1 U.S. Small Business Administration and IEEE-USA Special webinar for IEEE-USA members The SBA Advantage Resources and Programs for Success
2 U.S. Small Business Administration and IEEE-USA Presenter: Penny Pickett SBA Associate Administrator for Entrepreneurial Development The Office of Entrepreneurial Development s mission is to help small businesses start, grow, and compete in global markets by providing quality training, i counseling, and access to resources. A training network of over 12,000 volunteer and professional business counselors and 2,000 locations throughout h t the U.S.
3 Expanding Your Business Millions of entrepreneurs use SBA resources and programs to Grow their businesses Effectively compete in the marketplace Have you explored the Small Business Advantage?
4 Expanding Your Business Do you need assistance managing your business? Developing a business plan Making contacts Accessing resources Completing loan applications
5 Expanding Your Business The SBA and its resource partners provide business counseling and training i across the country. SCORE Small Business Development Centers Women s Business Centers Small Business Training Network SBA District Offices
6 Financing Options for Your Business SBA financial assistance programs can help pyou: Grow your business Export your goods and services Recover from a disaster SBA is primarily il a guarantor of loans made by private and other institutions. The SBA does not offer grants to start or grow small businesses.
7 Do You Know Your Financing Options? Loans for inventory and working capital Loans for land and buildings Surety bonds for small and minority construction contractors Venture capital investing Export assistance Disaster assistance
8 SBA Loan Approval Considerations Owners and operators of good character Feasible business plan Management expertise and commitment necessary for success Sufficient funds, including SBA guaranteed loan, to operate the business on a sound financial basis Adequate equity invested in the business Sufficient collateral Ability to repay the loan on time from the projected operating cash flow
9 The 7(a) Loan Program SBA s primary business loan program Broad eligibility requirements Wide range of financing needs Maximum loan amount of $2 million Maximum guaranty of $1.5 million 75% from $150, to $1.5 million 85% of $150,000 or less
10 Uses for 7(a) Loan Proceeds Expansion/renovation Land/equipment/fixtures purposes Working capital Inventory Other
11 7(a) Loan Program Maturities Maximum maturities 5-10 years for working capital, machinery, equipment Up to 25 years for real estate, construction
12 The 7(a) Loan Program Interest Rates and Fees Vary with the amount of loan Vary with the type of loan Vary with the length of loan
13 CommunityExpress Streamlined business financing and management & technical assistance Available to selected lenders Available in pre-designated geographical areas Designed to meet the needs of mostly low- and moderate-income areas and new markets small businesses Maximum loan amounts: $250,000
14 SBAExpress Maximum loan amount: $350,000 Maximum guaranty: 50% Uses: revolving line of credit/ term loan Maximum interest: Prime +6.5% for less than $50,000; Prime +4.5% for more than $50,000 Guaranty fees: vary with amount/ type of loan
15 Patriot Express Initiative Loan Can be used for: Start-up Expansion Equipment purchases Working capital Inventory purchases Business real-estate purchases
16 Patriot Express Initiative Loan Loans up to $500,000 for military community members, including: Veterans Service-disabled veterans Soon to be discharged active-duty service members eligible for the military s Transition Assistance Program Reservists and National Guard members Current spouses of any of the above The widowed spouse of a service member The widowed spouse of a service member or veteran who died during service or of a service-connected disability
17 Patriot Express Initiative Loan Patriot Express loans qualify for the SBA s maximum guaranty: 85 percent for loans of $150,000 or less 75 percent for loans over $150,000 up to $500,000 Lenders are required to take all available collateral for loans between $350, and $500,000
18 CAPLines Loans Short-term, cyclical working capital Maximum loan amount: $2 million Maximum guaranty 75% if More Than $150,000 85% if Less Than $150,000 Uses: short-term/seasonal revolving line of credit Maturity: up to 5 years Maximum interest: vary with amount/type/ length of loan Guaranty fees: vary with amount/ type of loan
19 Microloans Maximum loan amount: $35,000 Maximum guaranty: N/A Uses: purchase machinery, equipment, fixtures, working capital, leasehold improvements, increased receivables Maturity: shortest term possible (6 years or less) Maximum interest: negotiable with intermediary Guaranty fees: none
20 504/Certified Development Company Maximum loan amount: $1.2 to $4 million Maximum guaranty: 50% Project costs: financed by 504 Loan 40% lender finances 50% equity finances 10-20% Uses: long-term; fixed assets Maturity: generally years Maximum interest: fixed rate established when debenture backing sold Guaranty fees: 0.5% upfront fee to SBA; other factors may apply
21 International Trade Financing 96% of the world s customers reside outside the U.S. Conducting foreign business is easier than ever Global communications enhance business opportunities
22 International Trade Loan Program Maximum loan amount: $2 million Maximum guaranty: 75% if more than $150,000 85% if less than $150,000 Uses: acquiring long-term, fixed assets or refinancing debt for that purpose Maturity: up to 25 years Maximum interest: vary with amount/ type/length e of loan
23 Export Working Capital Program Maximum loan amount: $2 million (may be combined with International Trade Loan) Maximum guaranty: 90% up to $1.5 million Uses: short-term working capital for exporters Maturity: generally 1 year or 1 transaction cycle Maximum interest: no cap G t f ith t/t / Guaranty fees: vary with amount/type/ length of loan
24 Small Business Investment Company Program Uses own funds plus funds obtained at favorable rates with SBA guarantees. Provides equity capital, long-term loans, debt-equity investments and management assistance. Funds all types of manufacturing and service-industry businesses.
25 The Surety Bond Guarantee Program SBA has two program options available: Prior Approval Program (Plan A): SBA guarantees 90% of a surety s paid losses, expenses on bonded contracts up to $100,000 and on bonds for socially and economically disadvantaged HUBZone contractors and veterans & service-disabled veterans. All other bonds guaranteed in the Plan A program receive an 80% guarantee. Preferred Surety Bond Program (Plan B) SBA guarantees 70%, but sureties may issue, monitor and service bonds without SBA s prior approval.
26 Small Business Innovation Research Program Reserves a percentage of government R&D funds for small businesses Participating agencies: Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Transportation; Environmental Protection Agency; NASA and the National Science Foundation
27 Small Business Technology Transfer Program Reserves a percentage of government R&D funds for small businesses and nonprofit research institutions Participating agencies: p g g Departments of Defense, Energy, Health and Human Services; NASA and the National Science Foundation
28 Federal Contracting The HUBZone Program Set asides Sole-source awards Price evaluation preference
29 The HUBZone Program A qualified tract A qualified non-metropolitan county Indian Country To qualify: Must be a small business by SBA size standards; Must have its principal office located within a Historically Underutilized Business Zone, including federally recognized Indian reservations; Must be at least 51% owned and controlled by U.S. citizens, a community development corporation, an agricultural cooperative or an Indian tribe; and Must have at least 35% of its employees residing in a HUBZone
30 The 8(a) Business Development Program Programs for women, disadvantaged individuals, service-disabled veterans and others. Assistance to businesses located in disadvantaged areas competing for government contracts. The Small Disadvantaged Business Certification Program. Management and/or technical assistance.
31 Disaster Recovery for Homeowners & Renters Low-interest loans may be used to: Restore primary residences to pre-disaster conditions Repair or replace uninsured personal property
32 Disaster Recovery for Businesses Physical Disaster Loans for Businesses Loans of up to $1.5 million Businesses of any size Economic Injury Disaster Loans Loans of up to $1.5 million Covers necessary operating expenses curtailed by the disaster Military Reservist Economic Injury Disaster Loans Loans of up to $1.5 million Covers necessary operating expenses because owner or essential employee is federally activated Loans mature after essential employee is released from active duty
33 Your Voice in Government The SBA Office of Advocacy works to ensure federal rules and regulations do not unfairly affect small business. The SBA Office of National Ombudsman assists small businesses subjected to unfair audits, fines or enforcement actions.
34 SBA on the Internet Easy-to-find information to help small businesses start, grow and succeed. Small Business Training Network an online virtual it campus offering free courses, workshops and resources. The official resource to help businesses find: Compliance information Forms Contacts at government agencies
35 Your SBA For more information about your local SBA resources go to: