Small businesses are critical to U.S. national economy, and it helps create more jobs, a senior Houston district official from the U.S. Small Business Association (SBA) said in an interview with Xinhua recently.
Mark Winchester, the deputy district director of SBA said that in the last 20 years two thirds of the jobs created in the United States were generated by small businesses which also helps sustain the economy of the country.
"It is to ensure that there is a diverse supplier of products both to the national economy but also to the U.S. government," Winchester said.
Since its founding in 1953, SBA has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses, which ensures that these businesses have the tools and resources required to start and expand their operations, and create jobs that support a growing economy and strengthen America's middle class.
Winchester explains that SBA provides guarantee when a small business does not have the assets necessary to secure the loan from the bank.
"Banks require for every one dollar that they lend they need one dollar in collateral or asset. What can be in substitute of that one dollar in collateral is the SBA guarantee."
Obviously, by having in lieu of that collateral, it mitigates the risk of the lender because it knows if the borrower defaults, it can fall back on that guarantee.
Winchester added that SBA also collaborates with other organizations to provide free and confidential business counseling. One of those partners is Score, which has over 11,000 volunteers and over 300 chapters nationwide.
Another resource partner is the Small Business Development Center, which has over 1,000 centers across the country and over 15 centers in Houston, according to Winchester.
"They provide technical assistance and business counseling from performance, business plans to patents and trademarks to HR (human resources)," Winchester said. "So they provide a wide variety of subject matter expertise that can aid small businesses including in the tech arena."
There are criteria for business to participate in SBA programs. One criterion for a business to be eligible for lending or for contracting is the size standard, which is based on the North American Industry Classification System (NAICS) code.
According to Winchester, the code could be broken down into two components: the number of employees and revenues.
"The number of employees depending on the industrial code can go from 500 all the way up to 1,500 employees," Winchester said. "Now for revenues it can be anywhere from 7.5 million all the way up to 37.5 million."
SBA was officially established in 1950s, but its philosophy and mission began to take shape years earlier in a number of predecessor agencies, largely as a response to the pressures of the Great Depression and World War II.
Asking whether SBA has introduced any new guidelines in response to President Trump's "America First" policy, Winchester's answer is no.
"SBA's mission to start, expand and grow does not change. So whoever is the current administration, the SBA administration does not change. And so we are there to help small businesses through our lending, through our contracting and through more counseling," Winchester said.
Following his election to the presidency, "America First" has become the official foreign policy doctrine of the Trump Administration.
According to Winchester, SBA offers various resources in promoting exports, and one of the resources is the district international trade officer. There are 68 district offices throughout the country, and six of them in Texas.
"They provide counseling one on one to small businesses regarding exporting and international trade," Winchester said. "They also conduct international export trainings."
Another resource that SBA has as it relates to exporting is financing, Winchester said. "We have the 78 programs which goes up to 5 million dollars that's used domestically." The international trade loan, the export working capital and the Export Express.
"You can get from 350,000 with a 90 percent guarantee up to 500,000 with a 75 percent guarantee under the Export Express," Winchester said. "And then up to 5 million dollars with a 90 percent guarantee both for export working capital and the International Trade Loan Program."
SBA is an independent agency of the U.S. federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of the United States.
According to SBA's data, America's 30 million small businesses are the engine of job creation and economic growth in the United States, creating nearly two out of every three new jobs in the country and employing over half the nation's workforce.
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