The Small Business Administration (SBA) administers several types of programs to support small businesses, including loan guaranty and venture capital programs to enhance small business access to capital; contracting programs to increase small business opportunities in federal contracting; direct loan programs for businesses (as well as homeowners and renters) to assist their recovery from natural disasters; and management and technical assistance training programs to assist small business formation and expansion.
The SBA's loan guarantees support access to capital for small businesses that cannot obtain credit elsewhere with reasonable terms and conditions. Such programs include the 7(a) loan guaranty program, the 504/CDC loan guaranty program, international trade and export promotion programs, and the Microloan program. Most SBA loan programs charge fees to help offset program costs, including costs related to loan defaults. In order to improve small business access to capital markets, the SBA also offers capital investment programs, including the Small Business Investment Company program, two special high technology contracting programs (the Small Business Innovative Research and Small Business Technology Transfer programs), and the Growth Accelerator Fund Competition (GAFC).
The SBA's entrepreneurial development (ED) noncredit programs provide a variety of management and training services to small businesses. The SBA partners with third parties to provide that training directly to business owners. ED programs include online training in addition to in-person services at brick-and-mortar locations, such as SBA Small Business Development Centers (SBDCs), which provide free or low-cost services across U.S. states and territories. SBA also supports targeted assistance, including as Veterans Outreach and Native American Outreach programs, as well as initiatives for specific kinds of training, such as the Cybersecurity for Small Business Pilot Program (CSBPP). In addition, the SBA directly provides management, training, and outreach services to small business owners and aspiring entrepreneurs through its 68 district offices, overseen by the SBA's Office of Field Operations and 10 regional offices.
Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts. These programs respond to the congressional directive in the Small Business Act to ensure that a "fair proportion" of federal contract and subcontract dollars is awarded to small businesses. SBA is further involved in government-wide small business procurement goaling, through which agencies seek to award set shares of contracting dollars to small businesses, set in statute.
This report provides an overview of SBA's programs, as well as select agency offices, such as the Office of Advocacy, Office of the National Ombudsman, and Office of the Inspector General. It also provides an overview of the SBA's budget and references other CRS reports that examine the SBA's programs in greater detail.
Established in 1953, the Small Business Administration's (SBA's) origins can be traced to World War II, when concerns about war production and the impacts on small business were paramount. The SBA assumed some of the functions of the Reconstruction Finance Corporation (RFC), which had been 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 following charges of political favoritism in the granting of loans and contracts.1
In 1953, Congress passed the Small Business Act (P.L. 83-163), which authorized the SBA. The act specifies that the SBA's mission is to promote the interests of small businesses to enhance competition in the private marketplace:
It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to [e]nsure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government (including but not limited to contracts or subcontracts for maintenance, repair, and construction) be placed with small-business enterprises, to insure that a fair proportion of the total sales of Government property be made to such enterprises, and to maintain and strengthen the overall economy of the Nation.2
The SBA administers several types of programs to support small businesses, including loan guaranty and venture capital 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. With few exceptions, to qualify for SBA assistance, an organization must meet the definitions of both being a business and being small.3 This report provides an overview of the SBA's programs. It also references other CRS reports that examine the SBA's programs in greater detail.
FY2026 appropriations for SBA include funding for the following programs and offices:
To participate in any of the SBA programs, a business must meet the Small Business Act's definition of small business, which
The business may be a sole proprietorship, partnership, corporation, or any other legal form.
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. Which measure may be used depends upon the program. For example, businesses participating in the SBA's 7(a) loan guaranty program are deemed small if they either meet the SBA's industry-specific size standards or do not have more than $20 million in tangible net worth and not more than $6.5 million in average net income after federal taxes (excluding any carryover losses) for the two full fiscal years before the date of the application.7
The SBA's industry-specific size standards vary by industry, and they are based on one of the following four measures: the firm's (1) average annual receipts in the previous three (or, in some cases, five) years, (2) average number of employees over the previous two years, (3) asset size, or (4) for refineries, a combination of number of employees and barrel per day refining capacity. Historically, the SBA has used the average number of employees measure for the manufacturing and mining industries and average annual receipts for most other industries. The asset size measure is mostly used for the finance and insurance industry.
Size standards are designed to encourage competition within each industry; they are derived through an assessment of the following four economic factors: "average firm size, average assets size as a proxy of start-up costs and entry barriers, the 4-firm concentration ratio as a measure of industry competition, and size distribution of firms."8 The SBA also considers the ability of small businesses to compete for federal contracting opportunities and, when necessary, several secondary factors "as they are relevant to the industries and the interests of small businesses, including technological change, competition among industries, industry growth trends, and impacts of size standard revisions on small businesses."9
The SBA has authority to make direct loans but, with the exception of disaster loans and loans to Microloan program intermediaries, has not exercised that authority since 1998.10 The SBA indicated that it stopped issuing direct business loans primarily because the subsidy rate was "10 to 15 times higher" than the subsidy rate for its loan guaranty programs.11 Instead of making direct loans, the SBA guarantees loans issued by approved lenders to encourage those lenders to provide loans to small businesses "that might not otherwise obtain financing on reasonable terms and conditions."12
The SBA provides loan guarantees for small businesses that cannot obtain credit elsewhere with reasonable terms and conditions. Its largest loan guaranty programs are the 7(a) loan guaranty program, the 504/CDC loan guaranty program, international trade and export promotion programs. The SBA also operates the Microloan program.
The SBA's loan guaranty programs require personal guarantees from borrowers and share the risk of default with lenders by making the guaranty less than 100% of project costs. In the event of a default, the borrower 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 businesses are eligible for loan guarantees, but a few are not. A list of ineligible businesses (such as insurance companies, real estate investment firms, firms involved in financial speculation or pyramid sales, and businesses involved in illegal activities) is contained in 13 C.F.R. Section 120.110.13 Nonprofit and charitable organizations are also generally ineligible, with an exception for nonprofit child care centers.14
Most of these programs charge fees to help offset program costs, including costs related to loan defaults. These fees are usually charged both up-front, at the time of the guarantee, and as an ongoing annual fee. The SBA annually announces the fees that will apply to loans approved during that year. Statute sets two basic requirements for the fees. First, the fees cannot exceed certain statutory maximum levels. Second, the SBA must set the fees to reduce the expected budgetary cost of the loans (mostly defaults, net of recoveries, but excluding administrative costs) to zero. While the SBA's goal is to achieve a zero subsidy rate for the loan guarantee programs, this is not always possible in the short-term in fiscal years when defaults are higher than historical averages (such as during an economic recession). At those times, Congress often provides appropriations for the credit subsidy cost of the programs.
The 7(a) loan guaranty program is named after the section of the Small Business Act that authorizes it. These are loans made by SBA lending partners (mostly banks but also some other financial institutions) and partially guaranteed by the SBA.
Lenders are permitted to charge borrowers fees to recoup specified expenses and are allowed to charge borrowers "a reasonable fixed interest rate" or, with the SBA's approval, a variable interest rate.16 The SBA uses a multistep formula to determine the maximum allowable fixed interest rate for all 7(a) loans (with the exception of the Export Working Capital Program and Community Advantage loans) and periodically publishes that rate and the maximum allowable variable interest rate in the Federal Register.
Maximum interest rates allowed on variable-rate 7(a) loans are pegged to an allowable base rate, which is usually the prime rate. The allowed spread over the base rate depends on the loan amount and the loan's maturity (under seven years or seven years or more).17 The adjustment period can be no more than monthly and the adjustment frequency cannot change over the life of the loan.
Table 1 provides information on the 7(a) program's key features, including its eligible uses, maximum loan amount, loan maturity, fixed interest rates, and guarantee fees.
|
Key Feature |
Program Summary |
|
Use of Proceeds |
Fixed assets, working capital, financing of start-ups, or to purchase an existing business; some debt payment allowed, but lender's loan exposure may not be reduced with the Express products. Lines of credit are available. |
|
Maximum Loan Amount |
$5 million. |
|
Maturity |
Five years to seven years for working capital, up to 25 years for equipment and real estate. All other loan purposes have a maximum term of 10 years. |
|
Maximum Interest Rates |
Set as a spread over the base rate (usually the prime rate) and the loan amount. |
|
Guaranty Fees |
Up-front and annual servicing fees set to reduce the credit subsidy cost of the program to zero. Fee waivers are available in specific situations, such as for loans to veterans. |
Sources: Table compiled by CRS from data from the U.S. Small Business Administration.
The 504/CDC loan guaranty program uses Certified Development Companies (CDCs), which are private, nonprofit corporations established to contribute to economic development within their communities. Each CDC has its own geographic territory, which is one or more contiguous states. 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 or inventory. A commercial lender provides at least 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.19 The small business must contribute at least 10% as equity.
To participate in the program, small businesses cannot exceed $20 million in tangible net worth and cannot have average net income of more than $6.5 million for two full fiscal years before the date of application. Also, CDCs must intend to create or retain one job for every $90,000 of the debenture ($140,000 for small manufacturers) or meet an alternative job creation standard if they meet any one of 15 community or public policy goals.
Table 2 summarizes the 504/CDC loan guaranty program's key features.
|
Key Feature |
Program Summary |
|
Use of Proceeds |
Fixed assets only—no working capital. |
|
Maximum Loan Amount |
Maximum 504/CDC participation in a single project is $5 million and $5.5 million for manufacturers and specified energy-related projects; minimum is $25,000. There is no limit on the project size. |
|
Maturity |
10 years for equipment; 20 or 25 years for real estate. Unguaranteed financing may have a shorter term. |
|
Maximum Interest Rates |
Fixed rate is established when the debenture backing the loan is sold and is pegged to an increment above the current market rate for 5-year and 10-year U.S. Treasury issues. |
|
Participation Requirements |
504/CDC projects generally have three main participants: a third-party lender provides 50% or more of the financing; a CDC provides up 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. For good cause shown, the SBA may authorize an increase in the CDC's percentage of project costs covered up to 50%. No more than 50% of eligible costs can be from federal sources. |
|
Guaranty Fees |
The SBA charges up-front and annual fees to reduce the credit subsidy cost of the program to zero. The SBA and CDCs are authorized to charge additional fees (such as an annual development company fee and a processing and packaging fee at origination). |
|
Job Creation Requirements |
Must intend to create or retain one job for every $90,000 of the debenture ($140,000 for small manufacturers) or meet an alternative job creation standard if it meets any one of 15 community or public policy goals. |
Sources: Table compiled by CRS from data from the U.S. 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 the CDC loan is 40% of the total package.
Although any of SBA's loan guaranty programs can be used by firms looking to begin exporting or expanding their current exporting operations, the SBA has three loan programs that specifically focus on trade and export promotion:
In many ways, the SBA's trade and export promotion loan programs share similar characteristics with other SBA loan guaranty programs. For example, the Export Express program resembles the SBAExpress program. The SBAExpress program shares several characteristics with the standard 7(a) loan guarantee program except that the SBAExpress program has an expedited approval process, a lower maximum loan amount, and a smaller percentage of the loan guaranteed. Similarly, the Export Express program shares several of the characteristics of the standard International Trade loan program, such as an expedited approval process in exchange for a lower maximum loan amount ($500,000 compared with $5 million) and a lower percentage of guaranty.
The Microloan program provides direct loans to qualified nonprofit intermediary Microloan lenders that, in turn, provide "microloans" of up to $50,000 to small businesses and nonprofit child care centers. Microloan lenders also provide marketing, management, and technical assistance to Microloan borrowers and potential borrowers.
The program was authorized in 1991 as a five-year demonstration project and became operational in 1992. It was made permanent, subject to reauthorization, by P.L. 105-135, the Small Business Reauthorization Act of 1997. Although the program is open to all small businesses, it targets new and early-stage businesses in underserved markets, including borrowers with little to no credit history, low-income borrowers, and women and minority entrepreneurs in both rural and urban areas who generally do not qualify for conventional loans or other, larger SBA guaranteed loans.23
Table 3 summarizes the Microloan program's key features.
|
Key Feature |
Program Summary |
|
Use of proceeds |
Working capital and acquisition of materials, supplies, furniture, fixtures, and equipment. Loans cannot be made to acquire land or property. |
|
Maximum Loan Amount |
$50,000. |
|
Maturity |
Up to seven years. |
|
Maximum Interest Rates |
On loans of more than $10,000, the maximum interest rate that can be charged to the borrower is the interest rate charged by the SBA on the loan to the intermediary, plus 7.75%. On loans of $10,000 or less, the maximum interest rate that can be charged to the borrower is the interest charged by the SBA on the loan to the intermediary, plus 8.5%. Rates are negotiated between the borrower and the intermediary and typically range from 7% to 9%. |
|
Guaranty Fees |
The SBA does not charge intermediaries up-front or ongoing service fees under the Microloan program. |
Source: Table compiled by CRS from data from the SBA.
The SBA has several programs to improve small business access to capital markets, including the Small Business Investment Company program and two special high technology contracting programs (the Small Business Innovative Research and Small Business Technology Transfer programs).
The Small Business Investment Company (SBIC) program enhances small business access to venture capital by stimulating and supplementing "the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply."25
The SBA works with over 300 privately owned and managed 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).
SBICs provide equity capital to small businesses in various ways, including by
|
Key Feature |
Program Summary |
|
Use of Proceeds |
To purchase small business equity securities, make loans to small businesses, purchase debt securities from small businesses, and provide, subject to limitations, small businesses a guarantee of their monetary obligations to creditors not associated with the SBIC. |
|
Maximum Leverage Amount |
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 their private capital, and no fund management team may exceed the allowable maximum amount of leverage, currently $175 million per SBIC and $350 million for two or more licenses under common control. |
|
Maturity |
SBA-guaranteed debenture participation certificates can have a term of up to 15 years, although currently only one outstanding SBA-guaranteed debenture participation certificate has a term exceeding 10 years and all recent public offerings have specified a term of 10 years. SBA-guaranteed debentures provide for semiannual interest payments and a lump sum principal payment to investors at maturity. SBICs are allowed to prepay SBA-guaranteed debentures without penalty. However, a SBA-guaranteed debenture must be prepaid in whole and not in part and can only be prepaid on a semiannual payment date. Also, low-to-moderate income area (LMI) debentures are available in two maturities, for 5 years and 10 years (plus the stub period). |
|
Maximum Interest Rates |
The debenture's coupon (interest) rate is determined by market conditions and the interest rate of 10-year Treasury securities at the time of the sale. |
|
Guaranty Fees |
The SBA requires the SBIC to pay a 3% origination fee for each debenture issued (1% at commitment and 2% at draw), an annual fee on the leverage drawn, which is fixed at the time of the leverage commitment, and other administrative and underwriting fees, which are adjusted annually. |
Source: Table compiled by CRS from data from the SBA.
The Small Business Innovation Research (SBIR) program is designed to increase the participation of small, high technology firms in federal research and development (R&D) endeavors, provide additional opportunities for the involvement of minority and disadvantaged individuals in the R&D process, and result in the expanded commercialization of the results of federally funded R&D.31 Current law requires that every federal department with an R&D budget of $100 million or more establish and operate a SBIR program. Currently, 11 federal agencies participate in the SBIR program. A set percentage of that agency's applicable extramural R&D budget—originally set at not less than 0.2% in FY1983 and currently not less than 3.2%—is to be used to support mission-related work in small businesses.32
Agency SBIR efforts involve a three-phase process. Phase I awards, normally up to $150,000, for six months are made to evaluate a concept's scientific or technical merit and feasibility. The project must be of interest to and coincide with the mission of the supporting organization. Projects that demonstrate potential after the initial endeavor may compete for Phase II awards lasting one to two years.33 Phase II awards, normally up to $1 million, are for the performance of the principal R&D by the small business. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. Federal dollars may be used if the government perceives that the final technology or technique will meet public needs.
Each participating agency's SBIR activity reflects that organization's management style. Individual departments select R&D interests, administer program operations, and control financial support. Funding can be disbursed in the form of contracts, grants, or cooperative agreements. Separate agency solicitations are issued at established times.
The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their SBIR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities.
The Small Business Technology Transfer program (STTR) provides funding for research proposals that are developed and executed cooperatively between a small firm and a scientist in a nonprofit research organization and meet the mission requirements of the federal funding agency.34 Phase I financing, normally up to $150,000, is available for approximately one year to fund the exploration of the scientific, technical, and commercial feasibility of an idea or technology. Phase II awards, normally up to $1 million, may be made for two years, during which time the developer performs R&D work and begins to consider commercial potential. Only Phase I award winners are considered for Phase II. Phase III funding, directed at the commercialization of the product or process, is expected to be generated in the private sector. The small business must find funding in the private sector or other non-STTR federal agency.
The STTR program is funded by a set-aside, initially set at not less than 0.05% in FY1994 and now at not less than 0.45%, of the extramural R&D budget of departments that spend more than $1 billion per year on this effort.35
The SBA is responsible for establishing the broad policy and guidelines under which individual departments operate their STTR programs. The SBA monitors and reports to Congress on the conduct of the separate departmental activities.
The SBA's entrepreneurial development (ED) noncredit programs provide a variety of management and training services to small businesses. Initially, the SBA provided its own management and technical assistance programs. Over time, the SBA has come to rely increasingly on third parties to provide that training.
The SBA receives appropriations (or, in some fiscal years, recommended appropriations in conference agreements or explanatory statements accompany appropriations acts) for 16 ED programs:
FY2026 appropriations for these programs are:
The SBA reported that its entrepreneurial development programs provided management and technical assistance to approximately 644,000 small business owners in FY2024.37 Much of this training is free, and some is offered at low cost.
SBDCs provide free or low-cost assistance to small businesses using programs customized to local conditions. SBDCs support small businesses in marketing and business strategy, finance, technology transfer, government contracting, management, manufacturing, engineering, sales, accounting, exporting, and other topics. SBDCs are funded by formula grants from the SBA and matching funds from grant recipients.38
As of FY2024, there were 63 so-called "lead" SBDCs, including at least one in every state as well as locations in Washington, DC; American Samoa; the Commonwealth of the Northern Mariana Islands; Guam; Puerto Rico; and the U.S. Virgin Islands. These lead SBDCs manage a network of more than 900 total SBDC service centers.39 In total, SBDCs provided services to approximately 275,800 small business owners in FY2024.40
The SBA's Microloan Technical Assistance program is part of the Microloan program but receives a separate appropriation.41 Microloan Technical Assistance provides grants to Microloan intermediaries to offer management and technical training assistance to Microloan program borrowers and prospective borrowers. At the time of this report, there were 155 Microloan intermediaries serving 47 states, Washington, DC, and Puerto Rico.42
WBCs are similar to SBDCs, except they concentrate on assisting women entrepreneurs. WBCs are funded by competitive grants and matching funds from grant recipients. As of FY2024, there were approximately 150 WBCs, which provided services to around 86,000 small business owners.43
The SBA funds a number of veterans outreach activities. These activities are coordinated by the SBA's Office of Veterans Business Development (OVBD). Although the SBA also administers a number of smaller veteran-focused programs, the primary activities funded by the SBA's veterans outreach are the Boots to Business and Boots to Business Reboot programs—which provide in-person and virtual training to veterans and their spouses—and the Veterans Business Outreach Centers (VBOC) program, which provides targeted management and technical assistance to active service members, veterans, and their spouses. At the time of this report, there were 31 VBOCs.44
STEP awards competitive grants for projects that help small businesses build their export activities. STEP grants, which may be awarded to states and U.S. territories, are intended to help increase the number of small businesses exporting; increase the dollar value of U.S. small business exports; and increase the number of small businesses exploring significant new trade opportunities, including expansions and new export opportunities.45
The SBA provides financial assistance to SCORE (formerly the Service Corps of Retired Executives) to provide in-person mentoring and online training to small business owners and prospective owners. As of FY2023, there were at least 230 SCORE chapters throughout the country.46
FAST provides grants to states and state-endorsed nonprofit organizations to provide outreach, financial support, and technical assistance to technology-based small businesses participating in or interested in participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.47
The SBA has administered GAFC to provide competitive grant awards for accelerators assisting science, technology, engineering, and math and research and development (R&D)-focused small businesses and startups. Historically, the GAFC has often targeted accelerators that supported businesses and/or geographies that traditionally faced barriers in obtaining R&D funds and investment capital, including businesses owned or led by women, minorities, and veterans, or businesses located in rural areas.48
The SBA has supported regional innovation clusters since FY2009, when it partnered with small business suppliers working in the field of robotics in Michigan. The Regional Innovation Clusters (RIC) program awards competitive grants to entities to form RICs to deliver "direct support to innovative small businesses and startups across the country."49 RICs help small businesses and startups by providing tools such as market research, customer delivery, and government contracting assistance.
PRIME makes competitive grant awards to microenterprise development organizations to facilitate technical assistance and other efforts in support of microenterprises, or businesses with fewer than five employees and that generally lack access to conventional loans, equity, or other banking services. In addition to technical assistance, PRIME awards may also be used for the development and sharing of best practices in the field of microenterprise development and for other activities determined to be consistent with PRIME's goals.50
NAO provides management and technical assistance to small business owners from groups including American Indians, Alaska natives, and native Hawaiians. This includes funding five organizations providing targeted technical assistance to these small business owners.51 These efforts are coordinated by the SBA's Office of Native American Affairs.
The SBA's HUBZone program helps small businesses located in designated Historically Underutilized Business Zones (HUBZones) compete for federal contracts. Federal agencies may award contracts directly to HUBZone-certified small businesses through a sole-source contract, limit contract competitions to HUBZone-certified firms through a contract set-aside, or provide HUBZone-certified firms a price evaluation preference in full and open competitions.52 The HUBZone program was initially funded through the SBA's salaries and expenses account. Congress started recommending or providing an appropriation for the program in FY2004.
The SBA's 7(j) Technical Assistance program (also called Empower to Grow) provides "a wide variety of management and technical assistance to eligible individuals or concerns to meet their specific needs, including: (a) counseling and training in the areas of financing, management, accounting, bookkeeping, marketing, and operation of small business concerns; and (b) the identification and development of new business opportunities."53 To be eligible for the program, a small business must be located in an area of high unemployment or low income; owned by low-income individuals; or eligible for SBA's 8(a) contracting assistance program.54
Congress has provided appropriations (or recommended appropriations) since FY2021 for the SBA to operate CSBPP to help small businesses enhance their cybersecurity. CSBPP provides competitive grants to states, state agencies, and entities designated to conduct a state's cybersecurity education to fund projects intended to help small businesses fend off online threats.55
The SBA's Entrepreneurship Education program provides online education tools to encourage learning among aspiring entrepreneurs and existing small business owners. These tools include the SBA Learning Center, which offers short video content on small business-related topics, and T.H.R.I.V.E Emerging Leaders Reimagined, which is an "executive-level training series for established business owners looking to scale and grow."56
The SBA provides funding to the NWBC, a federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues of importance to women business owners. (see "Executive Direction Programs").
As mentioned, the SBA funds third party resource partners, such as SBDCs, to provide management and training services to small business owners and aspiring entrepreneurs. The SBA also provides management, training, and outreach services to small business owners and aspiring entrepreneurs through its 68 district offices. These offices are overseen by the SBA's Office of Field Operations and 10 regional offices.57
SBA's regional offices are each overseen by a Regional Administrator. District field staff positions include lender relations specialists, business opportunity specialists, business development specialists, economic development specialists, outreach and marketing specialists, and public affairs specialists. The Office of Field Operations and the SBA's regional offices are generally funded primarily through SBA's salaries and expenses account.
In 2024 the SBA contracted with a consultant to conduct an evaluation of SBA field operations performance.58 Among other things, the evaluation found that although district offices did well at forming and maintaining relationships with SBA resource partners, the district offices lacked capacity to "equally attend to every relationship." The evaluation also noted that field operations metrics at the time did not have "strategic alignment between the activities conducted by district offices and relevant strategic objectives." The evaluation's recommendations included clarifying the roles of district offices and staff and addressing the lack of strategic metrics.
Several SBA programs assist small businesses in obtaining and performing federal contracts and subcontracts. These programs respond to the congressional directive in the Small Business Act to ensure that a "fair proportion" of federal contract and subcontract dollars is awarded to small businesses. There are a number of prime contracting programs; subcontracting programs; and other programs to promote agency contracting with small businesses (e.g., technical assistance for federal contractors, the small business goaling program, agency Offices of Small and Disadvantaged Business Utilization, and the Surety Bond Guarantee program).
Several contracting programs allow small businesses to compete only with similar firms for government contracts (via contract set-asides) or to receive sole-source awards.60 These programs, which give small businesses a chance to win government contracts without having to compete against the largest contractors in the federal market, include the following:
8(a) Program.61 Through the 8(a) Business Development Program, Congress aims to help small "socially and economically disadvantaged" business owners overcome barriers to participating in federal contracting. For eligible businesses, the 8(a) program creates federal contracting preferences such as contract set-asides and sole-source contracts. In addition to contracting preferences, the program provides participants with business development support, including mentorship, training, and counseling. These services are intended to enhance participants' competitiveness and their long-term viability as businesses. Under the authority of the Small Business Act, the SBA accepts procurements from other federal agencies and may then award contracts to program participants through either a set-aside or a sole-source award, typically depending on the value of the contract award. Statutory authority for the program is contained in Sections 7(j), 8(a), and 8(d) of the Small Business Act.
Historically Underutilized Business Zone Program.62 The Historically Underutilized Business (HUBZone) program provides certified small businesses located in certain distressed areas with contracting opportunities in the form of set-asides, sole-source awards, and price-evaluation preferences. The program's primary objectives are job creation and increased capital investment in distressed communities. Most HUBZones are designated based on Census data that indicates low income, high poverty, or high unemployment (areas known as Qualified Census Tracts and Qualified Nonmetropolitan Counties), although some HUBZones are designated based on a governor's petition or the location of a qualified disaster.
Service-Disabled Veteran-Owned Small Business Program.63 This program assists service-disabled veteran-owned small businesses (SDVOSBs) through set-asides and sole-source awards. For purposes of this program, veterans and service-related disabilities are defined as they are under the statutes governing veterans affairs.64 Section 862 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (P.L. 116-283) required the creation of a government-wide SDVOSB certification process, and the end of SDVOSB self-certification. The SBA certification system's establishment involved the transfer of the VA's Center for Verification and Evaluation, although the VA continues to determine whether an individual qualifies as a veteran or service-disabled veteran.65
Women-Owned Small Business Program.66 Women-Owned Small Business (WOSB) Federal Contract program is designed to provide greater access to federal contracting opportunities for WOSBs and economically disadvantaged WOSBs (EDWOSBs). Under this program, federal contracting officers may set aside contracts (or orders) for WOSBs (including EDWOSBs) in industries in which the SBA determines that WOSBs are substantially underrepresented in federal procurement. Contracting officers may also set aside federal contracts for EDWOSBs exclusively in industries in which the SBA determines that WOSBs are underrepresented. The Carl Levin and Howard P. "Buck" McKeon National Defense Authorization Act for Fiscal Year 2015 (P.L. 113-291) prohibited small businesses from self-certifying WOSB program eligibility as they previously had done.
Other small businesses. Agencies may also set aside contracts or make sole-source awards to small businesses under certain conditions.67
Other federal programs promote subcontracting with small businesses. For small businesses, participating in federal contracts as subcontractors can offer an important pathway to government contracting work. Subcontracting also helps the federal government maintain a diversity of suppliers. The Small Business Act requires certain contractors to provide subcontracting opportunities for small businesses and agency purchasing officials, including contracting officers, implement federal subcontracting policy across the government. There is also SBA personnel support for small business subcontractors.
The SBA's Surety Bond Guarantee Program is designed to increase small businesses' access to federal, state, and local government contracting, as well as private-sector contracts, by guaranteeing bid, performance, and payment bonds for small businesses that cannot obtain surety bonds through regular commercial channels. A surety bond is a three-party instrument between a surety (who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the contract's terms and conditions. Surety bonds encourage project owners to contract with small businesses that may not have the credit history or prior experience of larger businesses and may be at greater risk of failing to comply with the contract's terms and conditions. The SBA's guarantee currently ranges from 80% to 90% of the surety's loss if a default occurs, and is applicable to contracts of up to a certain value that is regularly updated for inflation. There is no limit to the number of bonds that can be guaranteed for any one contractor. The program is supported by fees and periodically receives appropriations to the Surety Bond Guarantees Revolving Fund account within the Department of the Treasury.
Since 1978, federal agency heads have been required to establish small business procurement goals in consultation with the SBA, "that realistically reflect the potential of small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals" to participate in federal procurement.71 Through the Business Opportunity Development Reform Act of 1988, Congress set a minimum government-wide small business procurement goal, requiring that small businesses receive "not less than 20 percent of the total value of all prime contract awards for each fiscal year" and that small businesses owned and controlled by socially and economically disadvantaged individuals receive "not less than 5 percent of the total value of all prime contract and subcontract awards for each fiscal year."72 The government-wide minimum participation goal for small businesses was increased from 20% to 23% by P.L. 105-135, the Small Business Reauthorization Act of 1997. Over the years, government-wide procurement goals for both prime and subcontract dollars have been established for small businesses owned by socially and economically disadvantaged individuals (P.L. 100-656); women-owned small businesses (P.L. 103-355); small businesses located within a HUBZone (P.L. 105-135); and small businesses owned by service-disabled veterans (P.L. 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999).
As shown in Table 5, the government has met the prime award goals for small businesses generally, as well as for SDVOSBs, for FY2019-FY2024. It has also met the subcontract award goals for small and WOSBs over the same time period.
Table 5. Federal Procurement Goals and Percentage of Federal Contract Dollars Awarded to Small Businesses, by Type of Small Business
|
Business Type |
Federal Goal |
Percentage Dollars Awarded FY2024 |
Percentage Dollars Awarded FY2023 |
Percentage Dollars Awarded FY2022 |
Percentage Dollars Awarded FY2021 |
Percentage Dollars Awarded FY2020 |
Percentage Dollars Awarded FY2019 |
|
Small Business |
|||||||
|
Prime |
23% |
28.76% |
28.35% |
26.50% |
27.23% |
26.02% |
26.50% |
|
Subcontract |
36.02% |
33.34% |
31.08% |
30.87% |
32.46% |
33.27% |
|
|
SDB |
|||||||
|
Prime Contractor |
5%a |
12.27% |
12.1% |
11.38% |
11.01% |
10.54% |
10.29% |
|
Subcontractor |
5.17% |
4.89% |
4.55% |
4.44% |
4.40% |
4.17% |
|
|
WOSB |
|||||||
|
Prime Contractor |
5% |
4.97% |
4.91% |
4.57% |
4.63% |
4.85% |
5.19% |
|
Subcontractor |
5.90% |
5.65% |
5.14% |
5.24% |
5.62% |
5.25% |
|
|
HUBZone |
|||||||
|
Prime Contractor |
3% |
2.75% |
2.78% |
2.65% |
2.53% |
2.44% |
2.28% |
|
Subcontractor |
1.86% |
1.97% |
1.68% |
1.60% |
1.65% |
1.37% |
|
|
SDVOSB |
|||||||
|
Prime Contractor |
3%b |
5.14% |
5.07% |
4.57% |
4.41% |
4.28% |
4.39% |
|
Subcontractor |
2.65% |
2.63% |
2.16% |
2.25% |
2.14% |
1.95% |
Sources: SBA, Government-wide FY2019-2024 Small Business Procurement Scorecard.
Notes: SBA excludes certain contracts when procurement data is unavailable or because the work cannot realistically be performed by small businesses. According to the SBA's FY2024 Goaling Guidelines, excluded contracts include acquisitions on behalf of foreign governments; contracts awarded to mandatory sources (which include Federal Prison Industries contracts and those with nonprofit agencies employing persons who are blind or have other significant disabilities); contracts funded with non-appropriated, agency-generated funds; Tricare health care program contracts; and Department of Veterans Affairs Community Care Network contracts. Purchases valued at less than the micro-purchase threshold are also excluded because they are not tracked in the Federal Procurement Data System. The value of contracts with these exclusions is referred to as the "small business eligible" value.
a. Executive action temporarily increased the statutory Small and Disadvantaged Business? (SDB) goal, seeking to increase this share of award dollars to 15% by 2025. In FY2022, agencies were required to collectively award at least 11% of contract spending to SDBs (https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-03.pdf). In FY2023, they were required to collectively award at least 12% to SDBs (https://www.whitehouse.gov/wp-content/uploads/2022/10/M-23-01.pdf). In FY2024, they were required to collectively award at least 13% to SDBs (https://www.whitehouse.gov/wp-content/uploads/2023/10/M-24-01-Increasing-the-Share-of-Contract-Dollars-Awarded-to-Small-Disadvantaged-Businesses_Final.pdf). The goal has since been reduced to its statutory minimum of 5%.
b. P.L. 118-31, the National Defense Authorization Act for Fiscal Year 2024, increased the SDVOSB goal from 3% to 5%.
In 1978, Congress passed amendments to the Small Business Act (P.L. 95-507), which, among other actions, established an Office of Small and Disadvantaged Business Utilization (OSDBU) in each federal agency having procurement powers. The legislation created OSDBUs to improve federal contracting opportunities for small businesses as well as to assist small business owners who contract with or seek to contract with the federal government. OSDBUs participate in the development of each purchasing agency's small business contracting strategy, train procurement personnel at agencies, and provide direct support for small business contractors and subcontractors, especially with regard to specific contracts.
The SBA Disaster Loan Program provides direct loans to help businesses, nonprofit organizations, homeowners, and renters repair or replace property damaged or destroyed in a federally declared disaster. The program is also designed to help small agricultural cooperatives recover from economic injury resulting from a disaster. SBA disaster loans include (1) personal property disaster loans, (2) real property disaster loans (3) business physical disaster loans, and (4) economic injury disaster loans (EIDL). Most direct disaster loans (approximately 80%) are awarded to individuals and households rather than small businesses. The program generally offers low-interest disaster loans at a fixed rate with loan maturities of up to 30 years. The SBA's Disaster Loan Program is unique in two respects: (1) they are currently the only loans made by the SBA that go directly to the ultimate borrower; and (2) SBA disaster assistance is not limited to small businesses.75
Funding for the SBA Disaster Loan Program was increased significantly in FY2020 and FY2021 to help small businesses adversely affected by the COVID-19 pandemic.
Homeowners, renters, and personal property owners located in a declared disaster area (and in contiguous counties) may apply to the SBA for loans to help recover losses from a declared 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."76
SBA disaster loans for individuals and households fall into two categories: (1) personal property disaster loans and, (2) real property disaster loans. These loans are limited to uninsured losses.
A personal property disaster loan provides a creditworthy homeowner or renter with up to $100,000 to repair or replace personal property items, such as furniture, clothing, or automobiles, damaged or lost in a disaster.77 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 to obtain credit elsewhere. Interest rate ceilings for personal property disaster loans are statutorily set at 8% per annum or 4% per annum if the applicant is unable to obtain credit elsewhere.78
Real property disaster loans provide creditworthy homeowners located in a declared disaster area with up to $500,000 to repair or restore the homeowner's primary residence to its pre-disaster condition.79 Only uninsured or otherwise uncompensated disaster losses are eligible for loan assistance. The loans may not be used to upgrade a home or build additions to the home, unless the upgrade or addition is required by city or county building codes. Secondary homes or vacation properties are not eligible for real property disaster loans.
SBA disaster loans for businesses and nonprofit organizations also fall into two categories: (1) business physical disaster loans and, (2) economic injury disaster loans (EIDLs). These loans are limited to uninsured losses.
Business physical disaster loans are available to almost any business located in a declared disaster area.80 Nonprofit organizations may also be eligible for business physical disaster loans. Business physical disaster loans can be used to repair or replace damaged physical property including machinery, equipment, fixtures, inventory, and leasehold improvements that are not covered by insurance. Interest rates for business physical disaster loans cannot exceed 8% per annum or 4% per annum if the business cannot obtain credit elsewhere.81 Business physical disaster loans can have maturities up to 30 years. The maximum loan amount provided for a business physical disaster loans is $2 million.82
EIDLs are available to businesses (and nonprofit organizations) located in a declared disaster area that have suffered substantial economic injury, are unable to obtain credit elsewhere, and are defined as small by SBA size regulations.83 Small agricultural cooperatives and most private and nonprofit organizations that have suffered substantial economic injury as the result of a declared disaster are also eligible for EIDLs. The loans are designed to help businesses meet financial obligations and operating expenses that could have been met had the disaster not occurred. The loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and to resume normal operations. The interest rate ceilings for EIDL are statutorily set at 4% per annum or less and the loans can have maturities up to 30 years.84 The maximum loan amount for EIDL is $2 million.85
P.L. 116-123, the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, provided EIDL eligibility to small businesses adversely affected by the coronavirus.
The CARES Act (P.L. 116-136) created a temporary COVID-19 EIDL program. Under this program, EIDL eligibility was temporarily expanded beyond eligible small businesses, private nonprofit organizations, and small agricultural cooperatives, to include startups, cooperatives, and eligible employee-owned businesses (employee stock ownership plans) with fewer than 500 employees, sole proprietors, and independent contractors.
The Inspector General Act of 1978 (P.L. 95-452, as amended) created the Office of the Inspector General (OIG) within the SBA. The inspector general, who is nominated by the President and confirmed by the Senate, directs the office. Among various agency oversight responsibilities, the Inspector General Act requires the OIG to:
promote economy, efficiency, and effectiveness in the management of SBA programs and supporting operations;
conduct and supervise audits, investigations, and reviews relating to the SBA's programs and support operations;
detect and prevent fraud, waste, and abuse;
review existing and proposed legislation and regulations and make appropriate recommendations;
keep the SBA administrator and Congress informed of serious problems and recommend corrective actions and implementation measures;
comply with the comptroller general's audit standards; and
In certain years, Congress has appropriated additional funds to the OIG for oversight and audits of SBA activities connected with substantial infusions of funding. For example, OIG was provided additional appropriations following enactment of the American Recovery and Reinvestment Act of 2009, responding to the 2008 financial crisis. Congress also appropriated additional funds for the OIG in the wake of the COVID-19 pandemic, for oversight of the CARES Act (P.L. 116-136) and the American Rescue Plan Act of 2021 (P.L. 117-2).
Congress passed the Small Business Amendments of 1974 (P.L. 93-386) to authorize the SBA Administrator to create an Office of Chief Counsel for Advocacy (Office of Advocacy), to serve as a focal point for the receipt of complaints, criticisms, and suggestions concerning the policies and activities of the SBA and any other federal agency that affects small businesses. The Regulatory Flexibility Act of 1980 (RFA, as amended)90 expanded the role of the Office of Advocacy by charging it with monitoring and reporting agencies' compliance with RFA provisions. Although the Office of Advocacy provides some small business research and other functions, it primarily works "to reduce the burdens that Federal regulations and other policies impose on small entities" through RFA compliance trainings, convening small business "roundtables" on regulatory issues, and engaging with agencies regarding their rulemaking.91
SBA executive direction programs include the SBA Office of Hearings and Appeals, the Office of the National Ombudsman, the National Women's Business Council, and Faith-Based Initiatives.
The SBA's Office of Hearings and Appeals (OHA) was established in 1983 to provide an independent, quasi-judicial appeal of certain SBA program decisions.92 OHA will hear appeals related to business size determinations; contracting officer designations of North American Industry Classification System (NAICS) codes on federal contracts; program eligibility determinations for SDVOSBs, WOSBs, and EDWOSBs and the 8(a) Business Development Program; program suspensions and terminations; and Paycheck Protection Program (PPP) loan review decisions. OHA also publishes unredacted final decisions on the SBA website.93 The SBA funds OHA through its salaries and expenses' executive direction subaccount.94
The National Ombudsman's mission "is to assist small businesses when they experience excessive or unfair federal regulatory enforcement actions, such as repetitive audits or investigations, excessive fines, penalties, threats, retaliation or other unfair enforcement action by a federal agency."96 The Office of Ombudsman works with federal agencies that have regulatory authority over small businesses to provide a means for entrepreneurs to comment about enforcement activities and encourage agencies to address those concerns promptly. It also receives comments from small businesses about unfair federal compliance or enforcement activities and refers those comments to the Inspector General of the affected agency in appropriate circumstances. In addition, the National Ombudsman files an annual report with Congress and affected federal agencies that rates federal agencies based on substantiated comments received from small business owners. Affected agencies are provided an opportunity to comment on the draft version of the annual report to Congress before it is submitted.97 The SBA funds the Office of the National Ombudsman through its salaries and expenses' executive direction subaccount.98
The National Women's Business Council is a federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the SBA on economic issues of importance to women business owners. It was created under the Women's Business Ownership Act of 1988.99 The NWBC develops policy recommendations by convening international meetings, conducting and publishing research, and hosting public events. According to its 2024 annual report, ongoing activities by NWBC staff included monthly presentations to grantee organizations partnering with the SBA's Office of Women's Business Ownership, and small-group consultations with White House officials, agency and Congressional leaders, nonprofit advocates, and women entrepreneurs.100 The SBA provides funding to the National Women's Business Council (NWBC), totaling $1.5 million for each of the past ten fiscal years.101
The SBA has sponsored initiatives targeting faith-based community organizations, and more recently established the SBA Center for Faith in response to Executive Order 14205.102 In 2015, SBA, in cooperation with the National Association of Government Guaranteed Lenders (NAGGL), created a Business Smart Toolkit in 2015 designed to "train-the-trainer" and equip faith-based and community organizations working with entrepreneurs.103 The toolkit remains a workshop for groups serving small business owners "that lays the groundwork for helping new and aspiring entrepreneurs launch a business idea and to understand the steps to building a business that is credit-ready."104 The SBA Center for Faith "builds partnerships with faith organizations to increase awareness of and access to resources such as capital, business counseling, and disaster recovery support."105
In FY2026, the Congress appropriated $1.3 billion to the SBA.107 That amount consisted of:
|
Area of Expertise |
Name |
|
Small Business Loan Programs |
Anthony A. Cilluffo |
|
Small Business Technical Assistance and Training Programs |
Adam G. Levin |
|
Small Business Contracting |
R. Corinne Blackford |
|
Small Business Administration Disaster Assistance Programs |
Bruce R. Lindsay R. Corinne Blackford |
|
Small Business Credit Markets |
Darryl E. Getter |
|
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs |
Marcy E. Gallo |
|
Small Business Legal Issues |
David H. Carpenter |
|
Small Business Certifications |
R. Corinne Blackford |
|
Small Business Statistics |
Ben Leubsdorf |
|
Small Business Tax Policy |
Anthony A. Cilluffo |
|
Small Business Assistance Resources |
Maria Kreiser |
|
State Small Business Credit Initiative |
Adam Levin |
|
Industrial Organization and Business Policy |
Clare Y. Cho Yong W. Kwon |
|
Manufacturing and Technology Policy |
Emily G. Blevins |
|
Federal Economic Development Programs |
Lisa S. Benson R. Corinne Blackford Joseph V. Jaroscak Julie M. Lawhorn Adam G. Levin |
| 1. |
U.S. Congress, Senate Committee on Expenditures, Subcommittee on Investigations, Influence in Government Procurement, 82nd Cong., 1st sess., September 13-15, 17, 19-21, 24-28, October 3-5, 1951 (Washington: GPO, 1951) and U.S. Congress, Senate Banking and Currency, RFC Act Amendments of 1951, hearing on bills to amend the Reconstruction Finance Corporation Act, 82nd Cong., 1st sess., April 27, 30, May 1, 2, 22, 23, 1951 (Washington: GPO, 1951). |
| 2. |
P.L. 83-163, the Small Business Act of 1953 (as amended), see https://www.govinfo.gov/content/pkg/COMPS-1834/pdf/COMPS-1834.pdf. |
| 3. |
The SBA provides grants to nonprofit organizations to provide training to small business owners and to provide loans to small businesses through the SBA Microloan program. Nonprofit child care centers are eligible to participate in SBA's Microloan program. |
| 4. |
13 C.F.R. §121.105. |
| 5. |
P.L. 111-240, the Small Business Jobs Act of 2010, requires the SBA to conduct a detailed review of not less than one-third of the SBA's industry size standards every 18 months beginning on the new law's date of enactment (September 27, 2010) and ensure that each size standard is reviewed at least once every five years. |
| 6. |
For additional information and analysis, see CRS Report R40860, Small Business Size Standards: A Historical Analysis of Contemporary Issues. |
| 7. |
13 C.F.R. §121.201 and P.L. 111-240, the Small Business Act of 2010, §1116. Alternative Size Standards. All of the company's subsidiaries, parent companies, and affiliates are considered in determining if it meets the size standard. |
| 8. |
SBA, Office of Government Contracting and Business Development, "SBA Size Standards Methodology," April 2019, p. 29, at https://www.sba.gov/document/support—size-standards-methodology-white-paper (hereinafter cited as SBA, "SBA Size Standards Methodology"). |
| 9. |
SBA, "SBA Size Standards Methodology," p. 1. |
| 10. |
Prior to October 1, 1985, the SBA provided direct business loans to qualified small businesses. From October 1, 1985, to September 30, 1994, SBA direct business loan eligibility was limited to qualified small businesses owned by individuals with low incomes or located in areas of high unemployment, owned by Vietnam-era or disabled veterans, owned by the handicapped or certain organizations employing them, and certified under the minority small business capital ownership development program. Microloan program intermediaries were also eligible. On October 1, 1994, SBA direct loan eligibility was limited to Microloan program intermediaries and small businesses owned by the handicapped. Funding to support direct loans to the handicapped through the Handicapped Assistance (renamed the Disabled Assistance) Loan program ended in 1996. The last loan under the Disabled Assistance Loan program was issued in FY1998. See U.S. Congress, House Committee on Small Business, Summary of Activities, 105rd Cong., 2nd sess., January 2, 1999, H.Rept. 105-849 (Washington: GPO, 1999), p. 8. |
| 11. |
U.S. Congress, Senate Committee on Small Business, Hearing on the Proposed Fiscal Year 1995 Budget for the Small Business Administration, 103rd Cong., 2nd sess., February 22, 1994, S. Hrg. 103-583 (Washington: GPO, 1994), p. 20. |
| 12. |
SBA, Fiscal Year 2010 Congressional Budget Justification, p. 30, at https://www.sba.gov/sites/default/files/Congressional_Budget_Justification_2010.pdf. |
| 13. |
Title 13 of the Code of Federal Regulations can be viewed at https://www.govinfo.gov/app/collection/cfr/2021/title13. |
| 14. |
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 child care business. |
| 15. |
For further information and analysis, see CRS Report R41146, Small Business Administration 7(a) Loan Guaranty Program. |
| 16. |
13 C.F.R. §120.213. |
| 17. |
SBA, "SOP 50 10 5(K): Lender and Development Company Loan Programs," (effective April 1, 2019), p. 153, at https://www.sba.gov/document/sop-50-10-5-lender-development-company-loan-programs. |
| 18. |
For further information and analysis, see CRS Report R41184, Small Business Administration 504/CDC Loan Guaranty Program. |
| 19. |
A debenture is a bond that is not secured by a lien on specific collateral. |
| 20. |
For further information and analysis, see CRS Report R43155, Small Business Administration Trade and Export Promotion Programs. |
| 21. |
The International Trade loan program limits its guaranty for working capital to $4 million ($4.444 million gross loan amount). |
| 22. |
For further information and analysis, see CRS Report R41057, Small Business Administration Microloan Program. |
| 23. |
See the statutory purpose statement at 15 U.S.C. §636(m)(1)(A). |
| 24. |
For further information and analysis, see CRS Report R41456, SBA Small Business Investment Company Program. |
| 25. |
15 U.S.C. §661. |
| 26. |
13 C.F.R. §107.800. The SBIC is not allowed to become a general partner in any unincorporated business or become jointly or severally liable for any obligations of an unincorporated business. |
| 27. |
13 C.F.R. §107.810 and 13 C.F.R. §107.840. |
| 28. |
13 C.F.R. §107.815. Debt securities are instruments evidencing a loan with an option or any other right to acquire equity securities in a small business or its affiliates, or a loan which by its terms is convertible into an equity position, or a loan with a right to receive royalties that are excluded from the cost of money. |
| 29. |
13 C.F.R. §107.820. |
| 30. |
For further information and analysis of the SBIR program, see CRS Report R43695, Small Business Research Programs: SBIR and STTR, by Marcy E. Gallo. |
| 31. |
See P.L. 97-219, the Small Business Innovation Development Act of 1982 and 15 U.S.C. §638. |
| 32. |
The percentage of each designated agency's applicable extramural research and development budget to be used to support mission-related work in small businesses was scheduled to increase to not less than 2.7% in FY2013, not less than 2.8% in FY2014, not less than 2.9% in FY2015, not less than 3.0% in FY2016, and not less than 3.2% in FY2017 and each fiscal year thereafter. See P.L. 112-81, the National Defense Authorization Act for Fiscal Year 2012 and SBA, "Small Business Innovation Research Program Policy Directive," 77 Federal Register 46806-46855. |
| 33. |
SBA, "About SBIR: Award Funding Amounts," at https://www.sbir.gov/about. Agencies may exceed these award amounts with SBA approval prior to the release of the solicitation, award, or modification to the award. |
| 34. |
See P.L. 102-564, the Small Business Research and Development Enhancement Act of 1992 and 15 U.S.C. §638. |
| 35. |
The STTR program's set-aside was not less than 0.4% in FY2015, and was increased to 0.45% in FY2016 and each fiscal year thereafter. See P.L. 112-81, the National Defense Authorization Act for Fiscal Year 2012 and SBA, "Small Business Technology Transfer Program Policy Directive," 77 Federal Register 46855-46908. |
| 36. |
Division E, Title V of P.L. 119-75. |
| 37. |
SBA, Fiscal Year 2024 Annual Performance Report, p. 5, https://www.sba.gov/sites/default/files/2025-02/FY24%20SBA%20APR-2025-0123-508.pdf. ("FY2024 Performance Report.) |
| 38. |
For more information, see CRS In Focus IF12402, The SBA's Small Business Development Centers Program, by Adam G. Levin. |
| 39. |
FY2024 Performance Report, p. 57. |
| 40. |
FY2024 Performance Report, p. 58. |
| 41. |
For more information, see CRS Report R41057, Small Business Administration Microloan Program, by Robert Jay Dilger and Anthony A. Cilluffo. |
| 42. |
SBA, List of Microlenders, https://www.sba.gov/funding-programs/loans/microloans/list-microlenders. |
| 43. |
FY2024 Performance Report, p. 60. |
| 44. |
SBA, Veterans Business Outreach Centers (VBOC), https://www.sba.gov/local-assistance/resource-partners/veterans-business-outreach-center-vboc-program. |
| 45. |
For more information, see CRS In Focus IF12149, The Small Business Administration's State Trade Expansion Program, by Adam G. Levin. |
| 46. |
FY2024 Performance Report, p. 61. |
| 47. |
For more information on SBIR and STTR, see CRS Report R43695, Small Business Research Programs: SBIR and STTR, by Marcy E. Gallo. |
| 48. |
For more information, see CRS In Focus IF12310, The Small Business Administration's Growth Accelerator Fund Competition, by Adam G. Levin. |
| 49. |
SBA, Regional Innovation Clusters, https://www.sba.gov/local-assistance/regional-innovation-clusters. |
| 50. |
For more information, see CRS In Focus IF12176, The Small Business Administration's Program for Investment in Microentrepreneurs, by Adam G. Levin. |
| 51. |
SBA, Native American-Owned Businesses, https://www.sba.gov/business-guide/grow-your-business/native-american-owned-businesses. |
| 52. |
For more information, see CRS Report R41268, Small Business Administration HUBZone Program. |
| 53. |
13 C.F.R. §124.702. |
| 54. |
SBA, Empower to Grow, https://www.sba.gov/sba-learning-platform/empower-grow. For more information on 8(a), see CRS Report R44844, SBA's 8(a) Business Development Program: Legislative and Program History, by R. Corinne Blackford. |
| 55. |
For more information, see CRS In Focus IF12732, The Cybersecurity for Small Business Pilot Program, by Adam G. Levin. |
| 56. |
FY2024 Performance Report, p. 62. |
| 57. |
SBA, Office of Field Operations, https://www.sba.gov/about-sba/sba-locations/headquarters-offices/office-field-operations. |
| 58. |
Pacific Research & Evaluation, LLC, Evaluation of Field Operations Performance: Report, September 6, 2024, https://www.sba.gov/sites/default/files/2024-11/SBA%20OFO%20Final%20Report_0.pdf. |
| 59. |
These programs apply government-wide but are implemented under the authority of the Small Business Act. For additional information, see CRS Report R45576, An Overview of Small Business Contracting, by R. Corinne Blackford. |
| 60. |
For more information see CRS In Focus IF12852, Federal Contract Set-Asides for Small Businesses, by R. Corinne Blackford, and CRS In Focus IF12853, Sole-Source Contracts for Small Businesses, by R. Corinne Blackford. The Competition in Contracting Act (CICA) of 1984 generally requires "full and open competition" for government procurement contracts but allows for the exclusion of "other than small business concerns" (10 U.S.C. §2304(b)(2) and 41 U.S.C. §253(b)(2)). |
| 61. |
For additional information, see CRS In Focus IF12458, The SBA's 8(a) Business Development Program, by R. Corinne Blackford; CRS Report R48190, SBA's 8(a) Business Development Program: Structure and Current Issues, by R. Corinne Blackford; and CRS Report R44844, SBA's 8(a) Business Development Program: Legislative and Program History, by R. Corinne Blackford. |
| 62. |
For additional information, see CRS Report R41268, Small Business Administration HUBZone Program, by R. Corinne Blackford. |
| 63. |
For additional information, see CRS Report R47226, Federal Contracting by Veteran-Owned Small Businesses: An Overview and Analysis of Contemporary Issues, by R. Corinne Blackford. |
| 64. |
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. |
| 65. |
Small Business Administration, "Veteran-Owned Small Business and Service-Disabled Veteran-Owned Small Business-Certification," 87 Federal Register 73400, November 29, 2022. |
| 66. |
For more information, see CRS Report R46322, The Women-Owned Small Business Contract Program: Legislative and Program History, by R. Corinne Blackford. |
| 67. |
When a contract award's value is expected to be between the "micro-purchase threshold" and "simplified acquisition threshold," an agency must award the contract to a small business "unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery." 48 C.F.R. §19.502-2(a). Before making a small business set-aside for acquisitions above the simplified acquisition threshold, a contracting officer must "first consider an acquisition for the small business socioeconomic contracting programs (i.e., 8(a), HUBZone, SDVOSB, or WOSB programs)." 48 C.F.R. §19.203(c). Certain departments also have their own contracting programs in addition to implementing these government-wide programs (e.g., the Department of Veterans Affairs' "Veterans First Program," the Department of the Interior's "Buy Indian Act" contracting preferences). |
| 68. |
For information on small business subcontracting policy, see CRS Report R47585, An Overview of Small Business Subcontracting: In Brief, by R. Corinne Blackford. |
| 69. |
For additional information see CRS Report R42037, SBA Surety Bond Guarantee Program, by R. Corinne Blackford. |
| 70. |
For further information, see CRS Insight IN12018, Federal Small Business Contracting Goals, by R. Corinne Blackford. |
| 71. |
15 U.S.C. §644(g)(2); and P.L. 95-507, a bill to amend the Small Business Act and the Small Business Investment Act of 1958. |
| 72. |
P.L. 100-656, codified at 15 U.S.C. §644(g)(1). |
| 73. |
For additional information, see CRS Report R47851, Offices of Small and Disadvantaged Business Utilization: An Overview, by R. Corinne Blackford. |
| 74. |
For additional information, see CRS Report R44412, SBA Disaster Loan Program: Frequently Asked Questions, by Bruce R. Lindsay; CRS Report R47245, SBA Disaster Loan Limits: Policy Options and Considerations, by Bruce R. Lindsay, R. Corinne Blackford, and Daniela E. Lacalle; and CRS Report R46963, SBA Disaster Loan Interest Rates: Overview and Policy Options, by Bruce R. Lindsay, Darryl E. Getter, and Anthony A. Cilluffo. |
| 75. |
13 C.F.R. §123.200. |
| 76. |
13 C.F.R. §123.200. Disaster declarations are published in the Federal Register and can also be found on the SBA website at https://disasterloan.sba.gov/ela/Declarations/Index. For more information on disaster declarations, see |
| 77. |
13 C.F.R. §123.105(a)(1). |
| 78. |
15 U.S.C. 636(d)(5)(B) and 15 U.S.C. 636(d)(5)(A). |
| 79. |
13 C.F.R. §123.105(a)(2). |
| 80. |
See C.F.R. §§123.200 and 123.201 for eligibility requirements. |
| 81. |
15 U.S.C. §636(d)(4)(C) and 15 U.S.C. §636(d)(5)(C). |
| 82. |
15 U.S.C. §636(b)(8)(A). |
| 83. |
Size standards vary according to many factors including industry type, average firm size, and start-up costs and entry barriers. See 13 C.F.R. §123.300 for eligibility requirements. |
| 84. |
The 4% interest rate ceiling is established in regulation: 13 C.F.R. §123.302. |
| 85. |
15 U.S.C. §636(b)(8)(A). |
| 86. |
For additional information and analysis of the SBA's COVID-19 Economic Injury Disaster Loan program, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Bruce R. Lindsay, Adam G. Levin, and R. Corinne Blackford. |
| 87. |
For additional information and analysis, see CRS Report R44589, SBA's Office of Inspector General: Overview, Impact, and Relationship with Congress, by R. Corinne Blackford and Ben Wilhelm. |
| 88. |
SBA, OIG, "Strategic Plan Fiscal Years 2022-2027," p.8. |
| 89. |
For further information see CRS In Focus IF12986, Small Business Administration Office of Advocacy, by R. Corinne Blackford. |
| 90. |
P.L. 96-354. For more information on the RFA, see CRS In Focus IF11900, The Regulatory Flexibility Act: An Overview, by Maeve P. Carey. |
| 91. |
SBA, Office of Advocacy FY 2025 Congressional Budget Justification and FY 2023 Annual Performance Report. Congress enhanced Advocacy's independence through the Small Business Jobs Act of 2010 (P.L. 111-240), by requiring the President to provide a separate statement on the amount of appropriations requested for Advocacy, to be designated in a separate account in the General Fund of the Treasury. |
| 92. |
SBA, "Office of Hearings and Appeals," at https://www.sba.gov/about-sba/oversight-advocacy/office-hearings-appeals. |
| 93. |
SBA, "OHA Decisions," at https://www.sba.gov/about-sba/oversight-advocacy/office-hearings-appeals/oha-decisions. |
| 94. |
SBA, FY2026 Congressional Budget Justification, p. 11. |
| 95. |
For further information and analysis, see CRS Report R45071, SBA Office of the National Ombudsman: Overview, History, and Current Issues, by Robert Jay Dilger, R. Corinne Blackford, and Ben Wilhelm. |
| 96. |
SBA, "Office of the National Ombudsman," at https://www.sba.gov/ombudsman. |
| 97. |
SBA, "National Ombudsman's Fiscal Year Reports to Congress," at https://www.sba.gov/ombudsman/national-ombudsmans-fiscal-year-reports-congress. |
| 98. |
SBA, FY2026 Congressional Budget Justification, p. 11. |
| 99. |
The National Women's Business Council, "About Us," at https://www.nwbc.gov/about-us/. 15 U.S.C. §7107. |
| 100. |
National Women's Business Council, 2024 Annual Report, at https://www.nwbc.gov/report/2024-annual-report/. |
| 101. |
CRS Report R43846, Small Business Administration (SBA) Funding: Overview and Recent Trends, by Anthony A. Cilluffo, R. Corinne Blackford, and Adam G. Levin. |
| 102. |
Executive Order 14205, "Establishment of the White House Faith Office," 90 Federal Register 9499-9501, February 7, 2025. |
| 103. |
"SBA and NAGGL Launch "Business Smart Toolkit" for Underserved Communities Looking to Elevate Entrepreneurship," New Jersey Business Magazine, September 3, 2015. |
| 104. |
SBA, "Business Smart Toolkit," at https://www.sba.gov/partners/counselors/instructional-materials-trainers/business-smart-toolkit. |
| 105. |
SBA, "SBA Center for Faith," at https://www.sba.gov/about-sba/sba-locations/headquarters-offices/office-entrepreneurial-development/sba-center-faith. |
| 106. |
For further information concerning SBA appropriations, see CRS Report R43846, Small Business Administration (SBA) Funding: Overview and Recent Trends. |
| 107. |
Consolidated Appropriations Act, 2026 (P.L. 119-75). |