TOP DRAWER ARTICLE

History of the SBA
by
HL Carpenter

Want to start, build and grow a business? Free help is available from the US Small Business Administration (SBA), an independent federal agency. Through state-run field offices and partnerships with public and private organizations, the SBA offers counseling and workshops – and has done so since 1953.

That’s the short story.

The longer one is that federal aid to small businesses began in 1932, when President Hoover formed the Reconstruction Finance Corporation (RFC). The goal of the RFC was to make federal loans available to businesses hurt by the depression. During World War II, another agency, the Smaller War Plants Corporation (SWPC) was set up to assist small businesses in getting defense contracts.

After the war, the SWPC was absorbed by the original agency (RFC) and also by the Office of Small Business, and a new focus emerged: Educating entrepreneurs. In 1953, the functions of these agencies, including loans, training and management assistance, were combined into the newly created Small Business Administration.

Over the years, Congress made changes to the SBA. In 1958 it became easier for high-risk small businesses to get credit, and in 1964 filing requirements were eased for lower income applicants wanting to open new businesses. Legislation currently being considered revises the Small Business Act (which established the SBA) and expands certain programs.

Originally published October 2009.

Last update: December 30, 2009