Lafayette Online » SBA

SBA to conduct small business financing workshop

admin — Wed, 27 May 2009 04:20:46 +0000

INDIANA — The U.S. Small Business Administration (SBA) will conduct a free online business workshop. The on-line workshop will be take place on Wednesday, June 16th, from 1:30pm-2:30pm (EDT).

The on-line business workshop will provide guidance to prepare small business owners for meeting with a lender. Business owners will learn how SBA is involved in the loan process, what documents to take to the lender, and how to make a good first impression with the lender. Business plans and other strategies needed to help businesses be successful will also be discussed. The Internet session will provide an overview of SBA guaranty loan programs and services that can help an entrepreneur start or grow a business.

By logging on one will see how:

Improve business cash flow
Refinancing existing debt
Eliminate balloon payments
How to use special programs for Veteran and women owned businesses
Financing options available to construct or buy a building

Log on to the session from any computer anywhere. For the presentation log on to http://www.readytalk.com and for the audio portion call (866) 740-1260 the access code for both is 3056201#. To register, contact (317) 226-7272 x115 or vernice.mathis@sba.gov. The U.S. Small Business Administration is an agency of the Federal government.

Loans available to Indiana small businesses boosted by Recovery Act

admin — Wed, 15 Apr 2009 14:24:02 +0000

[OP-ED] INDIANAPOLIS, Ind. — The American Recovery and Reinvestment Act (Recovery Act) and Department of Treasury actions hold potential for helping solve our small business credit crunch by offering incentives to lenders to provide capital to small businesses, and by reducing the cost of borrowing for small businesses.

The U.S. Small Business Administration (SBA) guarantees loans that are made to small businesses by lending institutions such as banks and credit unions. Upon request by a financial institution, the U.S. Small Business Administration can assume a major portion of the risk of lending to a small business. This is an incentive for the lender to make loans; particularly to start-up businesses and businesses in new industries.

With the help of our resource partners: SCORE, the Indiana Small Business Development Center Network, and the Women’s Business Centers; the SBA Indiana District Office can assist Indiana entrepreneurs with their business planning, assist with preparations for seeking financing, and help analyze strategies and techniques that will guide the business through challenges and for planned growth.

The Recovery Act provides SBA with $730 million in total funding. This includes $375 million to cover the costs of temporarily eliminating loan fees for borrowers and raising guaranty limits on some loans; providing extra funding for SBA-backed Microlenders; and targeting $255 million for a new loan program that is being developed to help viable small businesses with immediate economic hardship make payments on existing loans.

For SBA lenders, the Recovery Act supports guarantees of up to 90 percent on most types of SBA 7(a) loans to qualified small businesses. SBA 7(a) loans can be used for a wide variety of business purposes. With a 90 percent guaranty on a $100,000 loan, for example, the financial institution will be at risk for only $10,000. This level of risk-sharing will be a substantial incentive for a financial institution to make capital available for small businesses.

Prior to our economic downturn, many of the loans guaranteed by SBA were pooled and sold to investors on the secondary market. This mechanism placed more capital into the marketplace for additional lending. In the past several months; however, this secondary market has stalled. To further assist SBA lenders, particularly smaller community banks and credit unions, the Treasury Department will commit up to $15 billion in TARP funds to help unfreeze the market. The Treasury will use the TARP funds to purchase existing and new SBA-backed loans made by our lenders. This is viewed as a major step toward increasing the opportunity for SBA-backed lending to our small businesses.

Another SBA program is the 504 Certified Development Company Loan Program (504). This program is used to finance purchase or construction of a building or for purchase of long-lived, major equipment. A change to the 504 program under the Recovery Act is its use to refinance existing fixed asset loans as part of a business expansion project. As further incentive for lenders, the Recovery Act temporarily eliminates 504 loan fees they had been paying. The Recovery Act also authorizes SBA to use its guaranty authority to establish a secondary market for bank loans made under the 504 loan program; and to make loans to broker-dealers who buy SBA-backed loans from lenders and pool them for sale to investors on the secondary loan market.

The Recovery Act enables immediate savings for small business borrowers. Prior to the Recovery Act, loans with an SBA guaranty had an upfront fee charged to the borrower. Money collected from the upfront fee had been pooled and used to help pay the guaranteed portion of the loan to the lender if a small business defaulted on a loan. Elimination of the borrower loan fee under the Recovery Act represents a substantial savings to the small business. For instance, if a small business borrowed $100,000 from a bank under the SBA 7(a) guaranty program, the upfront loan fee would have been $1,700.

The temporary loan fee eliminations and 90 percent guarantee provisions will apply to approximately $8.7 billion in 7(a) guaranteed loans and $3.6 billion in 504 loans across the country. SBA estimates that its allotment from the Recovery Act will cover lending in both programs through calendar year 2009.

While it is a challenging time for prospective and current business owners, our Indiana entrepreneurial spirit will help us rebuild our economy. The American Recovery and Reinvention Act of 2009 holds opportunities for re-starting lending and promoting investment in our nation’s small businesses. Now is the time to take advantage of the many elements in the Recovery Act. Contact SBA at 317/226-7272 or www.sba.gov/in for more information and assistance.

Recovery Act doubles surety bond guarantee for small businesses

admin — Mon, 30 Mar 2009 04:19:52 +0000

WASHINGTON, DC -– Effective today, small businesses that need surety bonds to compete for construction and service contracts can qualify for U.S. Small Business Administration-backed surety bonds of up to $5 million. The higher amount, a result of the Recovery Act, is more than double the previous $2 million maximum surety bond guaranteed by SBA.

Through SBA’s Surety Bond Guarantee program, SBA guarantees bid, payment and performance bonds. Surety bonds protect the project owner against financial loss if contractors default or fail to perform.

Small businesses that need surety bonds to compete for construction and service contracts can qualify for U.S. Small Business Administration-backed surety bonds of up to $5 million.

SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace. Under the partnership, SBA provides a guarantee to a participating surety company of between 70 and 90 percent of the bond amount.

“During these difficult economic times,” said Acting SBA Administrator Darryl K. Hairston, “these changes are particularly helpful to small and emerging contractors who need access to surety bonds so they can bid on public construction and service projects. These changes will support small and emerging businesses nationwide, particularly construction contractors who have seen their markets hurt by a poor economy and lagging construction environment.”

Additional program enhancements contained in the stimulus bill will be announced soon in the Federal Register. Among these changes is a provision that will allow SBA to guarantee a bond on a federal contract up to $10 million following certification by the contracting officer that the bond guarantee is required.

In recent years SBA has taken a number of steps to reinvigorate its Surety Bond Guarantee Program and make it easier for small businesses to obtain bonds. In 2007, SBA established a more flexible pricing structure, allowing Preferred Surety Bond Sureties to charge current state rates rather than being locked into rates that were established several years ago.

Industry associations have commended SBA for these new changes and SBA continues to encourage surety bond providers and agents to actively participate in the program.

SBA applauds Stimulus Bill, planning underway for maximum small biz impact

admin — Mon, 23 Feb 2009 21:58:11 +0000

WASHINGTON, DC -– The American Recovery and Reinvestment Act contains a package of loan fee reductions, higher guarantees, new SBA programs, secondary market incentives, and enhancements to current SBA programs that will help unlock credit markets and begin economic recovery for the nation’s small business sector.

“The tax incentives and credit stimulus elements of the Recovery Act will truly help small business owners affected by the credit crunch, and will provide financing opportunities to help them create new jobs in their communities,” said Acting SBA Administrator Darryl K. Hairston.

“There’s a lot to digest in the legislation, and SBA has established teams to tackle a wide variety of policy decisions, system modifications, regulatory changes, legal requirements, and new program launches authorized by the President and Congress,” said Hairston.

The bill provides $730 million to SBA and makes changes to the agency’s lending and investment programs so that they can reach more small businesses that need help. The funding includes:

$375 million for temporary fee reductions or eliminations on SBA loans and increased SBA guaranteed shares, up to 90 percent for certain loans
$255 million for a new loan program to help small businesses meet existing debt payments
$30 million for expanding SBA’s Microloan program, enough to finance up to $50 million in new lending and $24 million in technical assistance grants to microlenders
$20 million for technology systems to streamline SBA’s lending and oversight processes
$15 million for expanding SBA’s Surety Bond Guarantee program
$25 million for staffing up to meet demands for new programs
$10 million for the Office of Inspector General

The bill also authorizes refinancing for certain SBA loans so borrowers can expand their businesses on favorable terms, and expands leverage capability for Small Business Investment Companies.

“We are going to be part of the solution, and this bill gives us specific tools to make it easier and less expensive for small businesses to get loans, give lenders new incentives to make more loans, and help restore healthy SBA secondary markets to boost liquidity,” Hairston said, noting also that more details on implementation will be coming over the next few weeks.

The stimulus bill takes a comprehensive approach and attacks several problems facing small businesses at once by reducing fees, guaranteeing a greater share of certain loans, expanding capacity in the Microloan program, providing new loans to help small businesses keep their doors open through economic hardship, as well as new mechanisms to help unfreeze the secondary markets for SBA-backed loans.

Declines in SBA lending volume last year, which are continuing in FY 2009, reflect problems in the broader credit markets, and present hurdles to small businesses that are seeking credit in the current economy. The financial crisis has created a variety of conditions that impact small businesses, including a lack of liquidity in the banking system, a reluctance of many lenders to extend new loans, tightened credit standards, weaker finances at small businesses, and uncertainty about taking on new debt on the part of many entrepreneurs.

The Recovery Act addresses small businesses’ lending problems, and addresses key investment and contracting issues. The bill helps Small Business Investment Companies better leverage investment capital to reach more small companies. The bill also increases the current contract limit for SBA’s Surety Bond Guarantee program, which will help small businesses compete for contracts.

90 Percent Guarantee
The bill allows SBA to raise its loan guarantee from the current levels to as much as 90 percent for some loans. At present, SBA can guarantee loans up to 85 percent on loans up to $150,000, and up to 75 percent on loans greater than $150,000. The 50 percent guarantee on SBA Express loans would remain unchanged. Increasing the SBA guarantee percentage will encourage lenders to extend more capital to small businesses by increasing the share covered by an SBA guarantee.

Business Stabilization Loans
The bill creates a new SBA loan program to provide deferred-payment loans of up to $35,000 to viable small businesses that need the money to make payments on an existing, qualifying loan for up to six months. These loans will be 100 percent guaranteed by SBA. Repayment would not have to begin until 12 months after the loan is fully disbursed. The bill provides $255 million for this new program. These loans will help ensure that small businesses have time to re-focus their business plans in order to succeed in the long run.

Microloans
The bill expands SBA’s Microloan program, which provides small loans (up to $35,000) paired with technical assistance to start-up, newly established or growing small businesses. The bill provides funding to increase loans from SBA to participating Microlenders by $50 million through September 30, 2010, and adds $24 million in grants to provide technical assistance to borrowers. Historically, these loans reach low-income individuals, women and minorities in both rural and urban areas. Expanding this program through the stimulus bill will help ensure these entrepreneurs are not left behind in the credit crunch.

Refinancing
The bill also gives SBA the power to use the 504 Certified Development Company program to refinance existing loans for fixed assets, providing fresh support for small business expansion. This change will help business owners expand their current development projects and create jobs in their communities.

Secondary Market Expansion
The bill authorizes SBA to establish a secondary market for pools of “first lien” loans under the 504 program. These “first lien” loans from commercial lenders currently have no SBA guarantee. The bill authorizes SBA to deploy federal guarantees for pools of these first lien loans, so that they can be sold to investors in a secondary market. Providing liquidity for these first mortgages will help encourage lenders to continue participating in SBA’s 504 loan program, which provides a key source of capital for community development and other projects.

The bill also empowers SBA to set up a Secondary Market Lending Authority that would make direct loans to broker-dealers that participate in the secondary market for SBA-guaranteed 7(a) loans. These broker-dealers would use the funds to purchase SBA-backed loans from commercial lenders, assemble them into pools and sell them to investors in the secondary loan market. This program may help address some of the issues facing the secondary market for SBA loans and may ultimately help SBA lenders make new loans to borrowers.

Investment Program
The bill helps SBA-licensed Small Business Investment Companies (SBICs) and families of SBIC funds better leverage the capital they use to invest in small businesses. The bill sets maximum levels of funding the agency can provide to these companies at up to three times the private capital raised by those companies, or $150 million, whichever is less. It also raises the percentage any one SBIC can invest in a single small business to 10 percent of total capital, and raises from 20 percent to 25 percent the percentage of any licensee’s dollar investments that must be made in “smaller” businesses.

Surety Bonds
The bill also raises the maximum contract amount that can be covered by an SBA guaranteed surety bond from $2 million to $5 million, and, under certain circumstances, for contracts amounting to $10 million, and provides additional funds to cover the costs of expanding this program. Small businesses need surety bonds in order to bid on and obtain many federal and other contracts. SBA guarantees surety bonds to small businesses that private surety companies would not otherwise be able to extend.

Financing small business online workshop

admin — Mon, 05 Jan 2009 20:18:13 +0000

INDIANAPOLIS, Ind. — The U.S. Small Business Administration (SBA) will conduct an on-line business workshop, Tuesday, January 13, 2009 from 11am-12pm (EST).

This on-line workshop will provide guidance to small business owners that are in need of new construction loan or those that wish to purchase a building. Business owners will learn how SBA is involved in the loan process, what documents to take to the lender, and how to make a good first impression with the lender. The Internet session will also review SBA programs and services that can help an entrepreneur start or grow a business.

The following questions will be answered in this workshop:

How much money can I borrow?
Can the loan be used for more than land and building?
How much equity injection is required?
What is an SBA guaranteed loan?
How do I start the loan process?

Reservations are not required, and participants may log on to the session from any computer in any location. To participate, log on to http://www.readytalk.com and for the audio portion call (866) 740-1260 the access code for both is 3056201#.

For more information contact Ronda Crouch at (317) 226-7272 x212 or ronda.crouch@sba.gov. The U.S. Small Business Administration is an agency of the Federal government.

Huntington Bank ranks No. 1 SBA 7(a) lender in OH, IN, KY and WV

admin — Thu, 20 Nov 2008 17:01:53 +0000

COLUMBUS, Ohio — The Huntington National Bank announced it is the No. 1 Small Business Administration (SBA) 7(a) lender for 2008 (Oct. 1, 2007 – Sept. 30, 2008) in Ohio, Indiana, Kentucky and West Virginia. The bank also improved its national standing as an SBA small business lender, moving up in rank for both total loan amounts and number of loans provided to businesses with annual revenues under $10 million.

Huntington Bank named number 1 SBA 7(a) lender in OH, IN, KY and WV for October 2008

“Small businesses play a key role in the success of our communities and our overall economy. Huntington’s SBA lending record further demonstrates that we are committed to helping business owners identify solutions so they can achieve their goals,” said Craig Street, national director of SBA Lending for Huntington.

Huntington ranked first in both loan dollar volume and number of loans among all SBA lenders in Ohio with 791 loans for a total of $73.7 million. In Indiana and Kentucky, Huntington ranked first in loan dollar volume with a total of $23.6 and $6.6 million, respectively. Huntington also ranked No. 1 for the number of SBA loans in the state of West Virginia with a total of 44 loans.

Huntington moved up from its 2007 ranking to now become 11th in the nation for number of SBA loans and 15th in the nation for total 7(a) loans, the most common type of loan used by small businesses.

Huntington’s SBA enhanced loans can be used by small business owners for real estate, business acquisition or expansion, start-up costs, equipment purchases, working capital and more. The Huntington National Bank is an SBA preferred lender. For more information about Huntington’s SBA-guaranteed loan program, visit www.huntington.com.

SBA bows online resource for baby boomer entrepreneurs

admin — Thu, 16 Oct 2008 20:59:38 +0000

WASHINGTON, DC — The U.S. Small Business Administration today unveiled a new Web site geared to the 50-plus entrepreneur, providing useful information, links and resources vital to starting, growing and expanding a small business.

The new Web site at www.sba.gov/50plusentrepreneur features interactive information and links to help 50-plus entrepreneurs consider the benefits and rewards of business ownership, and to help them make informed choices about business ownership.

“The SBA is working hard to increase opportunities for small businesses of the baby boomer generation at every stage of their business development through better technology tools and effective services through the agency’s district offices and resource partners,” SBA Acting Administrator Sandy K. Baruah said. “We believe 50-plus entrepreneurs will drive significant new business growth in the coming years.”

Components of the new Web site include a self-assessment feature to help the aspiring entrepreneur determine his or her business readiness, information on borrowing and credit, and inspirational success stories from baby boomer entrepreneurs. The Web site will help users evaluate the reasons for business ownership after age 50, the risks involved, and how to devise a plan of action at every phase of business development.

This is the first new offering under the structure of the re-launched Office of Entrepreneurship Education (OEE). OEE combines SBA’s online education programs, business and community initiatives, and outreach to underserved markets under a single umbrella.

As baby boomers consider career and lifestyle shifts that extend beyond their work careers, tapping into the world of business ownership can allow them to leverage their flexibility, know- how and business acumen to go into business for themselves. Many have already joined the ranks of the nation’s self-employed and small business owners.

The SBA provides financial, management and technical assistance to thousands of small business owners throughout the country. The Web site can be accessed at all times, as well as the SBA’s other online resources and free online training at www.sba.gov.

High-impact firms create Indiana jobs and growth

admin — Fri, 25 Jul 2008 22:58:44 +0000

WASHINGTON, DC — “High-impact” firms create Indiana’s new jobs and growth, according to a study recently released by the Office of Advocacy of the U.S. Small Business Administration. Distributed across all industries, high-impact firms account for almost all employment and revenue growth in the national economy, the study concludes.

Of the 376,604 high impact firms identified by researchers nationwide, 6,777 are located in Indiana. That number represents 2.2 percent of Indiana’s firms. Of the 6,777 high impact firms located in Indiana, 181 are located in the Lafayette MSA.

The study High-Impact Firms: Gazelles Revisited, defines high-impact firms as those whose sales have at least doubled over a four-year period and which have an employment “growth quantifier” (the firm’s absolute change in employment multiplied by the percent change) of two or more.

The study notes that such firms are found across all industries and in all geographic regions. It ranks regions, states, metropolitan statistical areas, and counties by their percentage of high-impact firms. The study finds, with some data limitations, that high-impact firms are not start-ups but are on average around 25 years old, and that they come in all size classes. The report also documents that over the periods studied, nearly all job losses came from large, low-impact firms.

“High-impact firms are important to Indiana’s economic growth and development,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “State policy makers would be wise to consider how their policies can encourage such firms.”

The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.

For more information, a complete copy of the report and rankings of high-impact firms by region, state, MSA, and county, visit the Office of Advocacy website at www.sba.gov/advo.

SBA Patriot Express Loan initiative delivers $150M to vets and military community

admin — Thu, 12 Jun 2008 21:08:00 +0000

WASHINGTON, DC — In just under a year’s time, the U.S. Small Business Administration’s Patriot Express Pilot Loan Initiative approved more than $150 million in loan guarantees to nearly 1,500 veterans and their spouses who are using the SBA-guaranteed funds to establish and expand their small businesses.

Patriot Express, launched last June 28, builds on the more than $1 billion in loans SBA guarantees annually for veteran-owned businesses, and the counseling assistance and procurement support it provides each year to more than 100,000 veterans, service-disabled veterans and Reserve members.

“With the patriotic remembrances of Flag Day, June 14, comes the reminder that the SBA is committed to helping America’s service men and women during the continuing War on Terror,” SBA Acting Administrator Jovita Carranza said. “We believe that Patriot Express, supported by SBA’s other services, goes directly to the needs of these American Patriots who wish to start businesses, and in the process encourages job creation and growth, an essential part of the President’s economic agenda.”

Patriot Express is a streamlined loan product based on the agency’s highly successful SBA Express Program, but with enhanced guaranty and interest rate characteristics. The Patriot Express loan is offered by SBA’s network of participating lenders nationwide and features SBA’s fastest turnaround time for loan approvals. Loans are available up to $500,000 and qualify for SBA’s maximum guaranty of up to 85 percent for loans of $150,000 or less and up to 75 percent for loans over $150,000 up to $500,000. For loans above $350,000, lenders are required to take all available collateral.

The Patriot Express loan can be used for most business purposes, including start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases.
Patriot Express loans feature SBA’s lowest interest rates for business loans, generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. Local SBA district offices will have a listing of Patriot Express lenders in their areas. Details on the initiative can be found at www.sba.gov/patriotexpress

Interest rate maximums for Patriot Express loans are the same as those for regular 7(a) loans: a maximum of Prime + 2.25 percent for maturities under seven years; Prime + 2.75 percent for seven years or more. Interest rates can be higher by two percent for loans of $25,000 or less; and one percent for loans between $25,000 and $50,000.

Patriot Express is available to military community members including veterans, service-disabled veterans, active-duty service members participating in the military’s Transition Assistance Program, Reservists and National Guard members, current spouses of any of the above, and the widowed spouse of a service member or veteran who died during service, or of a service-connected disability.

Patriot Express loans have been approved in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Guam and generally range from $5,000 to $375,000 in individual loan amounts. The average loan amount is almost $103,000. Nearly 15 percent of those loans have gone to military spouses. After loan applications are approved by the bank, they are submitted to SBA for approval. Most applications are approved by SBA within 24 hours.

SBA has veterans’ business development officers in district offices in every state and territory able to provide military community members full access to the SBA’s range of programs and services. There are also five Veterans Business Outreach Centers located in: Albany, N.Y; Pittsburgh, PA; Lynn Haven, Fla.; Edinburg, Texas; and Sacramento, Calif.

In addition to district offices, SBA’s resource partners SCORE, Counselors to America’s Small Business, Small Business Development Centers, and Women’s Business Centers provide local and online assistance with: writing a business plan, financing options to start or grow your business, managing the business, expanding the business and selling goods and services to the government.

For those who are already small business owners and who expect call-up, the SBA and its resource partners have expertise to assist with preparing their businesses before deployment, managing their businesses, selling goods and services to the government, obtaining other SBA financing and financial assistance, and obtaining loans for economic injury – Military Reserve Economic Injury Disaster Loans (MREIDL) – Loans of up to $1.5 million are available for small businesses sustaining economic injury because an owner or essential employee has been called to active duty as a military reservist.

The SBA and its Office of Veterans Business Development (OVBD) provides comprehensive assistance, outreach and support to veterans. Each year the SBA assists more than 100,000 veterans, service-disabled veterans and Reserve Component members. Go to www.sba.gov/vets.

SBA presents Doing Business with the Federal Government seminar, April 29

admin — Wed, 16 Apr 2008 14:03:40 +0000

INDIANAPOLIS, Ind. — The U.S. Small Business Administration (SBA) is presenting small business informational seminars. The next SBA Seminar, Doing Business with the Federal Government, will be offered on Tuesday, April 29, 2008. The seminar will be conducted from 3:00 p.m. to 4:30 p.m. EDT at the SBA Indiana District Office, 8500 Keystone Crossing, Suite 400, Indianapolis.

Attendees will learn:

Where to find contracting opportunities;
How to register your business to sell to the government;
How to market your products and services;
Why you may need to obtain a surety bond and how.

Reservations are required as seating is limited. There is no cost for attending this SBA seminar on Tuesday, April 29, 2008, from 3:00 p.m. to 4:30 p.m. at the Small Business Administration Indiana District Office.

For more information or to reserve your space, contact Mike Hasler at (317) 226-7272 x113 or michael.hasler@sba.gov.

The U.S. Small Business Administration is an agency of the Federal government.

Lafayette Online » SBA

SBA to conduct small business financing workshop

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