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YOUR SMALL BUSINESS RESOURCE

YOUR SMALL BUSINESS RESOURCE. Leroy Harris Robert McLoone Business Development Specialists U.S. Small Business Administration 400 North 8th Street, Richmond, VA 23219 (804) 771 2400 Leroy.harris@sba.gov Robert.mcloone@sba.gov WWW.SBA.GOV/VA. 2008-2009 - SCORE

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YOUR SMALL BUSINESS RESOURCE

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  1. YOUR SMALL BUSINESS RESOURCE Leroy Harris Robert McLoone Business Development Specialists U.S. Small Business Administration 400 North 8th Street, Richmond, VA 23219 (804) 771 2400 Leroy.harris@sba.gov Robert.mcloone@sba.gov WWW.SBA.GOV/VA 2008-2009 - SCORE Small Business Workshop 1

  2. What DO THESE COMPANIES HAVE IN COMMON??? 2

  3. www.sba.gov/va

  4. www.sba.gov

  5. www.sba.gov www.sba.gov

  6. FINANCIAL ASSISTANCE • SBA does NOT provide grants www.grants.gov or www.cfda.gov Grants are a form of funding for specific federal research and social programs. Contrary to popular belief, there are no federal grants made specifically for the purpose of starting a business. • SBA does NOT make DIRECT loans except under its Disaster lending • SBA DOES PROVIDE: Loan Guaranty to banks to encourage banks to make loans to businesses

  7. Financial Assistance • 7(a) Loan Program • Term Loans • Lines of credit • Fixed and variable rated • 504 Loan Program • Long Term Fixed Rate only 7

  8. Financial Assistance 504 & 7(a) Loan Guaranty SBA General Eligibility Criteria • Must be for profit Not engaged in lending, real-estate development, investments or speculation • Must be small www.sba.gov/size • Must have a sound business purpose • Good Creditwww.annualcreditreport.com • Good Character • Equity Investment (Reasonable) 8

  9. Financial Assistance 7(a) Loan Guaranty Loan proceeds can be used for any reasonable business purpose Equipment Debt refinancing Inventory Business purchase Working Capital Real estate Franchise (www.franchiseregistry.com) 9

  10. Financial Assistance 7(a) Loan Guaranty • Working Capital 5-7 years • Real Estate up to 25 years • Machinery useful life of asset • Just about everything else is 10 years SBA Loan Maturity policy* 10 *Shortest term reasonable but with maximum maturities allowable

  11. Financial Assistance 7(a) Loan Guaranty • Terms < 7 years: Prime +2 1/4% • Terms > 7 years: Prime +2 3/4% Higher Rates MAY apply for: • SBAExpress Loans & • Loans <less $50,000 SBA Interest Rate policy 11

  12. Financial Assistance 7(a) Loan Guaranty Maximum $2,000,000 loan limit • SBA CommunityExpress - $250,000 • (Generally limited to 5,000 - $25,000 up to $50,000) • SBAExpress: $350,000 • SBA PATRIOT Express: $500,000 12

  13. Financial Assistance 7(a) Loan Guaranty SBAExpress • Uses lender’s forms — not SBA’s • Loans or lines of credit to $350,000 (Export Express up to $250,000) • SBA guaranty of 50% • 36-hour response from the SBA 13

  14. Financial Assistance Community Express Loan Program • Loans up to $250,000 Historically however loans have been $5,000 - $25,000 up to $50,000 • No business plan or collateral in some cases • No early payment penalty. • Seven years term. • MUST Contact a T/A Provider for Technical Assistance FOR ADDITIONAL INFORMATION GO TO The “Financing" link at WWW.SBA.GOV/VA 14

  15. Loans are available up to $500,000 • SBA maximum guaranty: • 85 percent for loans of $150,000 or less • 75 percent for loans over $150,000 • ALL loans above $350,000: • Lenders required to take all available collateral • The Patriot Express loan can be used: • most business purposes • start-up or expansions 15

  16. Financial Assistance 504 Loan Program Certified Development Companies Maximum SBA/504 Debenture Financing*** $1,500,000 • $2,000,000 for Public Policy Loans • $4,000,000 for Small Manufacturers ***Excluding the bank financing and equity injection FOR A LIST OF MICRO LENDERS IN VA www.sba.gov/va “Financing” Link 16

  17. Financial Assistance 504 Loan Program Certified Development Companies • Fixed asset financing only • Long term - 10 or 20 years • Low fixed rate of interest • Generally requires job creation Typical 504 Structure Bank financing MUST fund 50% of cost CDC/SBA up to 30-40% of project Business normally invests 10-20% 17

  18. Financial Assistance Other Financial Assistance Programs • SBA loans money to intermediary lender • The Intermediary lends up to $35,000 • Intermediary provides management assistance MICRO LOANPROGRAM • May not be used for real estate • May not be used for debt payment • Maximum term is 6 years • The average loan is $10,000 - $15,000 FOR A LIST OF MICRO LENDERS IN VA www.sba.gov/va “Financing” Link 18

  19. Financial Assistance ABC’s Ability to Manage Business plan that makes sense Cash Flow aka Repayment ability Collateral (to the extent it is available) Credit that is reasonable 19

  20. GET STARTED Before going to a lender for a loan: • Obtain a copy of your credit report • Clear up any errors • Clear up any derogatory information • GET your accounts current • Do your research • Prepare a Business Plan GET HELP !!!! (SCORE - SBDC - WBC) Contact an SBA Lender: List of active SBA lenders in VA www.sba.gov/vets click on ‘Financing” SBA RESOURCE GUIDES www.sbaguides.com 20

  21. SBA’s TECHNICAL ASSISTANCE RESOURCE PARTNERS • SCORE • 11 chapters in Virginia • www.score.org • VA Small Business Development Centers • 29 centers in the Virginia • www.virginiasbdc.org • Women’s Business Centers • Richmond and Springfield, VA • www.nvnv.org www.wbcnova.org 21

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