American attorney and author Elizabeth Edwards once said, “She stood in the storm, and when the wind did not blow her way, she adjusted her sails.” Her message points to survival instinct, a quality aptly demonstrated by American small businesses over the last two decades. These firms have shown unfathomable fortitude and deep resilience while navigating systemic crises. Full recovery takes time, and in this phase, like iconic American artist Ginger Rogers, who consistently managed to control and balance fast footwork with the same step speed as her illustrious dancing partner Fred Astaire, the Small Business Administration (SBA) has been a trusted partner standing firm behind small businesses and keeping them afloat in challenging times.
The SBA’s history dates to the Great Depression of the 1930s when concerns about the devastating effects of a stock market crash on a war-ravaged economy were paramount. US banks suffered catastrophic losses, resulting in severe liquidity shortages nationwide. Among the hardest hit were small business lending markets, which essentially froze and starved the whole small business ecosystem for liquidity. Small businesses, which were important for the economy, became severely undercapitalized. After several decades of efforts by policymakers, the US government formally passed the Small Business Act in 1953 and authorized the SBA to manage and address the concerns of small businesses. The act specifies that the SBA’s mission is to promote the interests of small businesses in the private marketplace. Since then, the SBA has played a crucial role in the US economy while guaranteeing billions of dollars to small businesses each year. The SBA currently has several types of lending programs, including loan guaranty, to increase small businesses’ access to capital.