Week 3: Small Business Administration Mentorship Programs

Greetings, welcome once again to my blog. You might have noticed a gap in my posting schedule, this is because there have unfortunately been some technical difficulties with the blog site, but now I’m back to posting in full swing and can now post my whole backlog, thank you all for your patience.

As I wrote about last week, SBA mentorship programs are programs where small businesses are provided with experts in the field of contracting and given guidance and help them secure deals with much larger corporations. I already covered this, so I won’t spend too much time recapping. In general, Small business mentorship programs are meant to help small businesses navigate the complexities of government contracting and improve their chances of success. Government contractors and advisors would obviously have a vested interest in how effective these programs are, which is why I have researched whether they are worth considering for clients.

The most pertinent benefits of SBA’s are the immediate access to equity investments, loans, and bonds, as well as the sharing of data and human resources. All of these resources are beneficial in both the short and the long term, but the main selling point is the guidance on internal functions. These factors have proven to help both large and small companies. Small companies are protected by SBA’s guidelines and big companies receive benefits for their efforts.

However, I don’t know if I need to point out the folly of allowing large businesses to give advice and generally have access to the internal workings of many small businesses. Additionally, SBA’s often come with upfront costs attached, which can be difficult to justify for a lot of small businesses, especially when utilizing the resources you receive from an SBA to their full potential isn’t always guaranteed for contractors who lack manpower or time, despite the fact that SBAs can provide minor aid in regards to the former. In fact, the loans may not even be worth it. The average SBA loan is over $400k, and the limit on an SBA loan is 5 million USD! Although this figure is virtually unheard of, over 70% of small businesses in America are in some form of significant debt, and the longer a business has been around, the more likely it is to fail and be unable to pay off these debts, as shown in these two graphs.

All things considered, if one is looking to enroll in an SBA, they should consider their current means and whether they are in the proper position to take full advantage of the resources they will be granted access to.   

Works Cited

25+ Essential Small Business Lending Statistics [2023]: What Percentage Of SBA Loans Get Approved” Zippia.com. Nov. 3, 2022, https://www.zippia.com/advice/small-business-lending-statistics/