The SBA Advantage

1. The SBA Advantage www.sba.gov/ma

2. SBA History: We are the U.S. Small Business Administration • Part of the Federal Government. • Created by Congress in1953. OurMission: Maintain and strengthen the U.S. economy by: ❶ counseling, assisting and protecting the interests of small businesses ❷ helping families and businesses recover from national disasters

3. In FY 2014….. • The Massachusetts SBA helped roughly 2500 small businesses to secure about $600,000,000 in capital support; • Counseled and trained over 28,000 clients between SBA and its partner network; • Assisted small businesses with contracting opportunities – the small business estimate is over $2.1 billion.

5. SBA’s Toolbox Includes: C x 3 Counseling Business Education & Training Capital Access to Financing Contracting Selling to the U.S. Government + Advocacy and Disaster Assistance

6. Exporting Success Story: Atlas Devices Visit Our Local Website: www.sba.gov/ma “Build Batman’s utility belt.” That was the challenge put to Nate Ball, Daniel Walker and Bryan Schmid in 2005 when the young researchers joined a competition between the Massachusetts Institute for... READ MORE Press Releases • December 17, 2014 Small Business Awards Deadline Approaches • December 4, 2014 SBA Announces New 8(a) Business Development Program... • November 25, 2014 Massachusetts SBA Announces 2014 E200/ Emerging... GET MORE PRESS RELEASES Our contact information “Build Batman’s utility belt.” That was the challenge put to Nate Ball, Daniel Walker and Bryan Schmid in 2005 when the young researchers joined a competition between the Massachusetts Institute for... READ MORE Find local events!

7. MA Resource Guide Plus info on SBA’s programs and services. Info on the many small business resources available in MA.

8. www.business.usa.gov • A product of collective thoughts and inputs from 14 agencies, making this site a one stop shop for everything related to business in the USA • Provides legal and regulatory information • Complete info on Launching, Managing, Growing and Getting Out of Business • Topic include: • Start a Business • Grow Your Business • Access Financing • Expand Exporting • Find Opportunities • Veteran • Health Care Changes • Taxes & Credits

9. BEFORE You Get Started… • Starting a business is the dream of every American. However, there is a gap between dreams and reality. Your dreams can only be achieved with careful planning… • Things to consider… • Self Analysis – do you need a partner? • Personal skills and experience • What makes your product or service stand out? • Marketing analysis • Finances

10. Counseling SCORE: www.score.orgSCORE volunteers are statewide in 6 chapters Experienced Volunteers Offering: • Expert business counseling • Marketing advice • Business plan preparation • Loan application assistance • Online or in person counseling • FREE AND CONFIDENTIAL Contact SCORE: Boston………………617-565-5591 www.scoreboston.org Cape Cod ……… 508-775-4884 www.scorecapecod.org Northeastern MA .. .978-922-9441 www.scorenemass.org Southeastern MA….508-587-2673 www.scoresema.org Western MA ………413-785-0314 www.scorewesternmass.org Worcester ……….. 508-753-2929 www.scoreworcester.org

11. Massachusetts Small Business Development Centers MSBDC: www.msbdc.org Paid advisors across the state in 6 regional centers. • Free and Confidential • Business plan and loan application assistance • Combines resources of SBA, local government, private sector and academia • Export and government contracting assistance. • Typically located at colleges and universities: U-Mass Amherst and Boston, Salem State and Clark University Contact the MSBDC: Boston 617-287-7750 Pittsfield 413-499-0933 Worcester 508-793-7615 Salem 978-542-6343 Fall River 508-673-9783 Springfield 413-737-6712 Govt. Contracting 413-737-6712 x 105 Export Help 617-973-8664

12. The Center for Women & Enterprise Centers in Boston and Worcester provide: Classes on how to write a business plan Support in launching your business Opportunities for networking with other business owners 2-hour topic-specific workshops One-on-one legal and business consulting Classes to support you in your job search Boston: ……………………… (617) 536-0700 Worcester: …………………… (508) 363-2300 CWE: www.cweonline.org

13. Financing Your Business What Banks Look For: • Owners and operators w/ good credit & character • Feasible business plan – Does it make sense and is it sufficiently thorough? • Management expertise and commitment necessary for success • Sufficient funds, including SBA guaranteed loan, to operate the business on a sound financial basis • Adequate equity investment in the business – borrower’s stake in the business • Sufficient collateral – does it provide sufficient protection to the lender? • Repayment – Will the loan repay from earning of the business For be eligible for an SBA Loan, Businesses must: • Be operated for profit • Not exceed SBA size standards • Not engage in lending, real-estate development, investments or speculation

14. 7a Guaranteed Loan Made by private lenders, with SBA guarantee. SBA helps the bank get to the YES decision. Maximum loan size $5 million • 85% guaranty on loans below $150,000. • 75% guaranty on loans above $150,000. 7(a) loans may be used to: • Purchase machinery, equipment, fixtures, buildings, land; • Finance receivables and augment working capital; • Refinance existing debt (with compelling reason); • Finance seasonal lines of credit; and/or • Expand, renovate facilities; • Construct commercial buildings.

15. Why Do Lenders Use the SBA Guaranty? • Longer maturities are needed • Collateral may be inadequate to meet normal underwriting • Start-up or certain types of businesses • Business leverage • Lender’s legal or policy limit • Minimize risk Think Like a Lender! Terms: Flexible Maturities: • Up to 10 years for working capital • Up to 25 years for fixed assets Interest Rates: • Negotiated between borrower and lender • Typically, can not exceed Prime plus 2.75%

16. SBAExpress: • Most SBA guaranteed loans in Massachusetts are being made under express • Term loans or revolving lines of credit, up to $350,000. • SBA guarantee of 50% • User friendly program for bank and borrower • Uses lender’s forms, processes and procedures, not the SBA’s, which expedites loan approval and process.

17. SBA Micro-Loans Direct loans up to $50,000 • Interest rate of 6.0% fixed & up to 6 years to repay. • Includes technical assistance • Funds can be used for: • Working Capital • Inventory • Machinery & equipment • Furniture & fixtures • Refinancing of business credit card debt

18. 504 Loans in a Nutshell: Think BIG! What? - Great for capital assets. Long-term financing for major fixed assets - think BIG! - Obtain up to 90% financing and a low fixed rate on the CDC/SBA portion. - Below market pricing with minimum cash injection. - Owner occupancy = 51% for existing building; 60% for new construction (plan to occupy additional 20%). - Up to $5.5 million in SBA-backed debentures How?Apply through SBA approved certified development company. They take care of all SBA paperwork!

19. All SBA 7(a) Loans of $150,000 or less have: • NO Guaranty fee • NO on-going servicing fee for the lender • 51.9 basis points for loans above $150,000 • ALL SBA Express loans to VETERANS* • No guaranty fee up to $350,000 • Loans from $350,000 up to $5,000,000 • only assessed 50% of the regular fee Extended thru 9/30/15 *Veterans, National Guard, Reservist and spouses of the above are eligible.

20. SBA Partnerships • Chambers of Commerce • Other Federal Agencies • Lenders/CDC’s • TA Service Providers • Commonwealth of MA • Colleges/universities • Elected officials • Economic Development organizations • Business, professional and trade organizations And always looking for new relationships

21. Challenges • Time – the more notice we have; the more we can assist – proactive vs. reactive; • Starting or acquiring a business takes time and planning to be successful; • Owners that start businesses out of desperation face several risks; • Staffing challenges within SBA;

22. USEFUL WEBSITES