for
revolving credit. The loan terms are the same as the 7(a) program, except that the term for a
revolving line of credit cannot exceed seven years.
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The 504/CDC Loan Guarantee Program26
The 504/CDC loan guarantee program uses Certified Development Companies (CDCs), which
are private, nonprofit corporations established to contribute to economic development within its
communities. Each CDC has its own geographic territory. The program provides long-term,
fixed-rate loans for major fixed assets such as land, structures, machinery, and equipment.
Program loans cannot be used for working capital, inventory, repaying debt, or refinancing. A
commercial lender provides up to 50% of the financing package, which is secured by a senior
lien. The CDC’s loan of up to 40% is secured by a junior lien. The SBA backs the CDC with a
guaranteed debenture.27 The small business must contribute at least 10% as equity. Table 2 below
summarizes key features of the 504 CDC loan program.
Table 2. Summary of Key Features for 504/CDC Loan Program
Reflects changes made by the Small Business Jobs Act of 2010 (P.L. 111-240)

504 Certified Development Company Loan Program
Purpose
Fixed assets only - no working capital.
Maximum Loan
Maximum CDC/504 participation in a single project is $5 million, and $5.5 million for
Amount
manufacturers; minimum is $50,000. There is no limit on the project size.
Maturity
10 years for equipment; 20 years for real estate.
Maximum
Based on current market rate for 5 and 10 year Treasury Bonds.
Interest Rates
Participation
504/CDC projects general y have three main participants: a third-party lender provides 50% or
Requirements
more of the financing; a CDC provides between 30% to 40% of the financing through a 504/CDC
debenture, which is guaranteed 100% by the SBA; and the borrower contributes at least 10% of
the financing. No more than 50% of eligible costs can be from federal sources.
Guarantee Fees
There is a 0.5% fee on the lender’s share, plus the CDC may charge up to 1.5% on their share.
CDC charges a monthly servicing fee of 0.625% to 1.5% on the unpaid balance. There is an on-
going guaranty fee of 0.749% of the principal outstanding.
Job Creation
Must intend to create or retain one job for every $65,000 of the debenture ($100,000 for smal
Requirements
manufacturers) or meet an alternative job creation standard if it meets any one of 14 Community
or Public Policy Goals. A minimum down payment of 10% is required.
Source: Table compiled by CRS from data from the Small Business Administration.
Notes: The maximum loan amount is the total financial package including the commercial loan and the CDC
loan. It does not include the owner’s minimum 10% equity contribution. It assumes that the CDC loan is 40% of
the total package.
Special Purpose Loan Guarantees
In addition to the general 7(a)-based loan guarantee programs, the SBA has special purpose loan
guarantee programs for exports, adjusting to the North American Free Trade Agreement
(NAFTA), Employee Stock Ownership Program trusts, pollution controls, and working capital.

26 For further analysis see CRS Report R41184, Small Business Administration 504/CDC Loan Guaranty Program, by
Robert Jay Dilger.
27 A debenture is a bond that is not secured by a lien on specific collateral.
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Export Working Capital Loans. Export Working Capital Loans are a joint program between the
SBA and the Export-Import Bank.
Export Express. The SBA’s Export Express program guarantees loans for exporters to finance
business development activities such as participating in foreign trade shows, translating
brochures, and improving facilities.
International Trade Loans. International Trade Loans are available to small businesses that are
exporting goods and services, those that are planning to become exporters, and those adversely
affected by imports. Loan and guarantee maximums are the same as for the regular 7(a) loan
guarantee program, but under special circumstances the maximum guaranteed amount can be
increased.
Community Adjustment and Investment Program. The Community Adjustment and Investment
Program (CAIP) uses federal funds to pay the fees on 7(a) and 504 loans to businesses located in
communities that have been adversely affected by NAFTA.
Employee Trusts. The SBA will guarantee loans to Employee Stock Ownership Plans (ESOPs)
that are used either to lend money to the employer or to purchase control from the owner. ESOPs
must meet regulations established by the IRS, Department of the Treasury, and Department of
Labor. These are 7(a) loans.
Pollution Control. The SBA has a special 7(a) program for small businesses to purchase pollution
control equipment.
CAPLines. CAPLines are five special 7(a) programs designed to meet the requirements of small
businesses for short-term or cyclical working capital. The maximum term is five years.
SBA Lender Programs
The SBA has programs for experienced 7(a) lenders that provide faster processing to borrowers.
Speed is achieved because the SBA lets the lender do more of the work with less SBA review.
The programs allow the SBA to guarantee more loans with fewer employees.
Certified Lenders Program
In the certified lenders program (CLP), the SBA’s goal is to reach a decision on the guarantee
within three business days. A certified lender can review an application for an SBA-guaranteed
loan and process much, but not all, of the paperwork. The SBA does a credit and eligibility
review instead of a complete verification of the data.
Preferred Lenders Program
In the preferred lenders program (PLP), the SBA delegates loan approval, closing, and most
servicing and liquidation authority and responsibility to these selected lenders. The SBA
continues to check loan eligibility. Since the SBA does not review individual loan applications,
borrowers can receive funding in a matter of days.
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Small Business Contracting Programs28
A number of programs assist small businesses in obtaining and performing federal contracts and
subcontracts. These include various prime contracting programs; subcontracting programs; and
other assistance (e.g., goaling program, Offices of Small and Disadvantaged Business
Utilization).
Prime Contracting Programs
There are several special programs that allow small businesses to compete only with similar firms
for government contracts, or receive sole-source awards in circumstances when such awards
could not be made to other firms. These programs, which give small businesses a chance to win
government contracts without having to compete against larger and more experienced companies,
include the following:
8(a) Program: The 8(a) Program (named for the section of the Small Business
Act from which it derives its authority) is for businesses owned by persons who
are socially and economically disadvantaged.29 A firm that is certified by SBA as
an 8(a) firm is eligible for set-aside and sole-source contracts. The SBA also
provides technical assistance and training to 8(a) firms. Firms may participate in
the 8(a) Program for no more than nine years.30 As of December 2010, there were
9,154 firms with active certifications in the 8(a) program.31
Historically Underutilized Business Zone Program:32 This program assists
small businesses located in Historically Underutilized Business Zones
(HUBZones) through set-asides, sole source awards, and price evaluation
preferences in full and open competitions.33 The determination of whether or not
an area is a HUBZone is based on criteria specified in 13 C.F.R. § 126.103. To be
certified as a HUBZone small business, at least 35% of the small business’s
employees must generally reside in a HUBZone. As of December 2010, there
were 9,458 firms with active HUBZone certifications.34
Service-Disabled Veteran-Owned Small Business Program: This program
assists service-disabled veteran-owned small businesses through set-asides and

28 These programs apply government-wide, but are implemented under the authority of the Small Business Act
pursuant to regulations promulgated by the SBA that determine, in part, eligibility for the programs.
29 Section 8(a) of the Small Business Act, P.L. 85-536, as amended, can be found at 15 U.S.C 637(a). Regulations are
in 13 C.F.R. 124. For recent legal developments, see CRS Report R40987, “Disadvantaged” Small Businesses:
Definitions and Designations for Purposes of Federal and Federally Funded Contracting Programs
, by Kate M.
Manuel, and CRS Report RL33284, Minority Contracting and Affirmative Action for Disadvantaged Small Businesses:
Legal Issues
, by Jody Feder.
30 See http://www.sba.gov/8abd/indexfaqs.html.
31 Source: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
32 For additional information, see CRS Report R41268, Small Business Administration HUBZone Program, by Robert
Jay Dilger.
33 See https://eweb1.sba.gov/hubzone/internet/. For recent legal developments relating to the priority given to the
HUBZone program, see CRS Report R40591, Set-Asides for Small Businesses: Recent Developments in the Law
Regarding Precedence Among the Set-Aside Programs and Set-Asides Under Indefinite-Delivery/Indefinite-Quantity
Contracts
, by Kate M. Manuel.
34 Source: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
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sole-source awards. For purposes of this program, veterans and service-related
disabilities are defined as they are under the statutes governing veterans affairs.35
Women-Owned Small Business Program: Under this program, contracts may
be set aside for economically disadvantaged women-owned small businesses in
industries in which they are underrepresented, and women-owned small
businesses in which they are substantially represented.
Other small businesses: Agencies may also set-aside contracts or make sole-
source awards to small businesses not participating in any other program under
certain conditions.
Subcontracting Programs for Small Disadvantaged Businesses
Other federal programs promote subcontracting with small disadvantaged businesses (SDBs).
Agencies must negotiate “subcontracting plans” with the apparently successful bidder or offeror
on eligible prime contracts prior to awarding the contract. Subcontracting plans set goals for the
percentage of subcontract dollars to be awarded to SDBs, among others, and describe efforts that
will be made to ensure that SDBs “have an equitable opportunity to compete for subcontracts.”
Federal agencies may also consider the extent of subcontracting with SDBs in determining to
whom to award a contract, or give contractors “monetary incentives” to subcontract with SDBs.
All 8(a) firms qualify as SDBs, but firms that are not participants in the 8(a) Program can also
qualify as SDBs. As of December 2010, there were 10,996 certified SDBs.36
Goaling Program
The SBA also implements the “Goaling Program,” to track agency performance in meeting their
goals for the percentage of contract and subcontract dollars awarded to small businesses.
Currently, the government-wide goal is that at least 23% of all contract dollars go to small
businesses. There are also separate goals for the percent of contract and subcontract dollars
awarded to: small disadvantaged businesses (5%); women-owned small businesses (5%);
HUBZone small businesses (3%); and service-disabled veteran-owned small businesses (3%).
Office of Small and Disadvantaged Business Utilization
Every government agency with procurement authority has an Office of Small and Disadvantaged
Business Utilization (OSDBU) to advocate within the agency for small businesses, as well as
assist small businesses in their dealings with federal agencies (e.g., obtaining payment).

35 It should be noted that veteran-owned small businesses and service-disabled veteran-owned small businesses are
eligible for separate preferences in procurements conducted by the Department of Veterans Affairs under the authority
of the Veterans Benefits, Health Care, and Information Technology Act, as amended by the Veterans’ Benefits
Improvements Act of 2008.
36 Source: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
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Capital Access Programs
Overview
The SBA has other programs to improve the access of small businesses to specific parts of capital
markets. The most important of these are to guarantee performance (surety) bonds, provide
special high technology contracting opportunities (small-business innovative research and small-
business technology transfer programs), support equity investments (small-business investment
companies), and provide technical assistance (small-business development centers).
Surety Bonds
A surety bond is a bond that a contractor purchases to guarantee that it will complete a contract. If
the contractor fails to complete the contracted work, the surety bond is used to pay for
completion. The SBA guarantees through the Surety Bond Guarantee program four types of
surety bonds for individual contracts of $2 million or less for small businesses that cannot obtain
surety bonds through regular commercial channels. First, it guarantees bid bonds to ensure that if
a bidder wins a procurement competition the bidder will sign the contract. Second, it guarantees
payment bonds that the contractor will pay suppliers and subcontractors. Third, it guarantees
performance bonds that the contractor will complete the work as contracted. Fourth, it guarantees
ancillary bonds that are required to guarantee the performance of the contract.
Small Business Innovation Research Awards
Small Business Innovation Research (SBIR) awards are competitive grants to small businesses
(500 or fewer employees) to research and develop new ideas for selected government agencies.
Government agencies with the largest research budgets fund the SBIR program. The SBA
coordinates and oversees the SBIR program but does not provide funding for the awards. Phase I
grants allow a company to determine if an idea has scientific and technical merit and is feasible.
Phase II evaluates the idea’s commercial potential. Phase III is private sector development of the
idea. Phase I awards are for a maximum of $100,000 over six months, and phase II awards are for
a maximum of $750,000 over more than two years. Intellectual property rights are protected for
four years after the completion of phase I, phase II, or phase III.
Small Business Technology Transfer Awards
The Small Business Technology Transfer (STTR) program is similar to the SBIR program, but it
requires the small business to work with a nonprofit research institute. The SBA coordinates and
oversees the STTR program but does not provide funding for the awards. Phase I awards are a
maximum of $100,000 for one year. Phase II awards are for a maximum of $500,000 over two
years. While there is no STTR funding for phase III, the awarding agency may issue a sole source
contract to a team that has successfully reached this stage.
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Small Business Investment Company (SBIC) Loan Guarantee Program37
The SBIC program enhances small business access to venture capital by stimulating and
supplementing the flow of private equity capital and long term loan funds available to small
businesses to encourage their growth, expansion, and modernization. The SBA does not make
direct investments in small businesses. It works with over 300 privately owned and managed
small business investment companies (SBICs) licensed by the SBA to provide financing to small
businesses with private capital the SBIC has raised and with funds the SBIC borrows at favorable
rates because the SBA guarantees the debenture (loan obligation).
A licensed SBIC in good standing, with a demonstrated need for funds, may apply to the SBA for
financial assistance (called leverage) of up to 300% of its private capital. However, most SBICs
are approved for a maximum of 200% of its private capital and no fund management team may
exceed the allowable maximum amount of leverage, currently $150 million per SBIC and $225
million for two or more licenses under common control.
SBICs pursue investments in a broad range of industries, geographies, and stage of investment.
Some SBICs specialize in a particular field or industry in which their management has expertise,
while others invest more generally. Most SBICs concentrate on a particular stage of investment
(i.e., start-up, expansion, or turnaround) and identify a geographic area in which to focus.
The SBIC program currently has invested about $15.0 billion in small businesses, with about $8.7
billion raised from private capital and $6.3 billion guaranteed by the SBA. In FY2010, the SBA
guaranteed $931 million in SBIC small business investments, and SBICs provided another $1.1
billion in investments from private capital, for a total of more than $2.0 billion in financing for
1,331 small businesses.38
Only businesses that meet the SBA’s definition of small may participate in the SBIC program.
They must meet either the SBA’s size standard for the industry in which they are primarily
engaged, or a separate financial size standard which has been established for the SBIC program.
SBICs use the size standard that is most likely to qualify the company, typically the financial size
standard for the SBIC program. It is currently set as a maximum net worth of no more than $18
million and average after-tax net income for the preceding two years of not more than $6 million.
All of the company’s subsidiaries, parent companies, and affiliates are considered in determining
if it meets the size standard.39
New Market Venture Capital
New Market Venture Capital is a program that encourages equity investments in small businesses
in low-income areas that meet specific statistical criteria established by regulation. A tax credit is
available on a competitive basis.

37 For additional information, see CRS Report R41456, SBA Small Business Investment Company Program, by Robert
Jay Dilger and Oscar R. Gonzales.
38 U.S. Small Business Administration, “Fiscal Year 2011 Congressional Budget Justification and FY2009 Annual
Performance Report,” Washington, DC, 2010, pp. 19, 51; and U.S. Small Business Administration, “FY2010
Congressional Budget Justification,” Washington, DC, 2009, pp. 17, 42.
39 13 C.F.R. § 107.700; 13 C.F.R. § 107.710; 13 C.F.R. § 301(c)(2); and 13 C.F.R. § 301(c)(1).
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Entrepreneurial Development40
Entrepreneurial development provides technical and managerial training to small businesses.
Some of this is free and other training is at low cost and includes the Service Corps of Retired
Executives, Small Business Development Centers, Women’s Business Centers, and Native
American Outreach programs.
The Service Corps of Retired Executives (SCORE) uses more than 11,000 volunteers to bring
practical experience to start-up small business and to those thinking about starting a new small
business.
Small Business Development Centers (SBDCs) provide free or low-cost assistance to small
businesses using programs customized to local conditions. SBDCs support small business in
marketing and business strategy, finance, technology transfer, government contracting,
management, manufacturing, engineering, sales, accounting, exporting, and other topics. SBDCs
are funded by grants from the SBA and matching funds. There are more than 1,100 SBDCs and at
least one in every state and territory.
Women’s Business Centers (WBCs) are similar to SBDCs, except they concentrate on assisting
women entrepreneurs. There are WBCs in most states and territories.
The SBA’s Office of Native American Affairs works to encourage native Americans (native
American Indians, native Alaskans, and native Hawaiians) to start and expand small businesses.
Advocacy and Other
SBA’s Office of Advocacy
The mission of the SBA’s Office of Advocacy is to represent small businesses, small
organizations, and small governments within the federal government and to promote research on
small business. Among its activities are sponsoring and encouraging research into the role of
small businesses in the national economy and encouraging federal agencies to specifically
consider the impact of regulations on small businesses. Advocacy also includes the National
Women’s Business Council and the Veterans Business Development centers.
The National Women’s Business Council (NWBC) is an independent office within the SBA
charged with undertaking programs to support women-owned businesses.
The Office of Veterans Business Development encourages veterans who are interested in starting
a small business or who own one.

40 For further analysis see CRS Report R41352, Small Business Management and Technical Assistance Training
Programs
, by Robert Jay Dilger and Oscar R. Gonzales.
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Legislative Activity
As mentioned in this report, several new programs and program changes have occurred as the
result of ARRA and the Small Business Jobs Act of 2010. More detailed information on this
legislation is available in CRS Report R41385, Small Business Legislation During the 111th
Congress
, by Robert Jay Dilger, Oscar R. Gonzales, and Gary Guenther; CRS Report R40985,
Small Business: Access to Capital and Job Creation, by Robert Jay Dilger and Oscar R.
Gonzales; and CRS Report R40241, Overview and Analysis of Small Business Provisions in the
American Recovery and Reinvestment Act of 2009
, by Oscar R. Gonzales and N. Eric Weiss. A
brief overview follows.
ARRA
ARRA, P.L. 111-5, provided a total of $730 million to the SBA. Specifically, the act provided:
$375 million set aside for reimbursements, loan subsidies, and loan modifications related to
certain loans, and $255 million for loan guarantees of $35,000 or less in a new small business
stabilization program also known as the America’s Recovery Capital (ARC) loan program; (2)
$30 million for expanding the SBA’s microloan program; (3) $25 million for staffing up to meet
demands for new ARRA programs; (4) $20 million to improve lender oversight; (5) an additional
$15 million for the SBA’s surety bond program and increases in the size of the maximum bond;
and (6) $10 million for the Office of Inspector General.
The legislation also temporarily eliminated (or reduced as much as possible) fees in the 7(a) and
504 business loan programs and for lender oversight; allowed the SBA to guarantee certain loans
that, in part, refinance existing business loans; authorized the SBA to guarantee pools of first lien
CDC/504 loans sold to third party investors; increased the funds (“leverage”) available to SBA-
licensed Small Business Investment Companies (SBICs); required SBICs to invest at least 50% of
their venture capital in low-income areas as defined by the New Market Venture Capital program
(NMVC); and required SBICs to make 25% of their investments in “smaller” companies.
Small Business Jobs Act of 2010
P.L. 111-240, the Small Business Jobs Act of 2010, made several changes to SBA programs. The
legislation increased the loan limits for the 7(a) program from $2 million to $5 million. The act
increased the 504/CDC Program’s loan limits from $2 million to $5 million for standard
borrowers, and from $4 million to $5.5 million for manufacturers; and temporarily expanded for
two years the eligibility for low-interest refinancing under the SBA’s 504/CDC program for
qualified debt. The law also amended the SBA Express Program, the SBA Microloan Program,
the SBA secondary market program, the SBA size standards, and the SBA International Trade
Finance Program. These changes are summarized in Table 3 below.
In addition to changes to SBA programs, P.L. 111-240 included a $30 billion Small Business
Lending Fund, a $1.5 billion State Small Business Credit Initiative, and about $12 billion in tax
relief for small businesses.
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Table 3. Selected Provisions, the Small Business Jobs Act of 2010
Issue/Program
The Small Business Jobs Act of 2010
SBA 7(a) Program
increased the 7(a) Program’s loan limit from $2 million to
$5 million.
SBA 504 Program
increased the 504/CDC Program’s loan limits from $2
million to $5 million for standard borrowers, and from $4
million to $5.5 million for manufacturers; and temporarily
expanded for two years the eligibility for low-interest
refinancing under the SBA’s 504/CDC program for qualified
debt.
SBA Express Program
temporarily increased for one year the Express Program’s
loan limit from $350,000 to $1 million.
SBA Microloan Program
increased the Microloan Program’s loan limit for borrowers
from $35,000 to $50,000; and increased the loan limits for
Microloan intermediaries after their first year in the
program from $3.5 million to $5 million.
Temporary SBA fee subsidies and loan modifications
temporarily increased the SBA’s guarantee on 7(a) loans to
90% and provided for the elimination of selected fees on
the SBA’s 7(a) and 504 loans through December 31, 2010.
SBA secondary market
extended the SBA’s secondary market lending authority
under ARRA from two years from enactment to two years
from the first sale of a pool of first lien position 504 loans
guaranteed under this authority.
SBA size standards
authorized the SBA to establish an alternative size standard
for the SBA’s 7(a) and 504 programs that would use
maximum tangible net worth and average net income; and
to establish an interim alternative size standard of not more
than $15 million in tangible net worth and not more than
$2 million in average net income for the two full fiscal years
before the date of the application.
SBA International Trade Finance Program
increased the International Trade Finance Program’s loan
limit from $1.75 million, of which not more then $1.25
million may be used for working capital, supplies, or
financings, to $4.5 million.
Source: Smal Business Jobs Act of 2010.
Discontinued Programs
Over the years, the SBA has terminated many programs. Some of these cancellations were done
administratively, others at the direction of Congress. In many cases key features of the programs
were incorporated in other programs. In recent years the small loans program, FA$TRAK loan
program (now called SBA Express, which continues), LowDoc loan program, handicapped
assistance loan program, and disabled assistance loan program have been terminated. The SBA
has ended its support of the veterans franchise program (VETFRAN), but the Department of
Veterans Affairs continues its support.
Many features of the FA$TRAK and LowDoc programs were brought into the SBAExpress
program, which is part of the 7(a) loan guarantee program. Those opposed to these changes
believed that FA$TRAK and LowDoc offered borrowers and lenders advantages in the areas of
collateral, fees, and lender participation requirements that SBA Express does not.
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Proponents of eliminating the handicapped, disabled, and VETFRAN programs believed that
these business owners did not face challenges that differed significantly from those of other small
business owners.
Appropriations
The SBA’s FY2010 appropriation was $824.0 million.41 The SBA’s FY2011 appropriation is
$729.7 million, a reduction of $94.3 million from its FY2010 appropriation. The reductions
include a 0.2% across-the-board rescission imposed by P.L. 112-10, the Department of Defense
and Full-Year Continuing Appropriations Act, 2011.42
For FY2012, the Administration has requested $985.4 million for SBA programs. The
Administration requested $427.3 million for salaries and expenses. Included in that amount is
funding for non-credit programs, such as Historically Underutilized Business Zones (HUBZones),
Microloan Technical Assistance, the National Women’s Business Council, Native American
Outreach, the Service Corps of Retired Executives (SCORE), Small Business Development
Centers, Veteran’s Business Development, and Women’s Business Centers. The Administration
also requested $167.3 million for the SBA’s disaster loan program, and $390.8 million for all
other SBA programs.


Author Contact Information

Oscar R. Gonzales

Analyst in Economic Development Policy
ogonzales@crs.loc.gov, 7-0764



41 The SBA also received an additional $962.5 million in FY2010—$775.0 million in temporary funding for 7(a) and
504/CDC loan guaranty program fee subsidies and loan modifications, and $187.5 million for other SBA programs.
P.L. 111-118, the Department of Defense Appropriations Act, 2010, provided $125 million, P.L. 111-144, the
Temporary Extension Act of 2010, provided $60 million, P.L. 111-157, the Continuing Extension Act of 2010,
provided $80 million, and P.L. 111-240, the Small Business Jobs and Credit Act of 2010, provided $510 million to
provide temporary fee subsidies for the SBA’s 7(a) and 504/CDC loan guaranty programs and to temporarily increase
the 7(a) program’s maximum loan guaranty percentage to 90%. P.L. 111-240 extended the subsidies and 90% loan
guaranty through December 31, 2010, and provides $187.5 million for other SBA programs that are to remain available
through FY2011. Also, P.L. 111-150, to permit the use of previously appropriated funds to extend the Small Business
Loan Guarantee Program, authorized the SBA to use $40 million in previously appropriated funds for fee subsidies and
the 7(a) loan modification. For further information concerning the SBA’s appropriation see CRS Report R41340,
Financial Services and General Government (FSGG): FY2011 Appropriations, coordinated by Garrett Hatch.
42 The FY2011 appropriation eliminated $59.0 million for special projects and $1.0 million for the surety bond
revolving loan fund. The SBA reported that there are sufficient funds in reserve to cover the cost of surety bond claim
defaults. Funding for the SBA’s disaster loan programs was reduced from $78.3 million in FY2010 to $45.4 million in
FY2011.
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