John F. Kennedy would have turned 100 on May 29. Across the country, local communities have celebrated the life and legacy of America's 35th President.
JFK is remembered for many things: his youthful good looks, charisma, service in WWII, challenges of his 1,000 days in office and, of course, his tragic death. He took over the presidency at a time when Cold War tensions brought the U.S. to the brink of nuclear showdown with the Soviet Union during the Cuban Missile Crisis. He also sent advisors and support to Vietnam.
Meanwhile, domestically, Kennedy faced racial tensions during the Civil Rights Movement and worked to fulfill his campaign promises of a "New Frontier" in which he planned to increase federal funding for education, the elderly, and the economic needs of rural areas.
The economy, which was coming out of a recession, improved during JFK's days in office, according to the U.S. Department of Commerce Bureau of Economic Analysis's Quarterly GDP figures by sector, (1953-64). Inflation was low, unemployment dropped, and car sales were robust, according to the Department of Commerce's "Statistical Abstract, 1964." Kennedy increased government (deficit) spending and invested in highway infrastructure. He encouraged the Federal Reserve to keep inflation rates low.
On the campaign trail in 1960, Kennedy addressed small business: "America can afford the initiative, the energy, and the work to bring the country's small businesses back to sound health... We must expand the sources of long-term credit necessary to establish the foundations of truly sound economic development."
Ironically, during the early years of his presidency, JFK considered eliminating the Small Business Administration (SBA) as an independent agency and wrapping it into the Department of Commerce.
The SBA was set up by Kennedy's predecessor, Dwight D. Eisenhower to "aid, counsel, assist and protect the interests of small business concerns."
Fortunately, the agency remained and has been instrumental in supporting the entrepreneurial goals of countless Americans wanting to fulfill their dreams of business ownership. After Kennedy's assassination, the SBA began to attack poverty through its Equal Opportunity Loan (EOL) Program, which relaxed the credit and collateral requirements for applicants living below the poverty level who had been unable to secure financing for entrepreneurial ventures.
Over the years, the SBA has expanded its efforts to help aspiring business owners and has created initiatives that encourage ventures launched by women, minorities and veterans. Its loan programs have helped millions of entrepreneurs over the years. SBA Loans include:
SBA 7(a) Loans, the most popular type of funding under the SBA umbrella. The program backs loans up to $5,000,000 that can be used for buying a business, real estate or equipment, securing working capital, and refinancing existing debt.
CDC/SBA 504 Loans, low interest loans made in conjunction with a nonprofit Certified Development Company (CDC). This loan program provides financing of up to $20 million for major purchases, including equipment or real estate.
SBA CAPLines Lines of Credit that enable small businesses to meet short-term and seasonal working capital needs. The SBA offers 5 types of these lines of credit:
1. Seasonal lines that help companies during seasonal downturns;
2. Contract lines that finance direct labor and material costs associated with executing contracts;
3. Builders' lines that help finance direct labor and material costs (the building project serves as the collateral);
4. Standard asset-based lines, revolving lines for businesses unable to meet standards of long-term credit options. (These lines provide financing for cyclical growth, recurring and/or short-term needs.); and
5. Small asset-based lines ($200,000 maximum) that operate like standard asset-based lines except that some of the stricter servicing requirements are waived if the business demonstrate consistent repayment ability and cash flow for the full amount.
SBA Export Loans created to enable international expansion.
SBA Microloans for as much as $50,000 with up to 6-year terms. These loans, usually made via nonprofit, community-based organizations, typically incur higher interest rates than other SBA loans. The funding cannot be used to refinance debt or purchase real estate.
6. SBA Disaster Loans are offered to companies located in a declared disaster zones that suffer damage to property or that incur significant economic losses because of a disaster.
While it does not lend directly. The SBA makes loan guarantees to back up banks and other institutions that provide startup capital and expansion loans. Banks, CDCs, credit unions, microlenders, and others actually make the loans. The SBA guarantees part of the borrower's repayment (maximum 85 % for loans under $150,000 and 75 % for loans over $150,000), thereby reducing risk for the lenders. The result is that the lending institution will provide loans that otherwise would not make. Meanwhile, borrowers receive funding with lower rates and longer terms that they might not qualify for under a conventional loan's terms.
In addition to its lending programs, the SBA provides online informational resources, free seminars, and counseling and mentorship programs. Visit SBA.org.