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SBA Loans
History of SBA Lending

The Small Business Administration (SBA), established in 1953. is a division of the U.S. Department of Commerce, created to help individuals operate small businesses in the U.S.

One of the ways this agency helps small business owners is with financing through SBA loans. Specifically, the Small Business Administration guarantees loans to qualifying businesses that do not currently meet their bank's lending criteria. So, if you can't get a business loan from other sources, the SBA might be a good option.

Here's how it works. The SBA essentially guarantees loans from commercial banks who actually provide the capital for the business loan. This way, the financial institution, such as Southside Bank, will lessen the risk taken in extending the credit.

SBA loans can help you get the credit you need to start or expand your business. To learn more, spend some time in our SBA sections that follows this page.

The U.S. Small Business Administration was created in 1953 through the vision of three well-known leaders in our government's history. First was Congressman John William Wright Patman from Texas. Elected as a Democrat to the Seventy-First Congress and reelected to the twenty-three succeeding Congresses (from March 1929 to his death in March 1976), he served as the chairman of the Select Committee on Small Business and as a member of the Committee on Banking and Currency. He was very concerned with the reported difficulty that small businesses had in borrowing money.

Through 1951 and 1952, and after much thought and discussion, he developed a plan, created from the evaluation and effects of the Smaller Plants Corporation and the Reconstruction Finance Corporation, for an agency to help small businesses succeed and to ensure small firms would be viable for defense-related production--a critical role they played in World War II. In 1952, Congressman Patman presented the bill to Speaker of the House Samuel Taliaferro Rayburn. First elected as a United States Congress representative in 1912 and subsequently reelected twenty-four times, Sam Rayburn was Speaker of the House for ten separate Congresses, the longest running term on record. Rayburn saw the value in Congressman Patman's bill and pushed it through the 82nd Congress in 1953.

President Dwight David Eisenhower was elected to office in 1952. As an admirer of businessmen, he relied heavily on them in staffing his administration and experienced little dissent from his advisers in signing the bill that established the Small Business Administration in 1953 for an initial period. Once Congress had an opportunity to determine its usefulness, SBA became a permanent agency in 1958.

From those early days of New Deal and Fair Deal Programs, no one could have envisioned the far-reaching effect this small agency would have on small business. In the early 50s, it actually made direct loans to small businesses. The SBA became a Cabinet agency under the presidency of William J. Clinton.

In the words of Paul Harvey, now for the rest of the story. Congressman Patman was a Representative from Texarkana, Texas. Speaker of the House Sam Rayburn was a Representative from Bonham, Texas. As for President Dwight D. Eisenhower, many people may not realize, the 34th president of the US., was born in 1890 in Denison, Texas. These three Texans of vision were the founding fathers of the U.S. Small Business Administration.

Note: SBA's Region IV includes the five states, Texas, New Mexico, Arkansas, Oklahoma and Louisiana with a total of 10 district offices in those five states.

 


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