Once the Smaller Company Act was enacted in 1958, it had an exceptionally simple mission. Find a method of getting financial loans diectly to corporations that could not get them as a result of regular channels. It did this within an ingenious way. They understood banking companies where unwilling to mortgage to tiny corporations, specifically startups, as a consequence of fear of failure. Therefore the SBA collected a fee on just about every mortgage and applied this like a fund to pay for banking companies if there was a default. Bingo, there was invented the SBA assurance fee. It would not acquire a diploma in rocket science from MIT and an MBA from Harvard to understand this offers incentives for the banking companies for making a lot more financial loans.