SMALL BUSINESS RESOURCE - United States
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The Small Business Resource Guide is published
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  • 1. BUSINESSRESOURCERESOURCESMALLSMALLNATIONALSPRING 2012www.SBA.gov • connect with us @ facebook.com/SBAgov twitter.com/sbagov youtube.com/sbaBuilding on SBA’sRecord Yearpage 31CounselingCapitalContractingPAGE5PAGE10PAGE21
  • 2. SMALL BUSINESScontentsSPRING NATIONAL ‘12AdvertisingPhone: 863-294-2812 • 800-274-2812Fax: 863-299-3909 • www.sbaguides.comStaffPresident/CEOJoe Jensen jjensen@reni.netEnglish Small Business Resource AdvertisingNicky Harvey nharvey@reni.netMartha Theriault mtheriault@reni.netKenna Rogers krogers@reni.netProductionDiane Traylor dtraylor@reni.netSBA’s Marketing Office:The Small Business Resource Guide is publishedunder the direction of SBA’s Office of Marketing andCustomer Service.Director of MarketingPaula Panissidi paula.panissidi@sba.govEditorial Content marketinghq@sba.govGraphic DesignGary Shellehamer gary.shellehamer@sba.govSBA’s participation in this publication is not anendorsement of the views, opinions, products orservices of the contractor or any advertiser or otherparticipant appearing herein. All SBA programsand services are extended to the public on anondiscriminatory basis.Printed in the United States of AmericaWhile every reasonable effort has been madeto ensure that the information contained hereinwas accurate as of the date of publication, theinformation is subject to change without notice.Neither the contractor, the federal government,or agents thereof shall be held liable for anydamages arising from the use of or reliance on theinformation contained in this publication.SBA Publication # MCS-0018This publication is provided under SBA Contract# SBAHQ05C0014.ReniPublishingPublishers of Small Business ResourceFEATURES4 Administrator’s Letter5 Counseling Getting help to start up, market and manage your business. 5 SBA Resource Partners 6 SBA’s Online Tools and Training 7 Reaching Underserved Communities 8 Are You Right for Small Business Ownership? 9 Writing a Business Plan 10 Capital Financing options to start or grow your business. 10 SBA Business Loans 12 What to Take to the Lender 17 Small Business Investment Company Program 17 Small Business Innovation Research Program 17 Small Business Technology Transfer Program 17 Surety Bond Guarantee Program 19 SBA Loan Program Chart21 Contracting Applying for Government Contracts. 21 How Government Contracting Works 22 SBA Contracting Programs 24 Getting Started in Contracting25 Disaster Knowing the types of assistance available for recovery.26 Advocacy and Ombudsman Watching out for small businessinterests.27 Additional Resources Taking care of start up logistics. 30 Business Organization: Choosing your Structure31 Feature: Building on SBA’s Record Year42 SBA Local Directory Quick and easy way to find any of the 68 districts at your finger tips.On the Cover: Mountain West Precast crewmember Colton Fletcher makes a precast highwaybarrier. Owned by Stephanie Loud, MWP is aconcrete precast company located in Ogden, Utah.As part of SBA’s 8(a) program MWP has grownfrom a staff of 2 to 14 employees in only seven yearsas a state and federal contractor.See more on Mountain West Precaston pg. 40Mountain West Precast crewmember Colton Fletcher.Visit us online: www.sba.gov2 Small Business Resource
  • 3. 2011 was a record year forthe SBA. We helped over60,000 small businessessecure over $30 billion inlending through our flagship7(a) and 504 programs – anall-time record. We alsoworked with private-sectorpartners to drive a recordamount of capital ($2.8 billion) into thehands of over 1,000 high-growth businessesthrough Small Business InvestmentCompanies.As we entered 2012, the President signeda six-year extension of the Small BusinessInnovation Research program whichsupports small R&D companies that driveinnovation and game-changing technologiesto keep America on the cutting edge. Wealso continue to streamline the paperworkon SBA loans in order to help more lendingpartners and their small-business customers.You can check out all of these programs inthis guide. Also, be sure to take a look at allof the SBA’s 2011 accomplishments in thelast few pages.As our economy continues to strengthen in2012, the Obama Administration is focusedon making sure that entrepreneurs and smallbusiness owners have the tools they needto grow and create jobs. After all, half ofworking Americans either own or work for asmall business, and two of every three newjobs are created by small businesses.Finally, check out our online tools. Forexample, at www.sba.gov/direct you cantype in your zip code and a few details aboutyour business, and you’ll immediately getconnected to SBA resources in your localarea.America’s small businesses are gearing upto lead our nation’s economic recovery andcreate the jobs we need now. Please feel freeto contact your local SBA office if you haveany questions. We stand ready to help inwhatever way we can.Sincerely,Karen G. MillsAdministratorSmall Business AdministrationEvery year, the U.S. Small Business Administration and its nationwidenetwork of partners help millions of potential and current smallbusiness owners start, grow and succeed.Resources and programs targeting small businesses provide anadvantage necessary to help small businesses compete effectively inthe marketplace and strengthen the overall U.S. economy.SBA offers help in the following areas: • Counseling • Capital • Contracting • Disaster Assistance • Advocacy and the OmbudsmanVisit SBA online at www.sba.gov for 24/7 access to small businessnews, information and training for entrepreneurs.All SBA programs and services are provided on a nondiscriminatorybasis.About the SBAwww.sba.govYour Small Business ResourceFROM THE ADMINISTRATORThe U.S. Small Business AdministrationVisit us online: www.sba.gov4 Small Business Resource
  • 4. Visit us online: www.sba.gov Small Business Resource 5COUNSELINGEvery year, the U.S. SmallBusiness Administrationand its nationwide networkof resource partners helpmillions of potential andexisting small business owners start,grow and succeed. Whether your target market is globalor just your neighborhood, the SBA andits resource partners can help at everystage of turning your entrepreneurialdream into a thriving business. If you’re just starting out, the SBAand its resources can help you withloans and business management skills.If you’re already in business, you canuse the SBA’s resources to help manageand expand your business, obtaingovernment contracts, recover fromdisaster, find foreign markets, andmake your voice heard in the federalgovernment. You can access SBA information atwww.sba.gov or visit one of our localoffices for assistance.SBA’S RESOURCEPARTNERS In addition to our district offices whichserve every state and territory, SBAworks with a variety of local resourcepartners to meet your small businessneeds. These professionals can helpwith writing a formal business plan,locating sources of financial assistance,managing and expanding your business,finding opportunities to sell your goodsor services to the government, andrecovering from disaster. To find yourlocal district office or SBA resourcepartner, visit www.sba.gov/sba-direct.SCORE SCORE is a national network ofover 14,000 entrepreneurs, businessleaders and executives who volunteer asmentors to America’s small businesses.SCORE leverages decades of experiencefrom seasoned business professionalsto help small businesses start, growcompanies and create jobs in localcommunities. SCORE does this byharnessing the passion and knowledgeof individuals who have owned andmanaged their own businesses and wantto share this “real world” expertise withyou. Found in more than 370 offices and800 locations throughout the country,SCORE provides key services – bothface-to-face and online – to busyentrepreneurs who are just gettingstarted or in need of a seasonedbusiness professional as a soundingboard for their existing business. Asmembers of your community, SCOREmentors understand local businesslicensing rules, economic conditions andimportant networks. SCORE can helpyou as they have done for more than9 million clients by:• Matching your specific needs with abusiness mentor• Traveling to your place of business foran on-site evaluation• Teaming with several SCORE mentorsto provide you with tailored assistancein a number of business areas Across the country, SCORE offersnearly 7,000 local business trainingworkshops and seminars rangingin topic and scope depending on theneeds of the local business communitysuch as offering an introduction tothe fundamentals of a business plan,managing cash flow and marketing yourbusiness. For established businesses,SCORE offers more in-depth trainingin areas like customer service, hiringpractices and home-based businesses. For around-the-clock business adviceand information on the latest trends goto the SCORE website (www.score.org).More than 1,500 online mentors withover 800 business skill sets answer yourquestions about starting and running abusiness. In fiscal year 2011, SCOREmentors served 400,000 entrepreneurs. For information on SCORE and to getyour own business mentor, visitwww.sba.gov/score, go to www.SCORE.orgor call 1-800-624-0245 for the SCOREoffice nearest you.SMALL BUSINESSDEVELOPMENT CENTERS The U.S. Small BusinessAdministration’s Small BusinessDevelopment Center (SBDC) program’smission is to build, sustain, andpromote small business developmentand enhance local economies bycreating businesses and jobs. Thisis accomplished by the provision andensuing oversight of grants to colleges,universities and state governments sothat they may provide business adviceand training to existing and potentialsmall businesses. The Small Business DevelopmentCOUNSELINGGetting Help to Start Up, Market and Manage Your Business• You get to be your own boss.• Hard work and long hours directly benefit you,rather than increasing profits for someone else.• Earnings and growth potential are unlimited.• Running a business will provide endlessvariety, challenge and opportunities to learn.ON THE UPSIDEIt’s true, there are a lot ofreasons not to start yourown business. But for theright person, the advantagesof business ownership faroutweigh the risks.
  • 5. Visit us online: www.sba.gov6 Small Business ResourceCenter program, vital to SBA’sentrepreneurial outreach, has beenproviding service to small businessesfor more than 30 years. It is one of thelargest professional small businessmanagement and technical assistancenetworks in the nation. With over 900locations across the country, SBDCsoffer free one-on-one expert businessadvice and low-cost training by qualifiedsmall business professionals to existingand future entrepreneurs. In addition to its core services, theSBDC program offers special focus areassuch as, green business technology,disaster recovery and preparedness,international trade assistance, veteran’sassistance, technology transfer andregulatory compliance. The program combines a uniquemix of federal, state and privatesector resources to provide, in everystate and territory, the foundationfor the economic growth of smallbusinesses. The return on investmentis demonstrated by the program during2011:• Assisted more than 13,660 entrepreneursto start new businesses – equating to 37new business starts per day.• Provided counseling services to over106,000 emerging entrepreneurs andnearly 100,000 existing businesses.• Provided training services toapproximately 353,000 clients. The efficacy of the SBDC programhas been validated by a nationwideimpact study. Of the clients surveyed,more than 80 percent reported that thebusiness assistance they received fromthe SBDC counselor was worthwhile.Similarly, more than 50 percent reportedthat SBDC guidance was beneficial inmaking the decision to start a business.More than 40 percent of long-termclients, those receiving 5 hours or moreof counseling, reported an increasein sales and 38 percent reported anincrease in profit margins. For information on the SBDCprogram, visit www.sba.gov/sbdc.WOMEN’S BUSINESS CENTERS The SBA’s Women Business Center(WBC) program is a network of 110community-based centers which providebusiness training, coaching, mentoringand other assistance geared towardwomen, particularly those who aresocially and economically disadvantaged.WBCs are located in nearly every stateand U.S. territory and are partiallyfunded through a cooperative agreementwith the SBA. To meet the needs of womenentrepreneurs, WBCs offer servicesat convenient times and locations,including evenings and weekends.WBCs are located within non-profit hostorganizations that offer a wide varietyof services in addition to the servicesprovided by the WBC. Many of theWBCs also offer training and counselingand provide materials in differentlanguages in order to meet the diverseneeds of the communities they serve. WBCs often deliver their servicesthrough long-term training or groupcounseling, both of which have shown tobe effective. WBC training courses areoften free or are offered at a small fee.Some centers will also offer scholarshipsbased on the client’s needs While most WBCs are physicallylocated in one designated location, anumber of WBCs also provide coursesand counseling via the Internet, mobileclassrooms and satellite locations. WBCs have a track record of success.In fiscal year 2011, the WBC programcounseled and trained nearly 139,000clients, creating local economic growthand vitality. In addition, WBCs helpedentrepreneurs access more than $134million dollars in capital, representinga 400% increase from the previous year.Of the WBC clients that have received 3or more hours of counseling, 15 percentindicated that the services led to hiringnew staff, 34 percent indicated thatthe services led to an increased profitmargin, and 47 percent indicated thatthe services led to an increase in sales. In addition, the WBC program hastaken a lead in preparing womenbusiness owners to apply for theWomen-Owned Small Business(WOSB) Federal Contract programthat authorizes contracting officers toset aside certain federal contracts foreligible women-owned small businessesor economically disadvantaged women-owned small businesses. For moreinformation on the program, visitwww.sba.gov/wosb. To find the nearest SBA WBC, visitwww.sba.gov/women.EMERGING LEADERS(e200) INITIATIVESBA’s Emerging Leaders (e200)Initiative is currently hosted in 27markets across the country using anationally demonstrated research-basedcurriculum that supports the growth anddevelopment of small to medium-sizedfirms that have substantial potentialfor expansion and community impact.A competitive selection process resultsin company executives participating inhigh-level training and peer-networkingsessions led by professional instructors.Post-training, social and economicimpact results from respondingexecutives who participated in the 2008– 2010 training classes indicate:• More than half of participatingbusinesses reported an increase inrevenue, with an average revenue of$1,879,266.• Participating businesses averaged $2million in revenue, with new cumulativefinancing of $7.2 million secured in 2010.• Nearly half of the participants securedfederal, state, local and tribal contractswith a cumulative total of $287 million.• Approximately half of the participantshave hired new workers, creating 275new jobs in 2010.• All participants were trained onbecoming SBA 8(a) certified firms;nearly 25 percent of respondents arecurrently certified as SBA 8(a) firms,while other participants reported afocused intention on applying to the 8(a)program.• Nearly 50 percent of participatingrespondents were female executivesand 70 percent were minority businessexecutives.• 85 percent of responding executiveswere Satisfied or Very Satisfied with theoverall training series and results.To find out more about this executive-level training opportunity, pleasevisit www.sba.gov/e200 for host cities,training schedules, and selectioncriteria.SBA’S ONLINETOOLS AND TRAINING SBA’s Small Business TrainingNetwork is a virtual campus completewith free online courses, workshops,podcasts, learning tools and business-readiness assessments.Key Features of the Small BusinessTraining Network:Training is available anytime andanywhere — all you need is a computerwith Internet access.• More than 30 free online courses andworkshops available.• Templates and samples to get yourbusiness planning underway.• Online, interactive assessment tools arefeatured and used to direct clients toappropriate training. Course topics include a financialprimer keyed around SBA’s loan-guarantee programs, a course onexporting, and courses for veteransand women seeking federalcontracting opportunities, as well asan online library of podcasts, businesspublications, templates and articles. Visit www.sba.gov/training for thesefree resources.COUNSELING
  • 6. Visit us online: www.sba.gov Small Business Resource 7 SBA also offers a number of programsspecifically designed to meet the needsof the underserved communities.WOMEN BUSINESS OWNERS Women entrepreneurs are changingthe face of America’s economy. In the1970s, women owned less than fivepercent of the nation’s businesses. Today, they are majority ownersof about a third of the nation’s smallbusinesses and are at least equal ownersof about half of all small businesses.SBA serves women entrepreneursnationwide through its various programsand services, some of which are designedespecially for women. The SBA’s Office of Women’s BusinessOwnership (OWBO) serves as anadvocate for women-owned businesses.OWBO oversees a nationwide networkof 110 women’s business centers thatprovide business training, counselingand mentoring geared specifically towomen, especially those who are sociallyand economically disadvantaged. Theprogram is a public-private partnershipwith locally-based nonprofits. Women’s Business Centers servea wide variety of geographic areas,population densities, and economicenvironments, including urban,suburban, and rural. Local economiesvary from depressed to thriving, andrange from metropolitan areas to entirestates. Each Women’s Business Centertailors its services to the needs of itsindividual community, but all offer avariety of innovative programs, oftenincluding courses in different languages.They provide training in finance,management, and marketing, as well asaccess to all of the SBA’s financial andprocurement assistance programs.CENTER FOR FAITH-BASED ANDNEIGHBORHOODPARTNERSHIPS Faith-Based and NeighborhoodPartnerships know their communities,and they have earned the communitiestrust. Because of their credibility,they are uniquely positioned to buildawareness of programs that encourageentrepreneurship, economic growth andjob creation. SBA is committed to reachingout to faith-based and communityorganizations that are eligible toparticipate in the agency’s programs byinforming their congregants, membersand neighbors about SBA’s programs.In particular, many faith-based andcommunity non-profit organizationscan provide a local financing optionfor entrepreneurs by becoming SBAMicroloan Intermediaries. An SBAMicroloan Intermediary often acts asa bank for entrepreneurs and smallbusinesses that might otherwise beunable to find access to capital.VETERANS AND RESERVISTSBUSINESS DEVELOPMENT Veterans, service-disabled veteransand Reserve and National Guardmember entrepreneurs receivespecial consideration in all of SBA’sentrepreneurial programs and resources.Each year, the Office of VeteransBusiness Development (OVBD)reaches thousands of veterans, ReserveComponent members, transitioningservice members and others who are –or who want to become – entrepreneursand small business owners. OVBDdevelops and distributes informationalmaterials for entrepreneurship such asthe Veterans Business Resource Guide,VETGazette, and Getting VeteransBack to Work. In addition, thereare 16 Veterans Business OutreachCenters strategically located throughoutthe country that provide both onlineand in-person training, counseling,mentoring, workshops, referrals, andmore. Each of the SBA’s 68 DistrictOffices also has a designated veteran’sbusiness development officer. The SBA offers special assistance forsmall businesses owned by activatedReserve and National Guard members.Any self-employed Reserve or Guardmember with an existing SBA loan canrequest from their SBA lender or SBAdistrict office loan payment deferrals,interest rate reductions and other reliefafter they receive their activation orders.In addition, the SBA offers speciallow-interest-rate financing to smallbusinesses when an owner or essentialemployee is called to active duty. TheMilitary Reservist Economic InjuryDisaster Loan Program (MREIDL)provides loans up to $2 million to eligiblesmall businesses to cover operating coststhat cannot be met due to the loss of anessential employee called to active dutyin the Reserves or National Guard. Among the SBA’s unique services forveterans are: an Entrepreneurship BootCamp for Veterans with Disabilities inpartnership with 6 top U.S. universities(www.whitman.syr.edu/ebv), a programto reach women veteran-entrepreneurs(www.syr.edu/vwise) , and a program forReserve Component family memberscalled Operation Endure and Grow(www.whitman.syr.edu/endureandgrow). For more information about smallbusiness lending programs for veteranbusiness owners and Reserve orGuard members who are activated,including Patriot Express, microloans,and Advantage loans, see the sectionon Access to Capital. To learn moreabout the Veterans Business Outreachprogram or find the nearest SBA VBOC,visit www.sba.gov/vets.NATIVE AMERICANBUSINESS DEVELOPMENT The SBA Office of Native AmericanAffairs (ONAA) ensures AmericanIndians, Alaska Natives and NativeHawaiians seeking to create, developand expand small businesses havefull access to the necessary businessdevelopment and expansion toolsavailable through the agency’sentrepreneurial development, lending,and contracting programs. ONAAprovides a network of training (includingthe online tool “Small BusinessPrimer: Strategies for Growth”) andcounseling services and engages innumerous outreach activities, such astribal consultations, development anddistribution of educational materials,attendance and participation ineconomic development events andassisting these small businesses withSBA programs. Visit www.sba.gov/naa for moreinformation.REACHING UNDERSERVED COMMUNITIESCOUNSELING
  • 7. Visit us online: www.sba.gov8 Small Business Resource Most new business owners whosucceed have planned for every phaseof their success. Thomas Edison, thegreat American inventor, once said,“Genius is 1 percent inspiration and99 percent perspiration.” That samephilosophy also applies to starting abusiness. First, you’ll need to generate a littlebit of perspiration deciding whetheryou’re the right type of person to startyour own business.IS ENTREPRENEURSHIPFOR YOU? There is simply no way to eliminateall the risks associated with startinga small business, but you can improveyour chances of success with goodplanning, preparation, and insight.Start by evaluating your strengthsand weaknesses as a potential ownerand manager of a small business.Carefully consider each of the followingquestions:• Are you a self-starter? It will beentirely up to you to develop projects,organize your time, and followthrough on details.• How well do you get along withdifferent personalities? Businessowners need to develop workingrelationships with a variety ofpeople including customers, vendors,staff, bankers, employees, andprofessionals such as lawyers,accountants, or consultants. Canyou deal with a demanding client,an unreliable vendor, or a crankyreceptionist if your business interestsdemand it?• How good are you at makingdecisions? Small business owners arerequired to make decisions constantly– often quickly, independently, andunder pressure.• Do you have the physical andemotional stamina to run abusiness? Business ownership canbe exciting, but it’s also a lot of work.Can you face six or seven 12–hourworkdays every week?• How well do you plan andorganize? Research indicates thatpoor planning is responsible for mostbusiness failures. Good organization— of financials, inventory, schedules,and production — can help you avoidmany pitfalls.• Is your drive strong enough?Running a business can wear youdown emotionally. Some businessowners burn out quickly from havingto carry all the responsibility for thesuccess of their business on theirown shoulders. Strong motivationwill help you survive slowdowns andperiods of burnout.• How will the business affectyour family? The first few years ofbusiness start-up can be hard onfamily life. It’s important for familymembers to know what to expectand for you to be able to trust thatthey will support you during thistime. There also may be financialdifficulties until the business becomesprofitable, which could take monthsor years. You may have to adjust to alower standard of living or put familyassets at risk. Once you’ve answered thosequestions, you should consider whattype of business you want to start.Businesses can include franchises,at-home businesses, online businesses,brick-and-mortar stores or anycombination of those.FRANCHISING There are more than 3,000 businessfranchises. The challenge is to decideon one that both interests you and isa good investment. Many franchisingexperts suggest that you comparisonshop by looking at multiple franchiseopportunities before deciding on theone that’s right for you. Some of the things you shouldlook at when evaluating a franchise:historical profitability, effectivefinancial management and othercontrols, a good image, integrity andcommitment, and a successful industry. In the simplest form of franchising,while you own the business, itsoperation is governed by the terms ofthe franchise agreement. For many,this is the chief benefit for franchising.You are able to capitalize on a businessformat, trade name, trademark and/or support system provided by thefranchisor. But you operate as anindependent contractor with the abilityto make a profit or sustain a losscommensurate with your ownership. If you are concerned about startingan independent business venture, thenfranchising may be an option for you.Remember that hard work, dedicationand sacrifice are key elements inthe success of any business venture,including a franchise. Visit www.sba.gov/franchise for moreinformation.HOME-BASED BUSINESSES Going to work used to meantraveling from home to a plant, store oroffice. Today, many people do some orall their work at home.Getting Started Before diving headfirst into a home-based business, you must know whyyou are doing it. To succeed, yourbusiness must be based on somethinggreater than a desire to be yourown boss. You must plan and makeimprovements and adjustments alongthe road. Working under the same roof whereyour family lives may not prove to beas easy as it seems. One suggestion isto set up a separate office in your hometo create a professional environment.Ask yourself these questions:• Can I switch from homeresponsibilities to business workeasily?• Do I have the self-discipline tomaintain schedules while at home?• Can I deal with the isolation ofworking from home?Legal Requirements A home-based business is subject tomany of the same laws and regulationsaffecting other businesses.Some general areas include:• Zoning regulations. If your businessoperates in violation of them, youcould be fined or shut down.• Product restrictions. Certainproducts cannot be produced in thehome. Most states outlaw homeproduction of fireworks, drugs,poisons, explosives, sanitary ormedical products and toys. Somestates also prohibit home-basedbusinesses from making food, drinkor clothing. Be sure to consult an attorney andyour local and state departmentsof state, labor and health to findout which laws and regulations willaffect your business. Additionally,check on registration and accountingrequirements needed to open yourhome-based business. You may needa work certificate or license from thestate. Your business name may needto be registered with the state. Aseparate business telephone and bankaccount are good business practices. Also remember, if you haveemployees you are responsible forwithholding income and social-security taxes, and for complying withminimum wage and employee healthand safety laws.ARE YOU RIGHT FOR SMALL BUSINESS OWNERSHIP?COUNSELING
  • 8. Visit us online: www.sba.gov Small Business Resource 9WRITING A BUSINESS PLAN After you’ve thought about whattype of business you want, thenext step is to develop a businessplan. Think of the business planas a roadmap with milestonesfor the business. It begins as apre-assessment tool to determineprofitability and market share, thenexpands as an in-business assessmenttool to determine success, obtainfinancing and determine repaymentability, among other factors. Creating a comprehensive businessplan can be a long process, and youneed good advice. The SBA and itsresource partners, including SmallBusiness Development Centers,Women’s Business Centers, VeteransBusiness Outreach Centers, andSCORE, have the expertise to help youcraft a winning business plan. SBAalso offers online templates to get youstarted. In general, a good business plancontains:Introduction• Give a detailed description of thebusiness and its goals.• Discuss ownership of the businessand its legal structure.• List the skills and experience youbring to the business.• Discuss the advantages you and yourbusiness have over competitors.Marketing• Discuss the products and servicesyour company will offer.• Identify customer demand for yourproducts and services.• Identify your market, its size andlocations.• Explain how your products andservices will be advertised andmarketed.• Explain your pricing strategy.Financial Management• Develop an expected return oninvestment and monthly cash flow forthe first year.• Provide projected income statements, and balance sheets for a two-year period.• Discuss your break-even point.• Explain your personal balance sheetand method of compensation.• Discuss who will maintain youraccounting records and how they willbe kept.• Provide “what if” statementsaddressing alternative approaches topotential problems.Operations• Explain how the business will bemanaged day-to-day.• Discuss hiring and personnelprocedures.• Discuss insurance, lease or rentagreements, and issues pertinent toyour business.• Account for the equipment necessaryto produce your goods or services.• Account for production and deliveryof products and services.Concluding Statement Summarize your business goalsand objectives and express yourcommitment to the success of yourbusiness. Once you have completedyour business plan, review it witha friend or business associate andprofessional business counselorlike SCORE, WBC or SBDCrepresentatives, SBA district officebusiness development specialistsor veterans business developmentspecialists. Remember, the business plan is aflexible document that should changeas your business grows.COUNSELING
  • 9. Visit us online: www.sba.gov10 Small Business ResourceMany entrepreneurs needfinancial resources to startor expand a small businessthemselves and mustcombine what they havewith other sources of financing. Thesesources can include family and friends,venture-capital financing, and businessloans. This section of the Small BusinessResource guide discusses SBA’s primarybusiness loan and equity financingprograms. These are: the 7(a) LoanProgram, the Certified DevelopmentCompany or 504 Loan Program, theMicroloan Program and the SmallBusiness Investment CompanyProgram. The distinguishing featuresfor these programs are the total dollaramounts that can be borrowed, the typeof lenders who can provide these loans,the uses for the loan proceeds, and theterms placed on the borrower. Note: The SBA does not offer grantsto individual business owners to start orgrow a business.SBA BUSINESS LOANS If you are contemplating a businessloan, familiarize yourself with theSBA’s business loan programs to seeif they may be a viable option. Keepin mind the dollar amount you seek toborrow and how you want to use theloan proceeds. The three principalplayers in most of these programs arethe applicant small business, the lenderand the SBA. SBA guarantees a portionof the loan (except for Microloans).The business should have its businessplan prepared before it applies for aloan. This plan should explain whatresources will be needed to accomplishthe desired business purpose includingthe associated costs, the applicants’contribution, use of loan proceeds,collateral, and, most important, anexplanation of how the business willbe able to repay the loan in a timelymanner. The lender will analyze theapplication to see if it meets the lender’scriteria and SBA’s requirements. SBAwill look to the lender to do much, if notall, of the analysis before it providesits guaranty on the lender’s loan. Inthe case of microlenders, SBA loansthese intermediaries funds at favorablerates to re-lend to businesses withfinancing needs up to $50,000. TheSBA’s business loan programs provide akey source of financing for viable smallbusinesses that have real potential butcannot qualify for long-term, stablefinancing.7(a) LOAN PROGRAM The 7(a) Loan program is the SBA’sprimary business loan program. Itis the agency’s most frequently usednon-disaster financial assistanceprogram because of its flexibility inloan structure, variety of loan proceeduses, and availability. The program hasbroad eligibility requirements and creditcriteria to accommodate a wide range offinancing needs. The business loans that SBAguarantees do not come from theagency, but rather from banks and otherapproved lenders. The loans are fundedby these organizations, and they makethe decisions to approve or not approvethe applicants’ requests. The SBA guaranty reduces thelender’s risk of borrower non-payment.If the borrower defaults, the lendercan request SBA to pay the lender thatpercentage of the outstanding balanceguaranteed by SBA. This allows thelender to recover a portion from SBA ofwhat it lent if the borrower can’t makethe payments. The borrower is stillobligated for the full amount. To qualify for an SBA loan, a smallbusiness must meet the lender’scriteria and the 7(a) requirements. Inaddition, the lender must certify that itwould not provide this loan under theproposed terms and conditions unlessit can obtain an SBA guaranty. If theSBA is going to provide a lender witha guaranty, the applicant must beeligible and creditworthy and the loanstructured under conditions acceptableto SBA.Percentage of Guarantiesand Loan Maximums The SBA only guarantees a portion ofany particular loan so each loan will alsohave an unguaranteed portion, givingthe lender a certain amount of exposureand risk on each loan. The percentageSBA guarantees depends on either thedollar amount or the program the lenderuses to obtain its guaranty. For loans of$150,000 or less the SBA may guarantyas much as 85 percent and for loansover $150,000 the SBA can provide aguaranty of up to 75 percent. The maximum 7(a) loan amountis $5 million. (Loans made underthe SBAExpress program, which isdiscussed later in this section, have a 50percent guaranty.)Interest Rates and Fees The actual interest rate for a 7(a)loan guaranteed by SBA is negotiatedbetween the applicant and lender andCAPITALFinancing Options to Start or Grow Your BusinessCAPITAL
  • 10. Visit us online: www.sba.gov Small Business Resource 11subject to SBA maximums. Both fixedand variable interest rate structuresare available. The maximum rate iscomprised of two parts, a base rate andan allowable spread. There are threeacceptable base rates (Wall StreetJournal Prime*, London Interbank OneMonth Prime plus 3 percent, and anSBA Peg Rate). Lenders are allowedto add an additional spread to the baserate to arrive at the final rate. Forloans with maturities of less than sevenyears, the maximum spread will be nomore than 2.25 percent. For loans withmaturities of seven years or more, themaximum spread will be 2.75 percent.The spread on loans under $50,000and loans processed through Expressprocedures may be higher. Loans guaranteed by SBA areassessed a guaranty fee. This fee isbased on the loan’s maturity and thedollar amount guaranteed, not thetotal loan amount. The guaranty fee isinitially paid by the lender and thenpassed on to the borrower at closing.The funds to reimburse the lender canbe included in the loan proceeds. On any loan with a maturity of oneyear or less, the fee is just 0.25 percentof the guaranteed portion of the loan.On loans with maturities of more thanone year, the normal guaranty fee is 2percent of the SBA guaranteed portionon loans up to $150,000; 3 percent onloans over $150,000 but not more than$700,000; and 3.5 percent on loans over$700,000. There is also an additionalfee of 0.25 percent on any guaranteedportion over $1 million.* All references to the prime raterefer to the base rate in effect on thefirst business day of the month theloan application is received by SBA.7(a) Loan Maturities SBA loan programs are generallyintended to encourage longer term smallbusiness financing, but actual loanmaturities are based on the ability torepay, the purpose of the loan proceedsand the useful life of the assets financed.However, maximum loan maturitieshave been established: 25 years for realestate; up to 10 years for equipment(depending on the useful life of theequipment); and generally up to sevenyears for working capital. Short-termloans and revolving lines of credit arealso available through the SBA to helpsmall businesses meet their short-termand cyclical working capital needs.Structure Most 7(a) loans are repaid withmonthly payments of principal andinterest. For fixed-rate loans thepayments stay the same, whereasfor variable rate loans the lender canre-establish the payment amountwhen the interest rates change or atother intervals, as negotiated withthe borrower. Applicants can requestthat the lender establish the loan withinterest-only payments during thestart-up and expansion phases (wheneligible) to allow the business time togenerate income before it starts makingfull loan payments. Balloon paymentsor call provisions are not allowed on any7(a) loan. The lender may not charge aprepayment penalty if the loan is paidoff before maturity, but the SBA willcharge the borrower a prepayment feeif the loan has a maturity of 15 or moreyears and is pre-paid during the firstthree years.Collateral The SBA expects every 7(a) loan tobe fully secured, but the SBA will notdecline a request to guaranty a loan ifthe only unfavorable factor is insufficientcollateral, provided all availablecollateral is offered. What these twoCAPITAL
  • 11. Visit us online: www.sba.gov12 Small Business Resourcepolicies mean is that every SBA loanis to be secured by all available assets(both business and personal) until therecovery value equals the loan amountor until all assets have been pledgedto the extent that they are reasonablyavailable. Personal guaranties arerequired from all the principal owners ofthe business. Liens on personal assets ofthe principals may be required.Eligibility 7(a) loan eligibility is based on fourdifferent factors. The first is size, asall loan recipients must be classified as“small” by SBA. The basic size standardsare outlined below. A more in-depthlisting of standards can be found atwww.sba.gov/size.SBA Size Standards have the followinggeneral ranges:• Manufacturing — from 500 to 1,500employees• Wholesale Trades — Up to 100employees• Services — $2 million to $35.5 millionin average annual receipts• Retail Trades — $7 million to $35.5million in average annual receipts• Construction — $7 million to $33.5million in average annual receipts• Agriculture, Forestry, Fishing, andHunting — $750,000 to $17.5 millionin average annual receipts There is an alternate size standardfor businesses that do not qualify undertheir industry size standards for SBAfunding – tangible net worth($15 million or less) and average netincome ($5 million or less for twoyears). This new alternate makesmore businesses eligible for SBA loansand applies to SBA non-disaster loanprograms, namely its 7(a) BusinessLoans and Development Companyprograms.Nature of Business The second eligibility factor is basedon the nature of the business and theprocess by which it generates income orthe customers it serves. The SBA hasgeneral prohibitions against providingfinancial assistance to businessesinvolved in such activities as lending,speculating, passive investment,pyramid sales, loan packaging,presenting live performances of aprurient sexual nature, businessesinvolved in gambling and any illegalactivity. The SBA also cannot loan guarantiesto non-profit businesses, private clubsthat limit membership on a basisother than capacity, businesses thatpromote a religion, businesses owned byindividuals incarcerated or on probationor parole, municipalities, and situationswhere the business or its ownerspreviously failed to repay a federal loanor federally assisted financing. Documentation requirements mayvary; contact your lender for theinformation you must supply.Common requirements include thefollowing:• Purpose of the loan• History of the business• Financial statements for three years(existing businesses)• Schedule of term debts (existingbusinesses)• Aging of accounts receivable andpayable (existing businesses)• Projected opening-day balance sheet(new businesses)• Lease details• Amount of investment in the businessby the owner(s)• Projections of income, expenses andcash flow as well as an explanation ofthe assumptions used to develop theseprojections• Personal financial statements on theprincipal owners• Resume(s) of the principal owners andmanagers.How the 7(a) Program Works Applicants submit their loanapplication to a lender for the initialreview. The lender will generallyreview the credit merits of the requestbefore deciding if they will make theloan themselves or if they will need anSBA guaranty. If a guaranty is needed,the lender will also review eligibility.The applicant should be prepared tocomplete some additional documentsbefore the lender sends the requestfor guaranty to the SBA. Applicantswho feel they need more help with theprocess should contact their local SBAdistrict office or one of SBA’s resourcepartners for assistance. There are several ways a lendercan apply for a 7(a) guaranty fromSBA. The main differences betweenthese methods are related to thedocumentation which the lenderprovides, the amount of review whichSBA conducts, the amount of the loanand the lender responsibilities in casethe loan defaults and the business’assets must be liquidated. The methodsare:• Standard 7(a) Guaranty• Certified Lender Program• Preferred Lender Program• Rural Lender Advantage• SBA Express• Patriot Express• Export Express• Small Loan Advantage• Community Advantage For the Standard, Certified andPreferred methods, the applicantfills out SBA Form 4, and the lendercompletes SBA Form 4-1. Whenrequests for guarantees are processedusing Express or Advantage methods,the applicant uses more of the regularforms of the lender and just has a fewfederal forms to complete. When SBAreceives a request that is processedthrough Standard or CertifiedLender Program procedures, it eitherreanalyzes or reviews the lender’seligibility and credit analysis beforedeciding to approve or reject. Forrequests processed through PreferredLender Program or Express programs,the lender is delegated the authority tomake the credit decision without SBA’sconcurrences, which helps expedite theprocessing time. In guaranteeing the loan, the SBAassures the lender that, in the event theborrower does not repay the loan, thegovernment will reimburse the lendinginstitution for a portion of its loss. Byproviding this guaranty, the SBA isable to help tens of thousands of smallbusinesses every year get financingthey might not otherwise obtain. After SBA approval, the lenderis notified that its loan has beenguaranteed. The lender then willwork with the applicant to make surethe terms and conditions are metbefore closing the loan, disbursing thefunds, and assuming responsibilityfor collection and general servicing.The borrower makes monthly loanpayments directly to the lender. As withany loan, the borrower is responsible forrepaying the full amount of the loan ina timely manner.What the SBA Looks for:• Ability to repay the loan on time fromthe projected operating cash flow;• Owners and operators who are of goodcharacter;• Feasible business plan;• Management expertise andcommitment necessary for success;• Sufficient funds, including the SBAguaranteed loan, to operate thebusiness on a sound financial basis(for new businesses, this includes theresources to meet start-up expensesand the initial operating phase);• Adequate equity invested in thebusiness; and• Sufficient collateral to secure the loanor all available collateral if the loancannot be fully secured.What To Take To The LenderCAPITAL
  • 12. Visit us online: www.sba.gov Small Business Resource 13Use of Proceeds The third eligibility factor is use ofproceeds. 7(a) proceeds can be usedto: purchase machinery; equipment;fixtures; supplies; make leaseholdimprovements; as well as land and/orbuildings that will be occupied by thebusiness borrower.Proceeds can also be used to:• Expand or renovate facilities;• Acquire machinery, equipment,furniture, fixtures and leaseholdimprovements;• Finance receivables and augmentworking capital;• Finance seasonal lines of credit;• Acquire businesses;• Start up businesses;• Construct commercial buildings; and• Refinance existing debt under certainconditions. SBA 7(a) loan proceeds cannot be usedfor the purpose of making investments.SBA proceeds cannot be used toprovide funds to any of the ownersof the business except for ordinarycompensation for actual servicesprovided.Miscellaneous Factors The fourth factor involves a varietyof requirements such as SBA’s creditelsewhere test and utilization ofpersonal assets requirements, where thebusiness and its principal owners mustuse their own resources before getting aloan guaranteed by SBA. It also includesSBA’s anti-discrimination rules andlimitations on lending to agriculturalenterprises because there are otheragencies of the federal government withprograms to fund such businesses.Generally, SBA loans must meet thefollowing criteria:• Every loan must be for a soundbusiness purpose;• There must be sufficient investedequity in the business so it can operateon a sound financial basis;• There must be a potential for long-term success;• The owners must be of good characterand reputation; and• All loans must be so sound as toreasonably assure repayment. For more information, go towww.sba.gov/apply.SPECIAL PURPOSE7(a) LOAN PROGRAMS The 7(a) program is the most flexibleof SBA’s lending programs. The agencyhas created several variations to thebasic 7(a) program to address theparticular financing need of certainsmall businesses. These special purposeprograms are not necessarily for allbusinesses but may be very usefulto some small businesses. They aregenerally governed by the same rules,regulations, fees, interest rates, etc. asthe regular 7(a) loan guaranty. Lenderscan advise you of any variations.SBAExpressThe SBAExpress guaranty is availableto lenders as a way to obtain a guarantyon smaller loans up to $350,000.The program authorizes selected,experienced lenders to use mostly theirown forms, analysis and proceduresto process, service and liquidate SBA-guaranteed loans. The SBA guaranteesup to 50 percent of an SBAExpress loan.Loans under $25,000 do not requirecollateral. The use of loan proceeds isthe same as for any basic 7(a) loan. Likemost 7(a) loans, maturities are usuallyfive to seven years for working capitaland up to 25 years for real estate orequipment. Revolving lines of credit areallowed for a maximum of seven years.Patriot Express and OtherLending Programs For Veterans The Patriot Express pilot loaninitiative is for veterans and membersof the military community wanting toestablish or expand a small business.Eligible military community membersinclude:• Veterans;• Service-disabled veterans;• Active-duty servicemembers eligiblefor the military’s Transition AssistanceProgram;• Reservists and National Guardmembers;• Current spouses of any of the above,including any servicemember;• The widowed spouse of a servicememberor veteran who died during service or ofa service-connected disability.The Patriot Express loan is offeredby SBA’s nationwide network ofprivate lenders and features the fastestturnaround time for loan approvals.Loans are available up to $500,000 andqualify for SBA’s maximum guaranty of85 percent for loans of $150,000 or lessand 75 percent for loans over $150,000up to $500,000. For loans above$350,000, lenders are required to eitherobtain all collateral or enough collateralso the value is equal to the loan amount,whichever comes first. The Patriot Express loan can be usedfor most business purposes, includingstart-up, expansion, equipmentpurchases, working capital, andinventory or business-occupied real-estate purchases. Patriot Express loans feature SBA’slowest interest rates for business loans,generally 2.25 percent to 4.75 percentover prime depending upon the sizeand maturity of the loan. Your localSBA district office will have a listing ofPatriot Express lenders in your area.More information is available atwww.sba.gov/patriotexpress. Self-employed Reserve or Guardmembers with an existing SBA loan canrequest from their SBA lender or SBAdistrict office, loan payment deferrals,interest rate reductions and other reliefafter they receive their activation orders.The SBA also offers special low-interest-rate financing of up to $2 million whenan owner or essential employee is calledto active duty through the MilitaryReservist Economic Injury DisasterLoan program (MREIDL) to help coveroperating costs due to the loss of anessential employee called to active duty.Rural Lender AdvantageThe Small/Rural Lender Advantage(S/RLA) initiative is designed toaccommodate the unique loan processingneeds of small community/rural-basedlenders by simplifying and streamliningloan application process and procedures,particularly for smaller SBA loans. Itis part of a broader SBA initiative topromote the economic development oflocal communities, particularly thosefacing the challenges of populationloss, economic dislocation, and highunemployment. Visit www.sba.gov/content/rural-business-loans for moreinformation.Advantage Loans In early 2011, SBA rolled out twoAdvantage loan initiatives aimedat helping entrepreneurs and smallbusiness owners in underservedcommunities gain access to capital.Both offer a streamlined loan applicationprocess and the regular 7(a) loanguarantee for loans under $250,000. The Small Loan Advantage programis available to lenders participating inthe Preferred Lenders Program. SBAlenders who are not participating in thePreferred Lenders Program can contacttheir local district office to apply. The Community Advantage pilotprogram opens up 7(a) lending tomission-focused, community-basedlenders – such as CommunityDevelopment Financial Institutions(CDFIs), Certified DevelopmentCompanies (CDCs), and microlenders– who provide technical assistanceand economic development support inunderserved markets. More information on both programs isavailable at www.sba.gov/advantage.CAPITAL
  • 13. Visit us online: www.sba.gov14 Small Business ResourceCAPLines The CAPLines program is designedto help small businesses meet theirshort-term and cyclical working capitalneeds. The programs can be used tofinance seasonal working capital needs;finance the direct costs of performingcertain construction, service and supplycontracts, subcontracts, or purchaseorders; finance the direct cost associatedwith commercial and residentialconstruction; or provide general workingcapital lines of credit. SBA provides upto an 85 percent guarantee. There arefour distinct loan programs under theCAPLine umbrella:• The Contract Loan Program is usedto finance the cost associated withcontracts, subcontracts, or purchaseorders. Proceeds can be disbursedbefore the work begins. If used for onecontract or subcontract, it is generallynot revolving; if used for more thanone contract or subcontract at a time,it can be revolving. The loan maturityis usually based on the length of thecontract, but no more than ten years.Contract payments are generally sentdirectly to the lender but alternativestructures are available.• The Seasonal Line of Credit Programis used to support buildup of inventory,accounts receivable or labor andmaterials above normal usage forseasonal inventory. The businessmust have been in business for aperiod of 12 months and must have adefinite established seasonal pattern.The loan may be used over againafter a “clean-up” period of 30 daysto finance activity for a new season.These also may have a maturity of upto five years. The business may nothave another seasonal line of creditoutstanding but may have other linesfor non-seasonal working capital needs.• The Builders Line Program providesfinancing for small contractors ordevelopers to construct or rehabilitateresidential or commercial property.Loan maturity is generally threeyears but can be extended up tofive years, if necessary, to facilitatesale of the property. Proceeds areused solely for direct expenses ofacquisition, immediate constructionand/or significant rehabilitationof the residential or commercialstructures. The purchase of the landcan be included if it does not exceed 20percent of the loan proceeds. Up to 5percent of the proceeds can be used forphysical improvements that benefit theproperty.• The Working Capital Line isa revolving line of credit (up to$5,000,000) that provides short termworking capital. These lines aregenerally used by businesses thatprovide credit to their customers.Disbursements are generallybased on the size of a borrower’saccounts receivable and/or inventory.Repayment comes from the collectionof accounts receivable or sale ofinventory. The specific structure isnegotiated with the lender. There maybe extra servicing and monitoring ofthe collateral for which the lender cancharge up to two percent annually tothe borrower.International Trade Loan Program The SBA’s International Trade Loan(ITL) provides small businesses withenhanced export financing options fortheir export transactions. It is designedto help small businesses enter andexpand into international marketsand, when adversely affected by importcompetition, make the investmentsnecessary to better compete. The ITLoffers a combination of fixed asset,working capital financing and debtrefinancing with the SBA’s maximumguaranty--- 90 percent --- on the totalloan amount. The maximum loanamount is $5 million in total financing.Guaranty CoverageThe SBA can guaranty up to 90percent of an ITL up to a maximumof $4.5 million, less the amount ofthe guaranteed portion of other SBAloans outstanding to the borrower. Themaximum guaranty for any workingcapital component of an ITL is $4million. Additionally, any other workingcapital SBA loans the borrower has arecounted against the $4 million guarantylimit.Use of Proceeds• For the facilities and equipmentportion of the loan, proceeds maybe used to acquire, construct,renovate, modernize, improve orexpand facilities or equipmentin the U.S. to produce goods orservices involved in internationaltrade.• Working capital is an allowableuse of proceeds under the ITL.• Proceeds may be used for therefinancing of debt structuredwith unreasonable terms andconditions, including any debt thatqualifies for refinancing under thestandard SBA 7(a) Loan Program.Loan Term• Maturities on the working capitalportion of the ITL are typically limitedto 10 years.• Maturities of up to 10 years onequipment unless the useful life exceeds10 years.• Maturities of up to 25 years areavailable for real estate.• Loans with a mixed use of fixed-assetand working-capital financing will havea blended-average maturity.Interest Rates Lenders may charge between 2.25 to2.75 percent above the prime rate (aspublished in the Wall Street Journal)depending upon the maturity of theloan. Interest rates on loans of $50,000and less can be slightly higher.Exporter Eligibility• Applicants must meet the sameeligibility requirements as for the SBA’sstandard 7(a) Loan Program.• Applicants must also establish thatthe loan will allow the business toexpand or develop an export market or,demonstrate that the business has beenadversely affected by import competitionand that the ITL will allow the businessto improve its competitive position.Foreign Buyer Eligibility Foreign buyers must be located inthose countries wherein the Export-Import Bank of the U.S. is notprohibited from providing financialassistance.Collateral Requirements• Only collateral located in theU.S. (including its territories andpossessions) is acceptable.• First lien on property or equipmentfinanced by the ITL or on other assetsof the business is required. However,an ITL can be secured by a second lienposition if the SBA determines there isadequate assurance of loan payment.• Additional collateral, includingpersonal guaranties and those assetsnot financed with ITL proceeds, maybe appropriate.CAPITAL
  • 14. Visit us online: www.sba.gov Small Business Resource 15How to Apply• A small business seeking an ITL mustapply to an SBA-participating lender.The lender will submit a completedApplication for Business Loan (SBAForm 4), including all exhibits, to theSBA. Visit www.sba.gov to find yourlocal SBA district office for a list ofparticipating lenders.• A small business exporter wanting toqualify as adversely impacted fromimport competition must submitsupporting documentation that explainsthat impact, and a plan with projectionsthat explains how the loan will improvethe business’ competitive position.Export ExpressSBA Export Express offers flexibilityand ease of use to both borrowers andlenders. It is the simplest export loanproduct offered by the SBA and allowsparticipating lenders to use their ownforms, procedures and analyses. TheSBA provides the lender with a responsewithin 36 hours. This loan is subject to the sameloan processing, closing, servicing andliquidation requirements as well as thesame maturity terms, interest rates andapplicable fees as for other SBA loans(except as noted below).Guaranty Coverage The SBA provides lenders with a90 percent guaranty on loans up to$350,000 and a 75 percent guarantyon loans more than $350,000 up to themaximum of $500,000.Use of Proceeds Loan proceeds may be used forbusiness purposes that will enhance acompany’s export development. ExportExpress can take the form of a termloan or a revolving line of credit. Asan example, proceeds can be used tofund participation in a foreign tradeshow, finance standby letters of credit,translate product literature for use inforeign markets, finance specific exportorders, as well as to finance expansions,equipment purchases, and inventory orreal estate acquisitions, etc.Ineligible Use of Proceeds Proceeds may not be used to financeoverseas operations other than those strictly associated with the marketingand/or distribution of products/servicesexported from the U.S.Exporter Eligibility Any business that has been inoperation, although not necessarily inexporting, for at least 12 full months andcan demonstrate that the loan proceedswill support its export activity is eligiblefor Export Express.Foreign Buyer Eligibility The exporter’s foreign buyer must bea creditworthy entity and the methods ofpayment must be acceptable to the SBAand the SBA lender.How to Apply Interested businesses should contacttheir existing lender to determine if theyare an SBA Express lender. Lendersthat participate in SBA’s Expressprogram are also able to make ExportExpress loans. Application is madedirectly to the lender. Lenders use theirown application material in additionto SBA’s Borrower Information Form.Lenders’ approved requests are thensubmitted with a limited amount ofeligibility information to SBA’s NationalLoan Processing Center for review.Export Working Capital Program The SBA’s Export Working CapitalProgram (EWCP) assists lenders inmeeting the needs of exporters seekingshort-term export working capital.Exporters can apply for EWCP loansin advance of finalizing an export saleor contract. With an approved EWCPloan in place, exporters have greaterflexibility in negotiating export paymentterms — secure in the assurance thatadequate financing will be in place whenthe export order is won.Benefits of the EWCP• Financing for suppliers, inventory orproduction of export goods.• Export working capital during longpayment cycles.• Financing for stand-by letters of creditused as bid or performance bonds ordown payment guarantees.• Reserves domestic working capital forthe company’s sales within the U.S.• Permits increased global competitivenessby allowing the exporter to extend moreliberal sales terms.• Increases sales prospects in under-developed markets which have highcapital costs for importers.• Low fees and quick processing times.Guaranty Coverage• Maximum loan amount is $5,000,000.• 90 percent of principal and accruedinterest up to 120 days.• Low guaranty fee of one-quarter of onepercent of the guaranteed portion forloans with maturities of 12 months orless.• Loan maturities are generally for 12months or less.Use of Proceeds• To pay for the manufacturing costs ofgoods for export.• To purchase goods or services for export.• To support standby letters of credit toact as bid or performance bonds.• To finance foreign accounts receivable.Interest Rates The SBA does not establish orsubsidize interest rates on loans. Theinterest rate can be fixed or variable andis negotiated between the borrower andthe participating lender.Advance Rates• Up to 90 percent on purchase orders.• Up to 90 percent on documentary lettersof credit.• Up to 90 percent on foreign accountsreceivable.• Up to 75 percent on eligible foreigninventory located within the U.S.• In all cases, not to exceed the exporter’scosts.Collateral Requirements The export-related inventory and thereceivables generated by the exportsales financed with EWCP funds willbe considered adequate collateral. TheSBA requires the personal guaranteeof owners with 20 percent or moreownership.How to apply Application is made directly to SBA-participating lenders. Businesses areencouraged to contact SBA staff at theirlocal U.S. Export Assistance Center(USEAC) to discuss whether they areeligible for the EWCP and whether it isthe appropriate tool to meet their exportfinancing needs. Participating lendersreview/approve the application andsubmit the request to SBA staff at thelocal USEAC.U.S. Export Assistance Center There are 20 U.S. Export AssistanceCenters located throughout theU.S. They are staffed by SBA, U.S.Department of Commerce and Export-Import Bank of the U.S. personnel,and provide trade promotion andexport-finance assistance in a singlelocation. The USEACs also work closelywith other federal, state and localinternational trade organizations toprovide assistance to small businesses.To find your nearest USEAC, visit:www.sba.gov/content/us-export-assistance-centers. You can find additional exporttraining and counseling opportunities bycontacting your local SBA office.CAPITAL
  • 15. Visit us online: www.sba.gov16 Small Business ResourceCERTIFIED DEVELOPMENTCOMPANY LOAN PROGRAM(504 LOANS) The 504 Loan program is an economicdevelopment program that supportsAmerican small business growth andhelps communities through businessexpansion and job creation. This SBAprogram provides long-term, fixed-rate, subordinate mortgage financingfor acquisition and/or renovation ofcapital assets including land, buildingsand equipment. Some refinancing isalso permitted. Most for-profit smallbusinesses are eligible for this program.The types of businesses excluded from7(a) loans (listed previously) are alsoexcluded from the 504 loan program. Loans are provided through CertifiedDevelopment Companies. CDCs workwith banks and other lenders to makeloans in first position on reasonableterms, helping lenders retain growingcustomers and provide CommunityRedevelopment Act credit. The SBA 504 loan is distinguishedfrom the SBA 7(a) loan program in theseways:The maximum debenture, or long-termloan, is:• $5 million for businesses that create acertain number of jobs or improve thelocal economy;• $5 million for businesses that meet aspecific public policy goal, includingveterans; and• $5.5 million for manufacturers andenergy public policy projects.Recent additions to the program allow$5.5 million for each project that reducesthe borrower’s energy consumption byat least 10 percent; and $5.5 million foreach project that generates renewableenergy fuels, such as biodiesel or ethanolproduction. Projects eligible for up to$5.5 million under one of these tworequirements do not have to meet thejob creation or retention requirement, solong as the CDC portfolio average is atleast $65,000.• Eligible project costs are limitedto long-term, fixed assets such asland and building (occupied by theborrower) and substantial machineryand equipment. Working capital is notan eligible use of proceeds, except in atemporary program which is scheduledto expire on September 27, 2012.• Most borrowers are required to makean injection (borrower contribution)of just 10 percent which allowsthe business to conserve valuableoperating capital. A further injectionof 5 percent is needed if the businessis a start-up or new (less than 2years old), and a further injection of 5percent is also required if the primarycollateral will be a single purposebuilding (such as a hotel).• Two-tiered project financing: A lenderfinances approximately 50 percent ofthe project cost and receives a firstlien on the project assets (but no SBAguaranty); A CDC (backed by a 100percent SBA-guaranteed debenture)finances up to 40 percent of the projectcosts secured with a junior lien. Theborrower provides the balance of theproject costs.• Fixed interest rate on SBA loan. SBAguarantees the debenture 100 percent.Debentures are sold in pools monthlyto private investors. This low, fixedrate is then passed on to the borrowerand establishes the basis for the loanrate.• All project-related costs can befinanced, including acquisition (landand building, land and construction ofbuilding, renovations, machinery andequipment) and soft costs, such as titleinsurance and appraisals. Some closingcosts may be financed.• Collateral is typically a subordinatelien on the assets financed; allowsother assets to be free of liens andavailable to secure other neededfinancing.• Long-term real estate loans are up to20-year term, heavy equipment 10 - or20-year term and are self-amortizing.Businesses that receive 504 loans are:• Small — net worth under $15 million,net profit after taxes under $5 million, ormeet other SBA size standards.• Organized for-profit.• Most types of business — retail, service,wholesale or manufacturing. The SBA’s 504 certified developmentcompanies serve their communities byfinancing business expansion needs.Their professional staffs work directlywith borrowers to tailor a financingpackage that meets program guidelinesand the credit capacity of the borrower’sbusiness. For information, visitwww.sba.gov/504.MICROLOAN PROGRAM The Microloan program providessmall loans ranging from under $500to $50,000 to women, low-income,minority, veteran, and other smallbusiness owners through a networkof approximately 160 intermediariesnationwide. Under this program, theSBA makes funds available to nonprofitintermediaries that, in turn, make thesmall loans directly to entrepreneurs,including veterans. Proceeds can beused for typical business purposes suchas working capital, or the purchase offurniture, fixtures, machinery, supplies,equipment, and inventory. Microloansmay not be used for the purchase of realestate. Interest rates are negotiatedbetween the borrower and theintermediary. The maximum term for amicroloan is 7 years. The program also provides business-based training and technical assistanceto microborrowers and potentialmicroborrowers to help them besuccessful at starting or growing theirbusinesses. Such training and technicalassistance may include general businesseducation, assistance with businessplanning industry-specific training,and other types of training support.Entrepreneurs and small businessowners interested in small amountsof business financing should contactthe nearest SBA District Office forinformation about the nearest MicroloanProgram Intermediary Lender or go towww.sba.gov/microloans.CAPITAL
  • 16. Visit us online: www.sba.gov Small Business Resource 17SMALL BUSINESSINVESTMENT COMPANYPROGRAM There are a variety of alternatives tobank financing for small businesses. TheSmall Business Investment Company(SBIC) program fills the gap betweenwhat owners can fund directly and theneeds of the small business for growthcapital. Licensed and regulated by theSBA, SBICs are privately owned andmanaged investment funds that makecapital available to qualifying U.S. smallbusinesses. The funds raise privatecapital and can receive SBA-guaranteedleverage up to 3x private capital, witha leverage ceiling of $150 million perSBIC and $225 million for two or morelicenses under common control. LicensedSBICs are for-profit investment firmswhose incentive is to share in thesuccess of a small business. The SBICprogram provides funding for a broadrange of industries. Some SBICs investin a particular field or industry whileothers invest more generally. For moreinformation, visit www.sba.gov/inv.SMALL BUSINESSINNOVATION RESEARCHPROGRAM The Small Business InnovationResearch (SBIR) program encouragessmall businesses to advance theirtechnical potential from fundscommitted by federal agencies with largeextramural research and developmentbudgets. The SBIR program servesto fund the critical startup anddevelopment stages for a technology andencourages commercialization of thetechnology, product or service. In turn,this stimulates the U.S. economy.SBIR Requirements Small businesses must meet thefollowing eligibility criteria to participatein the SBIR program.• Be 51 percent owned and controlled byone or more individuals who are U.S.citizens or permanent resident aliensin the U.S. or be a for-profit businessconcern that is at least 51 percentowned and controlled by anotherfor-profit business concern that is atleast 51 percent owned and controlledby one or more individuals who arecitizens of, or permanent residentaliens in, the U.S.• Be for-profit.• Principal researcher must be employedby the small business.• Company size cannot exceed 500employees. For more information on the SBIRprogram visit www.sba.gov/sbir.Participating Agencies Each year, the following elevenfederal departments and agencies arerequired to reserve 2.5 percent of theirextramural R&D funds for award tosmall businesses through the SBIRprogram: Departments of Agriculture;Commerce; Defense; Education; Energy;Health and Human Services; HomelandSecurity; Transportation; EnvironmentalProtection Agency; National Aeronauticsand Space Administration; and NationalScience Foundation.SMALL BUSINESSTECHNOLOGY TRANSFERPROGRAM The Small Business TechnologyTransfer (STTR) program reservesa specific percentage of federal R&Dfunding for award to small business andnon-profit research institution partners.Central to the program is expansion ofthe public/private sector partnership toinclude the joint venture opportunitiesfor small business and the nation’spremier nonprofit research institutions.Small business has long been whereinnovation and innovators thrive, butthe risk and expense of conductingserious R&D efforts can be beyondthe means of many small businesses.Non-profit research laboratoriesare also instrumental in developinghigh-tech innovations, but frequentlyinnovation is confined to the theoretical.STTR combines the strengths of bothentities by introducing entrepreneurialskills to high-tech research efforts.The technologies and products aretransferred from the laboratory to themarketplace. The small business profitsfrom the commercialization, which, inturn, stimulates the U.S. economy.STTR Requirements Small businesses must meet thefollowing eligibility criteria to participatein the STTR program.• Be 51 percent owned and controlled byone or more individuals who are U.S.citizens or permanent resident aliensin the U.S.• Be for-profit.• Principal researcher need not beemployed by the small business.• Company size cannot exceed 500employees. (No size limit for nonprofitresearch institution). The nonprofit research institutionpartner must also meet certaineligibility criteria:• Be located in the United Statesand be one of the following:• Nonprofit college or university.• Domestic nonprofit researchorganization.• Federally funded R&D center.Participating Agencies Each year the following five Federaldepartments and agencies are requiredby STTR to reserve 0.3 percent of theirextramural R&D funds for award tosmall business/nonprofit researchinstitution partnerships: Departmentof Defense; Department of Energy;Department of Health and HumanServices; National Aeronautics andSpace Administration; and NationalScience Foundation.SURETY BONDGUARANTEE PROGRAM The Surety Bond Guarantee programis a public-private partnership betweenthe federal government and suretycompanies to provide small businesseswith the bonding assistance necessaryfor them to compete for public andprivate contracting and subcontractingopportunities. The guarantee providesall incentive for sureties to bond smallbusinesses that would otherwise beunable to obtain bonding. The programis aimed at small businesses that lackthe working capital or performancetrack record necessary to secure bondingon a reasonable basis through regularcommercial channels. Through this program, the SBAguarantees bid, payment, performanceand ancillary bonds issued by suretycompanies for individual contracts andsubcontracts up to $2 million. TheSBA reimburses sureties between 70and 90 percent of losses sustained if acontractor defaults on the contract.The SBA has two program optionsavailable, the Prior Approval Program(Plan A) and the Preferred Surety BondProgram (Plan B). In the Prior ApprovalProgram, SBA guarantees 90 percentof surety’s paid losses and expenses onbonded contracts up to $100,000, and onbonded contracts greater than $100,000that are awarded to socially andeconomically disadvantaged concerns,HUBZone contractors, and veterans, andservice-disabled veteran owned smallbusinesses. All other bonds guaranteedin the Plan A Program receive an 80percent guarantee. Sureties must obtainSBA’s prior approval for each bondguarantee issued. Under Plan B, SBAguarantees 70 percent, but sureties mayissue, monitor and service bonds withoutSBA’s prior approval.CAPITAL
  • 17. Visit us online: www.sba.gov18 Small Business ResourceSOCIAL MEDIAAN ESSENTIAL PART OF YOURMARKETING TOOLKITSocial media marketing is a great toolfor engaging with customers, buildingyour company’s brand, and increasingyour business reach. However, manysmall business owners make themistake of using social media toolssuch as Twitter and Facebook forsimply pushing their messages out.They miss a key communications andmarketing opportunity by not listeningto or joining in the conversations thatare going on. In other words, theyignore the fundamental point of socialmedia - being SOCIAL!Just being on Twitter or Facebook isnot enough. It takes time and effort tobuild a strong social media presence.When it comes to growing your socialmedia presence and seeing a return onyour investment it is easier said thandone.Here’s are three hands-on tacticsthat you can use.1. Determine Where YourCustomers are Online andHow you Can Reach Thema. When considering social media as partof your overall marketing strategy,always start with asking the mostbasic questions: • What is it you want to achieve? • Where is your audience and will they respond?b. Next, make sure your target audienceis on Twitter, Facebook or whateversocial network you are considering,or you may spend a lot of time on achannel that won’t reach your target.You can do this in several ways: • Survey your customers. • Assess what your competition is doing. • Get involved with social networks on a personal level by exploring communities and Facebook fan pages. • Research trends in Twitter topics and try to build a picture of what your target market is doing and sharing on social networks.c. And don’t forget that while these toolsare free, your investment in them isn’t.It takes staff time and resources to usesocial media successfully.2. Use Twitter to Engage andEntice a. Instead of simply Tweeting for Tweeting’s sake, focus on making your Twitter strategy a rich and interactive experience. For example, use Tweets to start discussions on your products, special offers and events. Engage with followers by responding to mentions about your business; addressing their questions and inviting them to check out your website and so on. b. You can track mentions of your company or products in other Tweets using a Twitter application such as Tweetdeck or Hootsuite. c. Don’t be afraid to Tweet often. Anywhere between 5-10 Tweets a day is your target. Also remember to shake your message up. As every good marketer knows, tone and style are a huge factor in ensuring that your message stands out, resonates, and promotes action. Tweeting is like conversation, putting out static updates or statements will fall on flat ears, but engaging, teasing, querying, and showing interest will promote action. So shake your message up, use the words your audience uses, sprinkle in some hashtags and go on and tease a little. So, instead of saying: • We’re giving away 2 bagels for the price of one at BagelFest on Nov 25, 4-8 PM <LINK> Tweet this: • We know you love them! Get 2 bagels for the price of one on 11/25. Find out where <LINK>3. Use Facebook to its Fullest Effect As with Twitter, Facebook is a great way for engaging with people who like your brand, want to interact with your business, stay abreast of latest developments, and take advantage of giveaways, contests, surveys, etc. It is also invaluable for brand exposure. While having a Facebook presence doesn’t guarantee a huge uptick in visitors to your website, using it strategically to link back to online blogs, menus, event or newsletter registration landing pages and special offers, can improve site traffic.TIPS FOR INTERACTING WITH YOUR CUSTOMERSCAPITAL
  • 18. Visit us online: www.sba.gov Small Business Resource 19U.S. Small Business Administration Loan Programs, Page AInformation accurate as of 2/23/2012 • All SBA programs and services are provided on a nondiscriminatory basis.7(a) Loan ProgramProgram MaximumAmountUse ofProceedsMaximumInterest RateBenefit toBorrowersMaturity Structure Who QualifiesStandard 7(a):Applicant appliesfor business loanto lender; Lenderapplies to SBAfor guaranty oftheir proposedloan if theydetermine it isnecessary. Loanfrom lender, notSBA.$5 million to anyone business,including affiliatesExpansion/renovation;new construction,purchase land orbuildings; purchaseequipment, fixtures,lease-hold improve-ments; working capital;inventory, businessacquisition, startupsand refinancing undercertain conditions(discuss with lender).Depends on use ofproceeds and abilityto repay. Generallyworking capital andmachinery &equipment loanshave 5-10 years;real estate is upto 25 years. Termnegotiated withlender.SBA sets amaximum ratefor both variableand fixed ratesloans (discusswith lender orlocal SBA DistrictOffice for currentinformation).Term loan with onepayment of principaland interest (P&I)each month. Interestvariable or fixedas negotiated withlender. Cannot berevolving. SBAcharges a GuarantyFee **Mustbefor-profitandmeetSBAsizestandards;showgoodcharacter,credit,management,andabilitytorepay;mustbeaneligibletypeofbusiness,useproceedsforeligiblepurpose,anddemonstratethatcreditisnototherwiseavailable.Business able toobtain financing whichotherwise would not beprovided due to term,collateral, equity, and/ortime in business. Fixedmaturity; No balloons;No prepayment penaltyif maturity under 15years. Establish orre-affirm businessrelationship with alender.InternationalTrade: Long termfinancing to helpbusinessesengaged inexporting oradverselyimpacted byimports.Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Up to 10 years.Same asStandard 7(a).Same asStandard 7(a).Acquire, renovate,modernize facilitiesor equipment used inmaking products orservices to be exported,plus permanent workingcapital and refinancedebt not structured withreasonable terms.Same as Standard7(a). Maximum SBAguaranty amount forworking capital is $4million.Same as Standard7(a) plus businessesmust be engaged orpreparing to engagein internationaltrade or adverselyaffected bycompetition fromimports.Same as Standard7(a) plus long-termfinancing for fixedassets usedto produce productsor services for export.Export WorkingCapital Program:Single transactionor RevolvingWorking Capitallines of credit forexporters.Short-term,working-capital forexporters. Can besingle transaction orrevolving. StandbyLetters of Credit forexport purposes.Generally one year,but can be up to3 years to matcha single transactioncycle.Establishedby lender. NoSBA establishedmaximums.Short term revolvingline of credit basedon borrowingbase or exportpurchase orders.Monthly interestpayments; principalpayments based oncollection of foreignreceivables.Same as Standard7(a) plus musthave been inbusiness for atleast one year andpreparing to engagein or increaseinternational trade.Same as Standard7(a) plus providesworking capital toAmerican Exportersto perform on exporttransactions and/or finance exportreceivables. Abilityto financing standbyletters of credit forexport purposes.CAPLines:Four differentRevolving Linesof Credit,a/k/a Seasonal,Contract Builders,Working CapitalFinances: seasonalworking capital needs,direct cost toperform assignablecontracts, constructioncosts of structure forresale, or advancesagainst existinginventory andreceivables.Revolving line ofcredit with monthlyinterest andprincipal paymentsbased on when thebusiness receivesthe cash for doingthe activity the loanproceeds financed.Same as Standard7(a) plus abusiness that needsthe specializedproceeds thisprogram offers.Same as Standard 7(a)plus provides revolvingworking capital nototherwise availableto perform on anassignable contract, tocover seasonal needs,to build or renovatepersonal or commercialspace, and to obtainfunds against existingcurrent assets. Alsostructured to meetbusiness needs.SBAExpress:Lender approvesthe loan.$350,000. Same as a Standard7(a) or may be usedfor a revolving workingcapital line of credit.Same as Standard7(a) for term loans,Revolving lines ofcredit up to 7 years.Loans $50,000or less:Prime + 6.5%.Loans over$50,000:Prime + 4.5%.Same as Standard7(a) except lenderhas more leeway tostructure repaymentunder their ownrules.Same as Standard7(a) plus Streamlinedprocess; Easy-to-useline of credit and allowsfor a revolving featurewhich Standard 7(a)does not.** The SBA charges the lender a guaranty fee based on the loan’s maturity and the dollar amount which is initially guaranteed.The lender can pass this expense to the borrower and loan proceeds can be used to reimburse the lender.The 7(a) Guaranty Fee Reference Chart (on next page) explains the Agency’s guaranty fee charges.CAPITALSmall LoanAdvantage:lower-dollarloans to under-served areas$250,000.Rural LoanAdvantage:Rural-based orsmall communitylender$350,000.Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Loans up to$150,000: 85%Loans above$150,000: 75%Loans up to$150,000: 85%Loans above$150,000: 75%Same asStandard 7(a).Same asStandard 7(a).Underservedmarkets.Rural and smallcommunity marketsimpacted bypopulation loss,high unemploymentStream-lined applicationStream-lined application
  • 19. Visit us online: www.sba.gov20 Small Business ResourceU.S. Small Business Administration Loan Programs, Page B Information accurate as of 2/23/20127(a) Loans, continued7(a) GuarantyFee ReferenceChartNOTE 1: The guaranty fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the lender would retain $425.NOTE 2: The guaranty fee on a $2,000,000 loan with a 75% guaranty ($1.5 million guaranteed portion) would be, 3.5% of $1,000,000 ($35,000) PLUS 3.75% of $500,000 ($18,750), for a total of $53,750.Gross Size of Loan Fees NotesLoans of $150,000 or less (See Note 1).................................2% of guaranteed portion, Lender is authorized to retain..............Maturities that exceed 12 months$150,001 to $700,000 .............................................................3% of guaranteed portion..................................................................Maturities that exceed 12 months$700,001 to $5,000,000 (See Note 2) ...................................3.5% of guaranteed portion up to $1,000,000 PLUS 3.75% of......Maturities that exceed 12 monthsthe guaranteed portion over $1,000,000Short Term Loans – up to $5 million.......................................0.25% of the guaranteed portion......................................................Maturities of 12 months or lessNon 7(a) LoansProgram Maturity Structure Who QualifiesMaximumAmountMaximumInterest RateBenefit toBorrowersUse ofProceedsExport Express:Lender approvesthe loan.$500,000.$500,000.Same as SBA Expressplus can be usedfor Standby Lettersof Credit for ExportPurposes. DebtRefinance is notallowed.Same asSBA Express.Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Same asStandard 7(a).Same asSBA Express.Same asSBA Express.Same asSBA Express.Same as SBAexpress plus loanproceeds must beused to supportexport developmentactivity.Same as SBAExpress plus provideslenders with a higherpercentage guarantywhich can encouragethem to make moreloans to finance exportdevelopment activitiesof small businesses.Standby Lettersof Credit are alsoauthorized.Patriot Express:Lender approvesthe loan.Same as Standard7(a) plus must beowned & controlledby one or more ofthe following groupsequaling at least51% total ownership:veteran, active-dutymilitary, reservistor National Guardmember or spouse ofany of these groups,or widowed spouseof service memberor veteran who diedduring service or ofservice connecteddisability.Same as SBAExpress plus provideslenders with a higherpercentage of guarantywhich can encouragethem to make moreloans to qualifiedbusinesses.CommunityAdvantage:AlternativeLenders assistingbusinesseslocated in areaswith high needs.$250,000. Same as Standard 7(a)except cannot be usedto refinance loansmade by or guaranteedby the Dept. ofAgriculture or loansby SBA Micro-Lendersusing their SBAintermediary loan.Same asStandard 7(a)except allowable“Spread” is + 4%over the baserate.Allows mission-oriented lendersfocused oneconomicdevelopmentin underservedmarkets to apply for7(a) guaranty onloan they propose tomake to an eligiblesmall business.Loan eligibilityrequirements aresame as forStandard 7(a) loans,but the businessshould be locatedin an underservedmarket .Borrowers inunderserved marketsget more choices onthe types of lenderswho can providethem financing if theirfinancing needs anSBA guaranty and thetechnical assistanceneeds of the applicantare assessed by thelender.504 Loans:Fixed AssetProject Financingprovided fromthree sources.SBA portion up to$5.0 million.For the acquisition oflong-term fixed-assets,refinancing long termfixed asset debt undercertain conditions, andworking capital on alimited basis.Either 10 or 20 yearterm on the SBA/CDC portion.Check with localSBA DistrictOffice for currentinformation.Financing from1. The CDCCertifiedDevelopmentCompany2. Third PartyLenders3. ApplicantFor profit businessesthat do not exceed$15.0 million intangible net worthand do not have anaverage net incomeover $5 million for thepast 2 years.Fees under 3 percent;long-term fixed rate;low down payment;full amortization; noballoons.Micro-Loans $50,000 totalto one smallbusinessborrower.Furniture, fixtures,supplies, inventory,equipment, andworking capital.Shortest termpossible, not toexceed 6 years.Check with localSBA District Officefor locations oflocally availableintermediarylenders and thencheck with them.Loans throughnon- profit lendingorganizations;technical assistancealso provided.Same as 7(a) – plusloans can be madeto non-profit daycare businesses.Direct loans fromnonprofit intermediarylenders; Fixed-ratefinancing; Verysmall loan amounts;Technical assistanceavailable.CAPITAL
  • 20. Visit us online: www.sba.gov Small Business Resource 21 The U.S. government is the largestsingle purchaser of goods and servicesin the world, buying everything fromarmored tanks to paper clips. Everyyear, the federal government awardsmore than $500 billion in contracts, anda significant share of those contracts arespecifically allotted to small businesses. The Small Business Administrationworks with agencies to award at least23 percent of all prime governmentcontracts to small businesses, withspecific statutory goals for smalldisadvantaged businesses (SDV),businesses that are women-owned(WO) or service-disabled veteran-owned(SDVOSB), or businesses that arelocated in historically underutilizedbusiness zones (HUBZone). The agency ensures that smallbusinesses have access to long-lastingdevelopment opportunities, whichmeans working with small businessesto help them stay competitive, aswell as encouraging federal agenciesto award more contracts to smallbusinesses. The SBA features outreachprograms, matchmaking events, andonline training opportunities; and helpsagencies identify opportunities for smallbusinesses.HOW GOVERNMENTCONTRACTING WORKSSealed bidding vs. Negotiation There are two methods thegovernment uses to purchase goods andservices, sealed bidding and negotiation.The first method, sealed bidding,involves issuing an invitation for bid bya procuring agency. Under the sealedbidding method, a contract is awarded toa responsible bidder who bid, conformingto the invitation for bids, will be mostadvantageous to the Government,considering only price and the pricerelated factors included in the invitationfor bid. The second method, negotiation,involves issuing a request for proposal(RFP) or request for quotation (RFQ).The business with the best proposal interms of technical content, best value,price and other factors generally winsthe contract.Types of Contracts Firm fixed price contracts place thefull responsibility for the costs and riskof loss on the contractor. Firm fixed pricecontracts do not permit any adjustmenton the basis of the contractor’s costsduring the performance of the contract.It provides maximum incentive for thecontractor to control costs and performeffectively and imposes a minimumadministrative burden upon thecontracting parties. This type of contractis used in all sealed bid and somenegotiated procurements. Cost reimbursement contracts providefor the payment of allowable costsincurred by the contractor, to the extentstated in the contract. The contractestablishes a ceiling price, above whicha contractor may not exceed without theapproval of the contracting officer. Costreimbursement contracts are used inresearch and development contracts. Some contracts do not fit neatlyinto these two categories, such astime and material contracts (prices forhourly wages are fixed but the hoursare estimated) and letter contracts(authorizes a contractor to begin workon an urgent requirement).Small Business Set-Asides A “set-aside” for small businessesreserves an acquisition exclusively forsmall business participation. Thereare two ways in which set-asides canbe determined. First, if an acquisitionof goods or services has an anticipateddollar value of at least $3,000 but notexceeding $150,000, it is automaticallyreserved for small businesses. Theacquisition will be set aside only if thecontracting officer determines thereare two or more responsible smallbusinesses that are competitive interms of market prices, quality anddelivery. Second, if an acquisition ofgoods or services is more than $150,000,and if it’s likely offers will be obtainedfrom at least two responsible smallbusinesses, and if awards will be madeat fair market prices, the acquisitionis reserved for exclusively for smallbusiness. Reasonable expectations ofsmall business competition may beevaluated using past acquisition historyof an item or similar items. There are several exceptions andunique rules for specific kinds of smallbusinesses and industries. For Rearchand Development (R&D) small businessset-asides, there must be reasonableexpectation of obtaining from smallbusinesses the best scientific andCONTRACTINGApplying for Government ContractsCONTRACTING
  • 21. Visit us online: www.sba.gov22 Small Business Resourcetechnological sources consistent with thedemands of the proposed acquisition.For small business set-asides otherthan for construction services, anybusiness proposing to furnish a productthat it did not manufacture mustfurnish the product of a small businessmanufacturer unless the SBA hasgranted either a waiver or exception tothis requirement. In industries wherethe SBA finds that there are no smallbusiness manufacturers, it may issuea waiver to the non-manufacturer rule.Waivers permit small businesses toprovide any domestic firm’s product.Subcontracting Subcontracting opportunities area great resource for small businesses,especially to those not ready to bid asprime contractors. Experience gainedfrom subcontracting with a federalprime contractor can better preparebusinesses to bid for prime contracts. Current regulations stipulate forcontracts offering subcontractingopportunities over $650,000 for goodsand services, or $1.5 million forconstruction, large business primecontractors must offer maximumpracticable subcontracting opportunitiesto small businesses. Large businessprime contractors must submit asubcontracting plan describing how theywill successfully subcontract to smallbusinesses. To find subcontracting opportunities,a list of Federal prime solicitations arelisted under the U.S. Small BusinessAdministration Subcontracting Network(SUBNET) http://web.sba.gov/subnet/search/index.cfm and www.gsa.gov/portal/content/101195 General ServicesAdministration (GSA). Research thelist of prime contractors and determinewhich are best suited for your business.Develop a marketing strategy, and thencontact the Small Business LiaisonOfficer (SBLO) listed for each prime toschedule an appointment.SBA CONTRACTINGPROGRAMSHUBZONE The Historically UnderutilizedBusiness Zones (HUBZone) programhelps small businesses located indistressed urban and rural communities,gain access to federal set-aside contractsand sole source contracts, as well as aprice evaluation preference in full andopen contract competitions. There is astatutory requirement that HUBZonesmall business concerns be awarded notless than 3 percent of the total valueof all prime contract awards. TheHUBZone program also establishespreference for award of federal contractsto small businesses in these areas. Toqualify for the program, a business(except those that are tribally-owned)must meet the following criteria:• It must be a small business by SBA sizestandards• It must be owned and controlled atleast 51 percent by U.S. citizens, or aCommunity Development Corporation(CDC), an agricultural cooperative, or anIndian tribe• Its principal office must be locatedwithin a “Historically UnderutilizedBusiness Zone,” which includes landsconsidered “Indian Country” andmilitary facilities closed by the BaseRealignment and Closure Act• At least 35 percent of its employeesmust reside in a HUBZone.Existing businesses that choose tomove to qualified areas are eligibleto apply for certification. To fulfillthe requirement that 35 percent of aHUBZone firm’s employees reside ina HUBZone, employees must live in aprimary residence at a place for at least180 days, or as a currently registeredvoter, and with intent to live thereindefinitely. SBA is responsible for:• Determining whether or not individualconcerns are qualified HUBZone smallbusiness concerns;• Maintaining a list of qualified HUBZonesmall business concerns for use byacquisition agencies in awardingcontracts under the program;• Adjudicating protests and appeals ofeligibility to receive HUBZone contracts. For additional information, visitwww.sba.gov/hubzone.8(a) BUSINESS DEVELOPMENTPROGRAM The 8(a) Business Developmentprogram is a nine year programestablished to assist eligible socially andeconomically disadvantaged individualsdevelop and grow their businesses.Business development assistanceincludes one-to-one counseling, trainingworkshops, and other management andtechnical guidance. There is a statutoryrequirement that small disadvantagedbusiness concerns be awarded not lessthan 5 percent of the total value of allprime contract awards. All firms thatbecome eligible for SBA’s 8(a) businessdevelopment assistance are alsoconsidered small disadvantaged businessconcerns for federal contracting.To be eligible for the 8(a) BusinessDevelopment program, a business mustmeet the following criteria:• It must be a small business by SBAsize standards;• It must be owned (at least 51 percent)by one or more individuals whoqualify as socially and economicallydisadvantaged, and who are UScitizens of good character;• It must be controlled, managed, andoperated by one or more individualswho qualify as disadvantaged, and;• It must demonstrate potential forsuccess (generally by being in businessfor at least two full years) beforeapplying. Socially disadvantaged individualsare those who have been subjected toracial or ethnic prejudice or culturalbias because of their identity as amember of a group without regardto their individual capabilities. Thefollowing individuals are presumedto be socially disadvantaged: BlackAmericans, Native Americans, AlaskaNatives or Native Hawaiians, HispanicAmericans, Asian Pacific Americans,and Subcontinent Asian Americans. Anindividual who is not a member of one ofthese groups must establish individualsocial disadvantage by a preponderanceof evidence. Economically disadvantagedindividuals are socially disadvantagedindividuals whose ability to competein the free-enterprise system has beenimpaired due to diminished capitaland credit opportunities as comparedto others in the same or similarline of business who are not sociallydisadvantaged. Firms owned by Alaska NativeCorporations, Indian Tribes, NativeHawaiian Organizations, andCommunity Development Corporationscan also apply to the SBA for 8(a)business development assistance. So that approved firms can obtaintraining, counseling, and businessdevelopment assistance, SBA designatesa staff person at a local SBA DistrictOffice, geographically near the business. SBA is responsible for:• Determining whether a businessqualifies for the 8(a) BusinessDevelopment program• Determining whether a businesscontinues to qualify, during the nine-year term.• Approving Mentor/Protégé agreementsbetween 8(a) firms and large businesses. For additional information, visitwww.sba.gov/8a.SMALL DISADVANTAGEDBUSINESS A Small Disadvantaged Business(SDB) is defined as a small businessthat is at least 51 percent owned andcontrolled by one or more individualsCONTRACTING
  • 22. Visit us online: www.sba.gov Small Business Resource 23who are socially and economicallydisadvantaged. There is a federal government-widegoal of awarding at least 5 percent ofprime contracting dollars to SDBs eachyear. Large prime contractors must alsoestablish a subcontracting goal for SDBsin their Subcontracting Plans. Firms self-certify as SDB withoutsubmitting any application to SBA;however, firms approved by SBA intothe 8(a) Business Development programare automatically certified as an SDB.To self-certify, firms should update theirCCR profiles and update their ORCAprofiles, making sure that both profilesreflect their SDB status.SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS The Service-Disabled Veteran-Owned Small Business (SDVOSB)program has a federal government-widegoal of awarding at least 3 percentof prime and subcontracting dollarsto Service-Disabled Veteran-OwnedSmall Businesses each year. Largeprime contractors must also establish asubcontracting goal for Veteran-Owned Small Businesses in theirSubcontracting Plans. Thesesubcontracting goals are reviewed attime of proposal by both the contractingofficer and SBA prior to the award of acontract. The SDVOSB Protest is administeredby SBA to ensure that only businessesowned by service-disabled veteransreceive contracts reserved exclusivelyfor them. When a business’s SDVOSBself-certification is challenged, SBAdetermines if the business meetsthe status, ownership, and controlrequirements. To determine your eligibility,contact your local veterans’ businessdevelopment officer, visit thevarious program websites, or contactSBA’s Office of Veterans BusinessDevelopment at www.sba.gov/about-offices-content/1/2985.WOMEN-OWNEDSMALL BUSINESSFEDERAL CONTRACT PROGRAM On October 7, 2010, the SBApublished a final rule effective February4, 2011, aimed at expanding federalcontracting opportunities for women-owned small businesses. The Women-Owned Small Business (WOSB)Federal Contract program authorizescontracting officers to set aside certainfederal contracts for eligible women-owned businesses and economicallydisadvantaged women-owned smallbusinesses. To be eligible, a firm must be at least51 percent owned or controlled by oneor more women. The women must beU.S. citizens. The firm must be “small”in its primary industry in accordancewith SBA’s size standards for thatindustry. To be deemed “economicallydisadvantaged” its owners mustdemonstrate economic disadvantage inaccordance with the requirements setforth in the final rule. For additionalinformation, visit www.sba.gov/content/contracting-opportunities-women-owned-small-businesses. Large prime contractors must alsoestablish a subcontracting goal forWoman-Owned Small Businesses intheir Subcontracting Plans. Thesesubcontracting goals are reviewed attime of proposal by both the contractingofficer and SBA prior to the award of acontract. To be eligible to bid on a federalcontract, you must know yourbusiness. Answer the following threequestions:1. Are you a small business? Is your small business:• Organized for profit?• Located in the U.S.?• Operated primarily within the U.S. or making a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor?• Independently owned and operated?• Not dominant in the field of operation in which it is bidding for government contracts?• A sole proprietorship, partnership, corporation, or any other legal form? If the first six criteria apply to yourbusiness, ask yourself the secondimportant question to find out ifyour business meets size standardrequirements.2. What is the size standard for yourbusiness? Size standards are used todetermine whether a business is smallor “other than small.” Size standardsvary depending upon the industry. Todetermine the size standard for yourbusiness, you will need a NAICS code.Every federal agency uses these codeswhen considering your business. Todetermine your NAICS code, go towww.census.gov/eos/www/naics/. SomeSBA programs require their ownunique size standards. To find outmore about these requirements andother size standard information, go towww.sba.gov/size.3. Do you fall under a specificcertification? Under the umbrella of “smallbusiness,” SBA has outlined severalspecific certifications that businessesmay fall under. These certifications aredivided into two categories:SBA-Certified and Self-Certified. The SBA-Certified Programs werecreated to assist specific businessesin securing federal contracts andtherefore can only be issued by SBAadministrators. For the Self-CertifiedPrograms, you can determine foryourself if your business meets therequirements by referring to theFederal Acquisition Regulations (FAR). Just as Congress has givenfederal agencies a goal of procuring23 percent of federal contracts fromsmall businesses, so too must federalagencies meet specific contractinggoals for other categories of smallfirms. These goals are:• 23 percent of contracts from SmallBusinesses• 5 percent of contracts go to SmallDisadvantaged Businesses• 5 percent go to Women-Owned SmallBusinesses• 3 percent go to Service-DisabledVeteran-Owned Small Businesses• 3 percent go to HUBZone SmallBusinesses Federal agencies have a strongincentive to fulfill these contractinggoals. You should apply for thoseSBA-Certified and Self-Certifiedprograms for which you qualify to takeadvantage of contracting opportunities.WHATYOUSHOULDKNOWABOUTYOURBUSINESSCONTRACTING
  • 23. Visit us online: www.sba.gov24 Small Business Resource Once you have identified theimportant information regarding yourbusiness, it is time to start the process ofprocuring a government contract.1. Identify your DUNS (Data UniversalNumbering System) NumberTo register your business, obtain aDUNS number used to identify and trackmillions of businesses. You canobtain your free DUNS number whenregistering with the CCR (CentralContractor Registration) at www.ccr.govor by contacting Dun & Bradstreet atwww.dnb.com.2. Identify your EIN(Employer Identification Number)An EIN, otherwise known as a federal taxidentification number, is generallyrequired of all businesses. For moreinformation, go to www.irs.gov.3. Identify your NAICS (North AmericanIndustry Classification) codesThe NAICS codes are used to classify theindustry a particular business occupies.You will need at least one NAICS code tocomplete your registration, but be sure tolist as many as apply. You may also addor change NAICS codes at any time. Visitwww.census.gov/eos/www/naics/ to findNAICS codes.4. Identify your SIC (Standard IndustrialClassification) codesThe SIC codes are four-digit numbersthat are used to classify the industry aparticular business occupies. WhileNAICS codes have largely replaced SICcodes, you will still need to provide yourSIC code. SIC codes can be found atwww.osha.gov/pls/imis/sicsearch.html.5. Register with the CCR (CentralContractor Registration)The CCR is an online federalgovernment maintained database ofcompanies wanting to do business withthe federal government. Agencies searchthe database for prospective vendors. TheCCR is at www.ccr.gov. After completing registration, you willbe asked to enter your small businessprofile information through the SBASupplemental Page. The informationwill be displayed in the Dynamic SmallBusiness Search. Creating a profile in CCR and keepingit current ensures your firm has accessto federal contracting opportunities.Entering your small business profile,including your business information andkey word description, allows contractingofficers, prime contractors, and buyersfrom state and local governments tolearn about your company.6. Use ORCA (Online Representationsand Certifications Application)Prospective contractors must complete(electronically or through submission ofpaperwork) representations andcertifications for small business size andprogram status as part of the processthat registers the business for federalcontracting opportunities. To make thisprocess easier for everyone involved, thegovernment developed ORCA, wheregenerally, businesses can complete all ofthe paperwork online. To begin thisprocess, first register your firm in CCR,then go to www.orca.bpn.gov.7. Register with the GSA ScheduleThe GSA (General ServicesAdministration) Multiple Award Schedule(aka Federal Supply Schedule) is used byGSA to establish long-term, governmentwide contracts with commercial firms.Once these contracts are established,government agencies can order thesupplies and services they need directlyfrom the firms through the use of anonline shopping tool. Becoming a GSAschedule contractor increases youropportunity for contracts across all levelsof government. Businesses interested inbecoming GSA schedule contractorsshould review the information availableat www.gsa.gov/schedules.8. Make Sure Your Business isFinancially SoundThis critical step is absolutely necessaryto make sure that your business isfinancially prepared for the journeyahead. Even if you are able to obtain agovernment contract, you will not bereceiving all of the money at once. Ithelps to have a clear plan of how yourbusiness will stage the benefits of thecontract.9. Search Federal Business Opportunities(FedBizOpps) for ContractingOpportunitiesFedBizOpps, is an online service operatedby the federal government thatannounces available businessopportunities. FedBizOpps helps identifythe needs of federal agencies andavailable contracting opportunities.To begin searching for contractingopportunities, go to www.fbo.gov.10. Marketing Your BusinessRegistering your business is not enoughto obtain a federal contract; you will needto market your business to attract federalagencies. Tips for good marketing are:• Determine which federal agencies buy your product or service, and get to know them;• Identify the contracting procedures of those agencies;• Focus on opportunities in your niche and prioritize them. Although not required, you maywant to obtain a PSC (Product ServicesCode) and/or a FSC (Federal SupplyClassification). These codes provideadditional information about theservices and products your businessoffers.GETTING STARTED IN CONTRACTING The following federal procurementresources may also be of assistance:• The Certificates of Competency (CoC)program allows a small business,which is the apparent successfulofferor, to appeal a contracting officer’snon-responsibility determination thatit is unable to fulfill the requirementsof a specific government contract. TheSBA will conduct a detailed reviewof the firm’s technical and financialcapabilities to perform on the contract.If the business demonstrates thecapability to perform, the SBA issuesa Certificate of Competency to thecontracting officer, requiring award ofthat contract to the small business.• Procurement Center Representatives(PCR) and Commercial MarketingRepresentatives (CMR): PCRs workto increase the small business shareof federal procurement awards.CMRs offer many services to smallbusinesses, including counseling onhow to obtain subcontracts. To find aPCR or CMR near you, go to www.sba.gov/content/procurement-center-representatives.• PTACs (Procurement TechnicalAssistance Centers): PTACs provideassistance to businesses that want tosell products and services to federal,state, and/or local government. Tofind a PTAC in your state, go towww.dla.mil/SmallBusiness/Pages/ptap.aspx.• Department of Defense (The DoD isthe largest purchaser of goods fromsmall businesses): www.acq.osd.mil/osbp/• Office of Federal Procurement Policy:www.whitehouse.gov/omb/procurement_default• Acquisition Forecast: www.acquisition.gov/comp/procurement _forecasts/index.html• Federal Supply Schedule (FSS): www.gsa.gov• GSA Center for Acquisition Excellence:www.gsa.gov/portal/content/103487ADDITIONAL PROCUREMENT RESOURCESCONTRACTING
  • 24. Visit us online: www.sba.gov Small Business Resource 25The Disaster AssistanceProgram is SBA’s largestdirect loan program, andthe only form of SBAassistance not limited tosmall businesses. SBA is responsiblefor providing affordable, timely andaccessible financial assistance tohomeowners, renters, businesses of allsizes and private, nonprofit organizationsfollowing declared disasters. By law,governmental units and agriculturalenterprises are ineligible. The SBA offers two types of disasterloans — Physical and Economic InjuryDisaster Loans. Home Physical Disaster Loans upto $200,000 are available to eligiblehomeowners to repair or replace toits pre-disaster condition damaged ordestroyed real estate not fully coveredby insurance. Renters and homeownersalike may borrow up to $40,000 to repairor replace clothing, furniture, cars,appliances, etc., that was damaged ordestroyed in the disaster. Business Physical Disaster Loans upto $2 million are available to qualifiedbusinesses or private, nonprofitorganizations of any size to helprestore or replace damaged real estate,inventory, machinery, equipment andother business assets to its pre-disastercondition. The SBA can also lend additionalfunds to homeowners and businessesto help with the cost of makingimprovements that protect, preventor minimize the same type of disasterdamage from occurring again. Economic Injury Disaster Loans(EIDLs) are working capital loansavailable to qualified small businesses,private nonprofit organizations of allsizes and small agricultural cooperativesthat suffered financial losses becauseof the disaster, regardless of physicaldamage. The SBA can loan up to $2million to provide the necessary workingcapital to help small businesses pay fixeddebts, payroll, accounts payable andother bills that could have been coveredhad the disaster not occurred. The loanis not intended to replace lost sales orprofits. The combined limit for economicinjury and physical damage assistancefor businesses is $2 million. Military Reservist Economic InjuryDisaster Loans (MREIDLs) are workingcapital loans for small businessesadversely affected when an essentialemployee is called up to active dutyby the National Guard or Reserves.An “essential employee” is definedas an individual (whether or not theowner of the small business) whosemanagerial or technical skill is criticalto the successfully daily operationof the business. The loan limit is $2million, and the funds may be used topay necessary operating expenses asthey mature until operations return tonormal after the essential employee isreleased from active military duty. TheMREIDLs cannot be used to replace lostprofits. For all disaster loans, SBA can onlyapprove loans to applicants having acredit history acceptable to SBA andwho also show the ability to repay theloans. The loan terms are establishedin accordance with the borrower’srepayment ability. The law gives SBAseveral powerful tools to make disasterloans affordable: low-interest rates(around 4 percent), long-terms (up to30 years), and refinancing of prior liens(in some cases). As required by law,the interest rate for each loan is basedon SBA’s determination of whether theapplicant has credit available elsewhere(the ability to borrow or use their ownresources to recover after the disaster). More information on all of SBA’sdisaster assistance programs, includinginformation for military reservists, isavailable at www.sba.gov/disaster.Disaster Preparedness For small businesses, surviving adisaster doesn’t begin with clearing thedebris and returning to work. With proper planning, survivingbegins long before the disaster strikes—or before active-duty orders are received.Your planning should include insurancecoverage, emergency power, protectionof company records, fire safety, medicalemergencies, taking care of youremployees and continuity planning –how your business will continue duringand after the emergency or disaster. Starting is as easy as clicking on thedisaster preparedness page of SBA’swebsite at www.sba.gov/content/disaster-preparedness. The page provides links to resourcesto help you put together your ownemergency plan, preparedness tips,and fact sheets about SBA recoveryassistance for homeowners, renters,businesses of all sizes and private,nonprofit organizations. Additionally, to help small businesseswith their preparedness planning, SBAhas teamed up with Agility RecoverySolutions to offer business continuitystrategies for entrepreneurs via their“PrepareMyBusiness” website. Inaddition to offering practical disasterpreparedness tips, Agility is the co-host(with SBA) of a monthly disasterplanning webinar for business owners.Previous webinar topics have includeddiscussions on crisis communications,testing your recovery plan, and usingsocial media to enhance businessrecovery. Visit www.preparemybusiness.orgto get the schedule for future webinars,view archived webinars, and for moredisaster planning tips. As small businesses are leadingAmerica’s economic recovery, many ofthem are investing time and moneyinto their plans to grow and createjobs. Developing a strong disasterpreparedness plan should be a criticaland integral piece of those efforts.Planning for a disaster is the best way oflimiting its effects.Additional Resources The SBA has partnered with theAmerican Red Cross to increaseawareness in the business communityabout the Red Cross Ready Rating™program. Ready Rating™ is a free,self-paced, web-based membershipprogram that helps a business measureits ability to deal with emergencies, andgives customized feedback on how toimprove those efforts. Visitwww.readyrating.org. Additional information on developingan emergency plan is available at thefederal government’s preparednesswebsite www.ready.gov. The Institute for Business and HomeSafety (www.disastersafety.org ) has usefultips on protecting your home or business.SBA DISASTER ASSISTANCEKnowing the Types of Assistance Available for RecoveryDISASTER
  • 25. Visit us online: www.sba.gov26 Small Business ResourceOFFICE OF ADVOCACY The SBA’s Office of Advocacy, the“small business watchdog” of thegovernment, examines the role andstatus of small business in the economyand independently represents theviews of small business to federalagencies, Congress, the President andfederal appellate courts as friendsof the court. Advocacy compiles andinterprets statistics on small businessand is the primary entity within thefederal government to disseminate smallbusiness data. Headed by the Chief Counsel forAdvocacy, the office also funds outsideresearch of small business issuesand produces numerous publicationsto inform policy makers about theimportant role of small businessin the economy and the impact ofgovernment policies on small business.In addition, the office monitors federalagency compliance with the RegulatoryFlexibility Act – the law that requiresagencies to analyze the impact of theirproposed regulations on small entities(including small businesses, smallgovernmental jurisdictions and smallnonprofit organizations), and considerregulatory alternatives that minimizethe economic burden on small entities. Advocacy’s mission is enhanced bya team of regional advocates, locatedin the SBA’s 10 regions. They areAdvocacy’s direct link to small businessowners, state and local governmententities, and organizations thatsupport the interests of small entities.The regional advocates help identifyregulatory concerns of small businessby monitoring the impact of federal andstate policies at the grassroots level. Learn more about the Office ofAdvocacy at www.sba.gov/advocacy.OFFICE OF THE NATIONALOMBUDSMAN If excessive fines, penalties orunfair regulatory enforcement byfederal agencies are problems for yoursmall business, you have a voice inWashington, D.C., through the SBA’sOffice of the National Ombudsman. The Ombudsman receivescomments regarding federal regulatoryenforcement from small businessowners, nonprofit organizations andsmall government entities. Commentsare forwarded to federal agencies forreview, and in some cases fines maybe lowered or eliminated and decisionschanged in favor of the small businessowners. Each year the NationalOmbudsman files a report with theU.S. Congress on the responsivenessof federal agencies regarding theiractions of regulatory and complianceenforcement on small businesses. To request help, send the NationalOmbudsman a complete Federal AgencyComment Form. You may do thisonline at www.sba.gov/ombudsman; byfax at 202-481-5719; or by mail at 409Third Street S.W., Mail Code 2120,Washington, DC 20416. The Ombudsman also coordinates10 Regional Regulatory FairnessBoards which meet regularly to receivecomments about federal regulationsaffecting small businesses. Learn more about the NationalOmbudsman at www.sba.gov/ombudsmanor call 888-REG-FAIR.ADVOCACY AND OMBUDSMANWatching out for small business interestsADVOCACYANDOMBUDSMAN
  • 26. Visit us online: www.sba.gov Small Business Resource 27Even if you are running asmall home-based business,you will have to comply withmany of the local, state, andfederal regulations. Avoidthe temptation to ignore regulatorydetails. Doing so may avert some redtape in the short term, but could bean obstacle as your business grows.Taking the time to research theapplicable regulations is as importantas knowing your market. Bear in mindthat regulations vary by industry. Ifyou’re in the food-service business, forexample, you will have to deal with thehealth department. If you use chemicalsolvents, you will have environmentalcompliances to meet. Carefullyinvestigate the regulations that affectyour industry. Being out of compliancecould leave you unprotected legally,lead to expensive penalties andjeopardize your business.BUSINESS LICENSES There are many types of licenses,both state and local as well asprofessional. Depending on what youdo and where you plan to operate,your business may be required tohave various state and/or municipallicenses, certificates or permits. Licenses are typically administeredby a variety of state and localdepartments. Consult your state orlocal government for assistance.FICTITIOUS BUSINESS NAME Registering your business name,after doing a search to make sure thatit is not already in use, protects youfrom others who might want to usethe same name. For more information,contact the county clerk’s office in thecounty where your business is based.If you are a corporation, you’ll need tocheck with the state.BUSINESS INSURANCE Like home insurance, businessinsurance protects your business againstfire, theft and other losses. Contact yourinsurance agent or broker. It is prudentfor any business to purchase a numberof basic types of insurance. Some typesof coverage are required by law, othersimply make good business sense. Thetypes of insurance listed below areamong the most commonly used and aremerely a starting point for evaluatingthe needs of your business. Liability Insurance – Businessesmay incur various forms of liability inconducting their normal activities. Oneof the most common types is productliability, which may be incurredwhen a customer suffers harm fromusing the business product. There aremany other types of liability, whichare frequently related to specificindustries. Liability law is constantlychanging. An analysis of your liabilityinsurance needs by a competentprofessional is vital in determiningan adequate and appropriate level ofprotection for your business. Property – There are many differenttypes of property insurance and levelsof coverage available. It is importantto determine the property you needto insure for the continuation of yourbusiness and the level of insuranceyou need to replace or rebuild. Youmust also understand the terms of theinsurance, including any limitations orwaivers of coverage. Business Interruption – Whileproperty insurance may pay enoughto replace damaged or destroyedequipment or buildings, how will youpay costs such as taxes, utilities andother continuing expenses during theperiod between when the damageoccurs and when the property isreplaced? Business Interruption (or“business income”) insurance canprovide sufficient funds to pay yourfixed expenses during a period of timewhen your business is not operational. “Key Man” – If you (and/or anyother individual) are so critical tothe operation of your business that itcannot continue in the event of yourillness or death, you should consider“key man” insurance. This type ofpolicy is frequently required by banksor government loan programs. It alsocan be used to provide continuityin operations during a period ofownership transition caused by thedeath, incapacitation or absence dueto a Title 10 military activation of anowner or other “key” employee. Automobile – It is obvious thata vehicle owned by your businessshould be insured for both liabilityand replacement purposes. What isless obvious is that you may needspecial insurance (called “non-ownedautomobile coverage”) if you use yourpersonal vehicle on company business.This policy covers the business’liability for any damage which mayresult for such usage. Officer and Director – Under moststate laws, officers and directors of acorporation may become personallyliable for their actions on behalf of thecompany. This type of policy coversthis liability. Home Office – If you areestablishing an office in your home,it is a good idea to contact yourhomeowners’ insurance company toupdate your policy to include coveragefor office equipment. This coverageis not automatically included in astandard homeowner’s policy.TAXES Taxes are an important and complexaspect of owning and operating asuccessful business. Your accountant,ADDITIONAL RESOURCESTaking care of start up logisticsADDITIONALRESOURCES
  • 27. Visit us online: www.sba.gov28 Small Business Resourcepayroll person, or tax advisor may bevery knowledgeable, but there are stillmany facets of tax law that you shouldknow. The Internal Revenue Service isa great source for tax information.Small Business/Self-Employed TaxCenter: www.irs.gov/businesses/small/index.html. When you are running a business,you don’t need to be a tax expert.However, you do need some tax basics.IRS Small Business/Self-EmployedTax Center gives you the informationyou need to stay tax compliant so yourbusiness can thrive. Small Business Forms andPublications www.irs.gov/businesses/small/article/0,,id= 99200,00.html Download multiple small businessand self-employed forms andpublications.FEDERAL PAYROLL TAX(EIN NUMBERS) An Employer Identification Number(EIN), also known as a FederalEmployer Identification Number(FEIN), is used to identify a businessentity. Generally, businesses need anEIN to pay federal withholding tax. You may apply for an EIN in variousways, one of which is to apply online.www.irs.gov/businesses/small/article/0,,id=102767,00.html. This is a free serviceoffered by the Internal Revenue Service. Call 800-829-1040 if you havequestions. You must check with yourstate to determine if you need a statenumber or charter.FEDERALSELF-EMPLOYMENT TAX Every employee must pay SocialSecurity and Medicare coverage. If youare self-employed, your contributionsare made through the self-employmenttax. The IRS has publications, counselorsand workshops available to help yousort it out. For more information,contact the IRS at 800-829-1040 orwww.irs.gov.SALES TAXEXEMPTION CERTIFICATE If you plan to sell products, youwill need a Sales Tax ExemptionCertificate. It allows you to purchaseinventory, or materials, which willbecome part of the product you sell,from suppliers without paying taxes.It requires you to charge sales taxto your customers, which you areresponsible for remitting to thestate. You will have to pay penaltiesif it is found that you should havebeen taxing your products and nowowe back taxes to the state. Forinformation on sales tax issues, contactyour state’s government.FEDERAL INCOME TAX Like the state income tax, the methodof paying federal income taxes dependsupon your legal form of business. Sole Proprietorship: You must fileIRS Federal Form Schedule C alongwith your personal Federal IncomeTax return (Form 1040) and any otherapplicable forms pertaining to gains orlosses in your business activity. Partnership: You must file a FederalPartnership return (Form 1065). Thisis merely informational to show grossand net earnings of profit and loss. Also,each partner must report his share ofpartnership earnings on his individualForm 1040 based on the informationfrom the K-1 filed with the Form 1065. Corporation: You must file a FederalCorporation Income Tax return (Form1120). You will also be required to reportyour earnings from the corporationincluding salary and other income suchas dividends on your personal federalincome tax return (Form 1040).FEDERAL PAYROLL TAX Federal Withholding Tax: Anybusiness employing a person mustregister with the IRS and acquire anEIN and pay federal withholding tax atleast quarterly. File Form SS-4 with theIRS to obtain your number and requiredtax forms. Call 800-829-3676 or800-829-1040 if you have questions.IRS WEB PRODUCTSFOR SMALL BUSINESSES For the most timely and up-to-datetax information, go to www.irs.gov/businesses/small/index.html.VIRTUAL SMALL BUSINESSWORKSHOPwww.tax.gov/virtualworkshop/ The Virtual Small Business TaxWorkshop is the first of a series ofvideo products designed exclusivelyfor small business taxpayers. Thisworkshop helps business ownersunderstand federal tax obligations.The Virtual Small Business Workshopis available on CD www.irs.gov/businesses/small/article/0,,id=101169,00.htm andonline www.irsvideos.gov/virtualworkshop/if you are unable to attend a workshopin person. Small business workshopsare designed to help the small businessowner understand and fulfill theirfederal tax responsibilities. Workshopsare sponsored and presented byIRS partners who are federal taxspecialists. Workshop topics vary from ageneral overview of taxes to morespecific topics such as recordkeepingand retirement plans. Althoughmost are free, some workshops havefees associated with them. Feesfor a workshop are charged by thesponsoring organization, not the IRS. The IRS’s Virtual Small BusinessTax Workshop is an interactiveresource to help small business ownerslearn about their federal tax rightsand responsibilities. This educationalproduct, available online and on CDconsists of nine stand-alone lessonsthat can be selected and viewed inany sequence. A bookmark featuremakes it possible to leave and returnto a specific point within the lesson.Users also have access to a list ofuseful online references that enhancethe learning experience by allowingthem to view references and the videolessons simultaneously. Tax Calendar for Small Businessesand Self-Employed (Publication 1518)www.irs.gov/businesses/small/article/0,,id=176080,00.html. The Tax Calendar for SmallBusinesses and Self-Employedcontains useful information on generalbusiness taxes, IRS and SSA customerassistance, electronic filing and payingoptions, retirement plans, businesspublications and forms, common taxfiling dates, and federal legal holidays.SOCIAL SECURITY CARDS All employees must have a socialsecurity card. It must be signed by itsowner, and you should always ask tosee and personally record the socialsecurity number. Failure to do so maycause your employee to lose benefits andconsiderable trouble for yourself in backtracking to uncover the error. Each payday, your employees mustreceive a statement from you tellingthem what deductions were madeand how many dollars were taken outfor each legal purpose. This can bepresented in a variety of ways, includingon the check as a detachable portionor in the form of an envelope with theitems printed and spaces for dollardeductions to be filled in.ADDITIONALRESOURCES
  • 28. Visit us online: www.sba.gov Small Business Resource 29EMPLOYEE CONSIDERATIONSTaxes If you have any employees, includingofficers of a corporation but not the soleproprietor or partners, you must makeperiodic payments towards, and/or filequarterly reports about payroll taxesand other mandatory deductions. Youmay contact these government agenciesfor information, assistance and forms.Social Security Administration800-772-1213www.ssa.govSocial Security’s Business ServicesOnline The Social Security Administrationnow provides free electronic servicesonline at www.socialsecurity.gov/employer/.Once registered for Business ServicesOnline, business owners or theirauthorized representative can:• file W-2s online; and• verify Social Security Numbersthrough the Social Security NumberVerification Service, used for allemployees prior to preparing andsubmitting Forms W-2.Federal WithholdingU.S. Internal Revenue Service800-829-1040www.irs.govHealth Insurance Compare plans in your area atwww.healthcare.gov.Employee Insurance If you hire employees you may berequired to provide unemployment orworkers’ compensation insurance.WORKPLACE DISABILITYPROGRAMS Americans with Disabilities Act(ADA): For assistance with the ADA, call800-669-3362 or visit www.ada.gov.U.S. CITIZENSHIP ANDIMMIGRATION SERVICES The Federal Immigration Reform andControl Act of 1986 requires employersto verify employment eligibility ofnew employees. The law obligatesan employer to process EmploymentEligibility Verification Form I-9. TheU.S. Citizenship and ImmigrationServices Office of Business Liaison offersa selection of information bulletins andlive assistance through the EmployerHotline. For forms call 800-870-3676, forthe Employer Hotline call 800-357-2099.E-Verify: Employment EligibilityVerification E-Verify, operated by the Departmentof Homeland Security in partnershipwith the Social Security Administration,is the best--and quickest--way foremployers to determine the employmenteligibility of new hires. It is a safe,simple, and secure Internet-basedsystem that electronically verifies theSocial Security number and employmenteligibility information reported on FormI-9. E-Verify is voluntary in most statesand there is no charge to use it. If you are an employer or employeeand would like more information aboutthe E-Verify program, please visitwww.dhs.gov/E-Verify or contact ourCustomer Support staff: 1-888-464-4218Monday – Friday 8 am – 5 pm.E-mail: e-verify@dhs.govSAFETY AND HEALTHREGULATIONS All businesses with employees arerequired to comply with state andfederal regulations regarding theprotection of employees. TheOccupational Safety and HealthAdministration outlines specific healthand safety standards adopted by theU.S. Department of Labor.BUILDING CODES,PERMITS AND ZONING It is important to consider zoningregulations when choosing a site for yourbusiness. You may not be permitted toconduct business out of your home orengage in industrial activity in a retaildistrict. Contact the business licenseoffice in the city or town where thebusiness is located.BAR CODING Many stores require bar coding onpackaged products. Many industrialand manufacturing companies use barcoding to identify items they receive andship. There are several companies thatcan assist businesses with bar-codingneeds. You may want to talk with anSBDC, SCORE or WBC counselor formore information. ADDITIONALRESOURCES
  • 29. Visit us online: www.sba.gov30 Small Business ResourceFederal Registration of Trademarksand Copyrights Trademarks or service marks arewords, phrases, symbols, designs orcombinations thereof that identifyand distinguish the source of goods.Trademarks may be registered at boththe state and federal level. To register afederal trademark, contact:U.S. Patent and Trademark Office:P.O. Box 1450Alexandria, VA 22313-1450800-786-9199www.uspto.gov/Trademark Information Hotline703-308-9000STATE REGISTRATIONOF A TRADEMARK Trademarks and service marks maybe registered in a state.Caution: Federally registeredtrademarks may conflict with andsupersede state registered business andproduct names.Patents A patent is the grant of a propertyright to the inventor by the U.S. Patentand Trademark Office. It provides theowner with the right to exclude othersfrom making, using, offering for sale orselling the patented item in the UnitedStates. Additional information is provided inthe publications, General InformationConcerning Patents and otherpublications distributed through theU.S. Patent and Trademark Office. Formore information, contact the:U.S. Patent and Trademark Office800-786-9199 • www.uspto.govCopyrights Copyrights protect original works ofauthorship including literary, dramatic,musical and artistic, and certain otherintellectual works. Copyrights donot protect facts, ideas and systems,although it may protect the way thesethings are expressed. For generalinformation contact:U.S. Copyright OfficeU.S. Library of CongressJames Madison Memorial BuildingWashington, DC 20559202-707-9100 - Order Line202-707-3000 - Information Linewww.copyright.gov There are many forms of legalstructure you may choose for yourbusiness. Each legal structure offersorganizational options with differenttax and liability issues. We suggest youresearch each legal structure thoroughlyand consult a tax accountant and/orattorney prior to making your decision. The most common organizationalstructures are sole proprietorships,general and limited partnerships, “C”and “S” corporations and limited liabilitycompanies. Each structure offers unique tax andliability benefits. If you’re uncertainwhich business format is right for you,you may want to discuss options with abusiness counselor or attorney.Sole Proprietorship One person operating a business asan individual is a sole proprietorship.It’s the most common form of businessorganization. Profits are taxed asincome to the owner personally. Thepersonal tax rate is usually lower thanthe corporate tax rate. The ownerhas complete control of the business,but faces unlimited liability for itsdebts. There is very little governmentregulation or reporting required withthis business structure.General Partnership A partnership exists when twoor more persons join together inthe operation and management of abusiness. Partnerships are subject torelatively little regulation and are fairlyeasy to establish. A formal partnershipagreement is recommended to addresspotential conflicts such as: who will beresponsible for performing each task;what, if any, consultation is neededbetween partners before major decisions,and what happens when a partnerdies. Under a general partnership eachpartner is liable for all debts of thebusiness. Profits are taxed as income tothe partners based on their ownershippercentage.Limited Partnership Like a general partnership, alimited partnership is established byan agreement between two or morepersons. However, there are two typesof partners.• A general partner has greater controlin some aspects of the partnership.For example, only a general partnercan decide to dissolve the partnership.General partners have no limits on thedividends they can receive from profitso they incur unlimited liability.• Limited partners can only receivea share of profits based on theproportional amount on theirinvestment, and liability is similarlylimited in proportion to theirinvestment.“C” Corporation A “C” corporation is a legal entitycreated under state law by the filing ofarticles of incorporation. A corporationis a separate entity having its ownrights, privileges and liabilities, apartfrom those of the individual(s) formingthe corporation. It’s the most complexform of business organization and iscomprised of shareholders, directorsand officers. Since the corporationis a separate legal entity in its ownright it can own assets, borrow moneyand perform business functionswithout directly involving the owners.Corporations are subject to moregovernment regulation and offer theowners the advantage of limited liability,but not total protection from lawsuits.Subchapter “S” Corporation Subchapter “S” references a specialpart of the Internal Revenue Code thatpermits a corporation to be taxed as apartnership or sole proprietorship, withprofits taxed at the individual, ratherthan the corporate rate. A businessmust meet certain requirements forSubchapter “S” status. Contact the IRSfor more information.LLCs and LLPs The limited liability company isa relatively new business form. Itcombines selected corporate andpartnership characteristics whilestill maintaining status as a legalentity distinct from its owners. As aseparate entity it can acquire assets,incur liabilities and conduct business.It limits liability for the owners. Thelimited liability partnership is similarto the LLC, but it is for professionalorganizations.BUSINESS ORGANIZATION:Choosing Your Business StructureADDITIONALRESOURCES
  • 30. The SBA actively supports the wide diversity of smallbusinesses that are driving our economy forward in 2012,from Main Street shops, to high-growth startups, andeverything in between. No matter what your business,you can get help from the SBA. Whether you are a smallbusiness owner who has worked with us before or anentrepreneur who knows nothing about what the agencyhas to offer, there’s never been a better time to link upwith your local SBA.Like the tools in this Resource Guide, the SBA’saccomplishments in 2011 reflect the diversity of the smallbusinesses we serve.For example, in Fiscal Year 2011, the SBA put a recordamount of SBA loan dollars in the hands of small businessowners. The agency provided over $30 billion in lendingsupport to over 60,000 small businesses through its toptwo lending programs – 7(a) and 504. Now, SBA lendingis back to where it was before the recession. That’s goodnews for small businesses that need access to capital togrow and hire new workers.For high-growth small businesses looking for investmentcapital, the Small Business Investment Company (SBIC)program had a record year, as well. SBICs are privatelyowned and managed investment funds that use theirown capital, plus funds borrowed with an SBA guarantee,to invest in small businesses. The SBA does not investdirectly into small businesses, but it provides funding toinvestment management firms with expertise in certainsectors or industries. “In Fiscal Year 2011, the SBA issueda record $1.83 billion in new commitments to SBICs.SBICs provided $2.83 billion in financing dollars to over1,300 small businesses, helping create or retain over 60,000jobs —all at zero cost to taxpayers.”At the same time, more small businesses are competingfor and winning government contracts. Last year,the SBA’s most recent “Score Card” showed that thefederal government awarded 22.7% of contracts to smallbusinesses in 2010. This is the second year of increaseafter four years of decline. While this is good news,the SBA will not rest until the government meets itsgoal of awarding 23% of contracts to small businesses.Government contracts are the oxygen that many smallbusinesses need to survive, and the SBA is committed tohelping more small businesses win more contracts in 2012.The SBA worked hard last year to put more tools in thehands of entrepreneurs in underserved markets. Forexample, the Young Entrepreneurs Series visited five citieswhere young people are starting businesses and creatingthe jobs of the future. The SBA also held forums focusedon women entrepreneurs, the faith-based community,and veterans. The SBA’s Council on UnderservedCommunities held its first meeting last summer, and thecouncil is already developing ideas for how the SBA canexpand its reach into these communities.The Small Business Jobs Act created an independentOffice of International Trade (OIT) within the SBAto support small business exporting. OIT set to workimplementing the State Trade and Export Promotion(STEP) grants – also part of the Small Business JobsAct – that gave state-based export promotion programs$30 million to support small business exporting. Forexample, in Idaho, the grants will support a program tohelp a cluster of agricultural equipment manufacturersfind international buyers. In Virginia, the money will goto help advanced manufacturers and IT companies enterthe global supply chain. Meanwhile, North Carolina isusing the grant money to connect firms with trade shows,trade missions, and overseas marketing opportunities andto provide translation services for small businesses thatneed a website in a different language. Exporting is animportant way for small businesses to expand, and theSBA can help. Look for resources in this guide to learnmore about how you can sell your product overseas.Finally, the SBA also aids business owners, homeownersand other victims of natural disasters. The SBA offers longterm, low interest loans to help disaster victims rebuild.Last year, the Office of Disaster Assistance supportedvictims of countless disasters, including Hurricane Irene.The SBA approved over 13,000 disaster loans worth nearly$740 million. Of course, no small business owner wantsto be caught unprepared when disaster strikes. The SBAcan help you get your business ready for whatever comesyour way.As you can see from this article and the rest of thisguide, the SBA has a wide variety of tools no matterwhat your business needs. In the following pages, youcan read about how the SBA has helped businessesthrough access to capital, opportunities in governmentcontracting, counseling, and more. You can also findcontact information for our 68 district offices on the insideback cover, where trained professionals can walk youthrough getting a loan, competing for contracts, or findinga business counselor.If you don’t find what you’re looking for here, there iseven more information on the agency’s newly redesignedwebsite, www.SBA.gov. While you’re there, check outSBA Direct, which presents a customized list of resourcesin your area based on information you enter about yourbusiness.BuildingonSBA’sRecordYearVisit us online: www.sba.gov Small Business Resource 31FEATURE
  • 31. Visit us online: www.sba.gov32 Small Business ResourceFresh water Vermont is not a location where you mightexpect to find a seawater desalination company. And yetSt. George, Vermont is the home of Scott Shumway andIndustrial Services, Inc., a thriving international companyfocused on desalination. In 1999, he and his wife andchildren moved from Bermuda to Vermont to start hisglobal business and to enjoy the state’s beauty and outdooractivities. “No matter where you’re located,” Shumwayexplained, “this is a field where you’re going to be workinginternationally. For me, moving to Vermont was a quality-of-life issue.”Industrial Services Inc. (ISI) provides both know-howand the equipment to convert millions of gallons ofseawater into drinking water for municipal water supplycompanies and hotels and resorts around the world.Since its founding in 2003, ISI revenues have increasedfrom $200,000 to nearly $8 million in 2010. The companyincludes a varying number of subcontractors; two full-time office employees to handle accounting, export issues,personnel and payroll; and six full-time engineers withflexible work assignments around the globe. Currently, ISIis building the second of two desalination plants, whichwill produce 1.5 million gallons a day for the AtlantisResort in Nassau.With funding from several loans guaranteed by the U.S.Small Business Administration, Shumway developed aunique customer tool he calls a “plant configurator,” whichallows clients to design their own desalination plants andgives them direct, transparent access to equipment pricing.“Our goal was to empower the little guy so he wouldn’t bestuck talking to a distributor or manufacturer who mightbe marking up the equipment excessively,” Shumwaysaid.” ISI has received two SBA Exporting Working Capitalrevolving lines of credit, one in 2010 for $250,000 and in2011 for $750,000; these loans were also helpful becauseISI needed up-front cash to support construction costs.“International transactions are commonly based on lettersof credit, so the SBA loans provided us with access to cashwhen needed,” he explained.Although ISI clients are global and its manufacturedproducts are bound for export, Shumway said distance isno obstacle. Thanks to Internet connectivity, Shumwaycan troubleshoot desalination plants in the Bahamas oranywhere in the world, even to the extent of turningvalves or pumps on and off through computer monitors inVermont.Shumway credits his international experience as a keyreason for ISI’s success. “One of our greatest successes isthat we very much understand the difficulties of keepingtechnology functioning in regions that don’t have theinfrastructure to support it,” Shumway said. “The designswe offer have to be appropriate for the locations wherethe equipment is going. People are smart everywhere, soit really has nothing to do with their abilities. It has to dowith the resources they have. If need be, we might converta system to a 1960’s electro-mechanical model, which isreliable and easy to troubleshoot.”Shumway’s own expertise in desalination was born ofa love of the ocean (he is a certified scuba diver) anda fascination with other cultures. He graduated fromthe University of Maryland with a degree in mechanicalengineering and previously worked at a desalination plantin Boston. “I think a lot of entrepreneurship is learningwhat’s out there before you jump in. If you do that, thenyou know what’s missing. If you offer what’s missing,people listen to you.”“Find a niche. You don’t necessarily have to try that hardto create a profitable business if you pursue work that isnot just another one of many. If you can find that nicheand do a good job, I’m confident you’ll be successful.”Shumway was selected by the SBA as the 2011 SmallBusiness Exporter of the Year for Vermont because of hiscompany’s increased sales, growth of employment, andcreative overseas marketing strategies.Export Working Capital Loans -Industrial Services, Inc.Owner Scott Shumway (left) with Construction Supervisor Cort Sener(right) at Industrial Services, Inc. factory in St. George, VT. Desalinationpressure vessels in the background will be shipped to Africa to providepotable water.Industrial Services, Inc.St. George, Vermont2011 Small Business Exporter of the Year for VermontScott ShumwayFEATURE
  • 32. Visit us online: www.sba.gov Small Business Resource 33Jobs Act Loan - Oncobiologics, Inc.As he was working his way up the ranks of largepharmaceutical companies, Dr. Pankaj Mohan wasconsumed by the thought of contributing to society andhelping families who suffer through difficult illnesses. Sohe developed an idea that would take a novel approach tobringing new cancer therapies to the patients who needthem.Early in 2011, Dr. Mohan realized his lifelong dreamby launching Oncobiologics, Inc., a Cranbury-basedbiotechnology firm. “When Oncobiologics was in theplanning stages, I envisioned creating a workplace whereevery employee is a family member and is nurtured toreach his/her full potential,” said Dr. Mohan.His extensive experience with big pharmaceuticalcompanies had also taught him that improving the drugdevelopment process would not be an easy task. “Inorder to accomplish this goal, you need to speed-up thedevelopment process through technology and partnerships;you need to hire senior scientists and technicians fromtop-tier pharma and biotech organizations with extensiveexperience in developing and commercializing successfulbiologic drugs, and you need a state-of-the-art facility,”said Dr. Mohan.In order to realize his dream, Dr. Mohan needed financingto bring all of this together. After months of searching,he found the facility and started putting together hismanagement team, but he still needed the financing toacquire the necessary equipment. That’s when he enlistedthe help of the New Jersey Small Business DevelopmentCenter (NJSBDC) at Raritan Valley Community College.He received help fine tuning his business plan andwas directed to Hopewell Valley Community Bank, aparticipant in the U.S. Small Business Administration’s(SBA) Guaranteed Loan program.As a result of the assistance Dr. Mohan received from theNJSBDC at Raritan Valley Community College, he was ableto secure an SBA-backed loan of $1 million from HopewellValley Community Bank which was used to launch hisNew Jersey based biotech firm. The loan has enabled him to purchase the necessaryequipment and to hire his initial team of 20 people to beginmaking progress on the firm’s biotherapeutics platformsand proof of concept services model. The company hasalready made strides in advancing its cancer treatmentplatform, and has also secured a commitment from a toppharmaceutical firm for its first proof-of-concept project.“This assistance has already created 20 jobs, with 40more jobs to come over the next several months and thepotential for 500 jobs within five years. Clearly, investingin technology-driven firms will be an important source forfuture job creation. This funding has been critical to ourearly stage growth at this time.”In August, the company reached an agreement with theFox Chase Cancer Center in Philadelphia to co-developa novel, next generation bi-specific antibody cancerplatform with enhanced therapeutic capabilities againstsolid tumors. The jointly engineered platform is designedto handle multiple targets, representing a pipeline ofpromising cancer treatments.“We are taking small steps,” said Dr. Mohan, “First wediscover and then we develop therapies. After we developthe therapies we conduct pre-clinical trials, and then thefinal step is clinical studies. By 2012, we will be doingclinical manufacturing.”“I figure I have one shot in life and while I am here I wouldlike to make a small contribution.”Oncobiologics Founder and CEO Dr. Pankaj Mohan with a guest inOncobiologics’ state-of- the-art research and development facility.Oncobiologics, Inc.Cranbury, New JerseyFEATURE
  • 33. People who know Meredith Smith Anderson are probablynot surprised at her selection as the 2011 U. S. SmallBusiness Administration’s Prime Contractor of the Year forRegion IV. As Managing Member of Can’t Be Beat Fence &Construction, LLC, Anderson has led the company to stabilityand multi-state growth. Established in 1982, the companyprovides wood, vinyl, chain link, and cable barrier fencing toresidential, commercial, and governmental entities.Anderson sort of backed into the fencing business. Shemarried Lloyd Anderson who for years managed Pit Grillson the Gulf Coast while working in his uncle’s residentialfencing business on weekends. Meredith started helping himand they picked up jobs while her grandmother helped withthe couple’s four children, Olen, Davy, Vicky and Dusty.“That was in the 1970s and those were tough times,” shesaid. “We grew the business from residential to commercialfencing when the casinos came to the Gulf Coast.” The nextphase was government subcontracting work through the RoyAnderson Corporation.The company is certified as HUBZone, 8(a) and a SmallDisadvantaged Business. It holds certifications with theDepartment of Transportation and Women’s BusinessEnterprise; is accredited with the Better Business Bureau; andhas garnered contracts throughout the nation. Since October2010, Anderson has successfully bid contracts ranging from$3.5 million for a demolition project at the Naval Air Stationin Jacksonville, Florida, to $12.1 million for a constructionproject in Great Lakes, Illinois.The firm’s main office is located in Bay St. Louis, Mississippiwith other office locations in Perkinston, Mississippi; OrangePark, Florida; and Odon, Indiana.The SBA’s Prime Contractor of the Year regional award isgiven to a small business that provides outstanding goods andservices as a prime contractor to the government and privatesector.In 1990, Mickey Oudit emigrated to the United States fromTrinidad and Tobago with his wife and two-year old son.To support his family, he got a job sweeping a broom in theNational Capital Filters factory. He was very appreciativeof the opportunity, though he would soon prove that hisambitions were far greater.After becoming the top salesman for a heating and air-conditioner company, Mickey decided to branch out onhis own. With a clear sense of the additional businessopportunities in his industry, Mickey launched Cosmos AirPurification and Environmental Systems, Inc. in 1996. Thefollowing year, Cosmos Air acquired National Capital Filters,his former employer. Today, Cosmos Air is a privately-heldconcern with annual revenues of more than $4 million and17 full-time employees. Cosmos Air continues to grow in anextremely competitive field through a consultative approach toselling and a flexible, customizable product line.Through some of the most challenging periods of hiscompany’s growth, Mickey developed a relationship withthe Maryland Small Business Development Center. WhenCosmos outgrew its manufacturing facility, the SBDC helpedMickey arrange an SBA 504 loan through a local CommunityDevelopment Corporation to purchase a suitable parcel oflight industrial property in Landover, Maryland. Throughcareful planning and flawless execution, Cosmos was ableto shift their entire operations to the new facilities with onlythree days of interruption.Although recent economic difficulties have slowed CosmosAir’s growth, the firm has convinced most of their customerbase that maintaining their facilities’ air purification systemsis a cost-saving investment rather than an expense thatshould be cut. In addition, they were able to extend specialterms to their most valued customers that helped to maintainthese critical relationships in a time of financial stress. Withadvice from the Maryland SBDC, Cosmos continues to thrivein economic circumstances which challenge even the mostestablished corporations.Through it all, Mickey Oudit maintains a commitment to hiscustomers, his staff, and his community that make him thetrue embodiment of a “success story”.HUBZone Program - Can’t Be Beat Fenceand Construction, LLCVisit us online: www.sba.gov34 Small Business ResourceSBDC Assistance - Cosmos Air Purification andEnvironmental Systems, Inc.Owner Mickey Oudit (right)shows a filter manufactured at hiscompany Cosmos Air Purificationand Environmental Systems, anddiscusses quality control withSimone Munro-Blass, GeneralManager (left) and Cindy Rubio,Customer Service (middle).Cosmos AirPurification andEnvironmentalSystems, Inc.Landover MarylandMeredith Smith Anderson, owner of Can’tBe Beat Fence & Construction.Can’t Be Beat Fence andConstruction, LLCBay St. Louis, Mississippi2011 SBA Prime Contractorof the Year for Region IVMeredith Smith AndersonFEATURE
  • 34. Visit us online: www.sba.gov Small Business Resource 35SBA’s 2011 Small Business Person of the Year for Illinoispractices what she believes; “If you can dream it, you canlive it.” Growing up this was the mantra heard repeatedlyin Katrina Markoff’s house. Raised by a single parentwith an entrepreneur’s spirit, Katrina’s mother gave herthis advice daily. As a result, this Indiana native followedher dreams and is the President/Owner of Vosges HautChocolat, Ltd., an internationally renowned Chocolatier.However, Katrina did not always heed her mother’sadvice. In the beginning, Katrina studied chemistryand psychology at Vanderbilt University, but just daysfollowing to her graduation, Katrina realized that her truepassion was cooking. With mom’s mantra in the backof her head, Katrina boarded the next plane to Paris topursue her dream in culinary arts at the famous Le CordonBleu (L’Ecole de Cuisine et Patisserie). Graduating witha Le Grande Diplome in Cuisine and Patisserie as wellas degrees in Oeneology, Katrina moved to Spain toapprentice with Ferran and Albert Adria of the famed ElBulli.Katrina continued to study food as she traveled aroundthe world sampling local street faire cuisine from open-airspice stalls of Viet Nam to floating markets of Bangkok.Working in various kitchens around the world, this daringsoul continued to train her palate by studying indigenouscuisines in such countries as Italy, Australia, China, andKorea just to name a few.Using chocolate as a medium to tell stories of her travels,local people, artists, movements, religions, music, culture,and ingredients, Katrina founded Vosges Haut-Chocolatin 1998. With the idea of traveling the world throughchocolate, Katrina was able to highlight her stories byfeeding avid listeners chocolates that featured indigenousspices, flowers, roots, and scents from around the worldto help compliment her storied adventures. As a result, anew business model was born.Today Vosges Haut-Chocolat is a house of culturalinnovation. With a corporate philosophy that strivesto balance the mind, efficiency, and spirit within theworkplace, this company continues to grow even throughan adverse economy. With a mission to create a luxurychocolate experience, Vosges embraces the idea of tryingsomething new that is unique to a variety of cultures fromaround the world.Although Vosges is located in Chicago’s Lincoln Park, itsinternational chocolate brand is known worldwide fromDubai to Japan to England. With retail outlets in Chicago,New York, and Las Vegas, Katrina is planning to opennew stores in San Francisco and Los Angeles. With over 83people pumping out its unique brand, Vosges wholesalesits luxury chocolates to high profile retailers such asNeiman Marcus, Whole Foods, and Charlie Trotter’s.Over the years Katrina has turned to SBA for assistanceincluding securing a $1.5 million loan used to restructurethe company debt. For her various exploits andadventures, Katrina has received numerous awards.Other awards include Inc. Magazines 26 most FascinatingEntrepreneurs, 2008 OPEN American Express Woman ofthe Year, and 2010 Greek America’s Top 40 under 40 justto name a few.Loan For Restructuring Debt - Vosges, Ltd.Katrina Markoff, President and owner of Vosges-Haut Chocolate in herChicago retail store.Vosges, Ltd.Chicago, Illinois2011 SBA Small Business Person of the Year for IllinoisKatrina MarkoffFEATURE
  • 35. Bruce E. Reid and Cheryl A. Reid are managing membersof Reid Enterprises, LLC, doing business as Mesa VerdeResources (MVR). Bruce Reid, General Manager of MVR,has 33 years of experience in geology. Since 1999, hehas taken MVR from a small company to a major humatemanufacturer. They are a full-service humate mining andmanufacturing company that provides humate productsand are headquartered in Placitas, New Mexico.“What are humates,” you ask. Humate materials aresubstances from the biological and chemical breakdownof animal and plant life that has taken a few million yearsto deposit. In short, humates are fossilized plants andanimals mixed with rock and soil compounds. A complexstate of fragmented DNA and RNA that cannot be brokendown or even traced to its origin. Using humates restoresthe natural balance in soil necessary for optimal plantgrowth.Over the past decades, MVR has supplied the agriculturalindustry with the highest quality humates, mined frompremium New Mexico geologic deposits, in the UpperCretaceous Fruitland Formation, in the San Juan Basin.Mesa Verde humates are nature’s brilliant blend of organic,humic, fulvic acids and more. They are used extensively toincrease plant quality and production, and to improve andreplenish depleted soils.Due to the recession in 2009 the company found itself ina financial bind. MVR employed 15 full-time employeesand business was slower than normal. The pressurewas on to pay off high interest loans and to keep theircurrent employees. They worked with their banker, RoyBrady of First American Bank in (City), who assistedthem in applying for and receiving a U.S. Small BusinessAdministration (SBA) American Recovery & ReinvestmentAct (ARRA) Loan, with a 90 percent guarantee. With thisloan they were able to refinance their high interest loans.Business later picked up and MVR needed new equipmentto keep up with demand. Mr. Brady assisted the Reids insecuring a Small Business Jobs Act Loan. This loan wasdisbursed at a 90 percent guarantee and was used to ascreener. The new screener sped up production and orderswere processed more quickly. They were now able toservice new customers and expedite the delivery of ordersto existing customers. This new growth prompted them tohire 2 more temporary employees that eventually becamepermanent and a highly skilled manager that had been outof work for over 1 year.MVR is also an export company that will ship theirproducts in any desired quantity from 10 tons to 10,000tons to any domestic or international location. Mesa VerdeResources exports to El Salvador, the Philippines, Australia,Brazil, Pakistan, Mexico, Canada, South Africa, Taiwan andNew Zealand.Visit us online: www.sba.gov36 Small Business ResourceLoan For Equipment Purchase -Reid Enterprises, LLCBruce Reid, Co-owner and General Manager, stands in front of a haulerloaded with humate at his Mesa Verde Resources processing plant.Reid Enterprises, LLCPlacitas, New MexicoFEATURE
  • 36. Visit us online: www.sba.gov Small Business Resource 37For Tia Love becoming an entrepreneur started as a 10yearold kid living near the Applewood Golf Course, whereshe would spend summer days bolting down the fairwaysto wade into the ponds - retrieving errant golf balls…to sell them back to the golfers at 25 cents apiece. Herentrepreneurial spirit has only grown stronger as the yearspassed.Her north Omaha-based Love Enterprises, and companiesunder its corporate umbrella, hit a combined $275,000in revenues last year. Love owns a retail store, a salon, aconstruction company, a rental property management firmand a lead paint abatement consulting firm. Often, sheheads straight from work at a steamy construction site in atee-shirt, jeans and a ball cap to handle other parts of herbusinesses. She hit a snag after a move to 72nd Street and addingairbrushing services to the mix. At that point, owningbusinesses just didn’t work out. Love rebounded bytaking a class at the area YWCA to learn constructiontrades: electrical, painting, plumbing and carpentry. Oneinstructor mentioned opportunities in lead abatementinspecting, so she earned a license as a lead supervisoryrisk assessor inspector.Wanting to own a business again, Love turned to Omaha’snonprofit OSBN for help. OSBN is a business developerwith a mission: to spur economic activity in Omaha’seconomically disadvantaged, eastern neighborhoods.They offer discounted office space at their 24th and Lakebuilding and other support, like SBA-backed microloans, tostartups and up-and-coming businesses.The idea that OSBN offered discount space and smallloans in case she might need them inspired Love to againstrike out on her own. Love’s started her own constructionfirm in an OSBN discounted rental and won a handfulof contracts with the city. Soon she did indeed find sheneeded a financial cushion to handle the traditional,governmental 60-to-90 day payment delays. Again sheturned to OSBN and acquired a SBA-backed microloan topurchase materials and enough working capital to handlepayroll expenses.Love enrolled with the federal government’s CentralContractor Registry and last year, the company served as asubcontractor on a huge project excavating yards for leadabatement work as part of the Environmental ProtectionAgency’s Superfund declaration in Omaha. The projectaffected more than 15,000 homes in the eastern part of thecity.Love is pursuing further federal contracting opportunitiesand seeking certification as a minority-owned and 8(a)business to access set-aside contracts and achieve greatersuccess.Love has also created a real estate business to buy run-down properties at bargain prices and fix them up to makethem available for rent, expanding the pool of affordablehousing in the city.Last October, Love took out another microloan fromOSBN to open and hire a manager for Rare, a full-servicesalon and boutique on south 13th Street in the Old MarketStreet, tabbed as “Hollywood in the Heartland.”Recently, she acquired a commercial building and adealer’s license to open what she describes as an “auto spafor cars,” which will not only to sell vehicles but providecustomers with detailing and customization services.And these days she is also spending time on a long-termbusiness plan that she hopes will help her get larger SBA-backed financing to expand her enterprises further.“Sometimes, it’s just hard to find sources to give you thecapital you need. That’s where OSBN came in. They werethe ones there for me,” said Love, who added that she alsohas put “a lot” of her own money into her projects.Does Love have advice for others? “Definitely have a planand map out your goals,” Love said. “Stay encouraged,find people to support you and always look around tofind new information about opportunities out there.Stay committed and work hard until you see your visionthrough. If you want to do something, do it. I say it’s onepercent the idea, 99 percent sweat.”SBA 8(a) Government Contracting Program -Love Enterprises, Inc.Tia Love, President and CEO of Love Enterprises, Inc. stands in front of twoproperties her company with renovate this year.Love Enterprises, Inc.Omaha, NebraskaFEATURE
  • 37. Laducer and Associates, Inc. was established in 1985under the ownership and direction of James K. Laducer, amember of the Turtle Mountain Band of Chippewa Indians.The company began as a four-person operation, andthrough contracts with the North Dakota Department ofTransportation and the U.S. Small Business Administration,provided management and technical assistance to NorthDakota small and minority-owned businesses.Even though Laducer was very successful in this endeavor,he later diversified the services to include informationmanagement. This undertaking proved fruitful, whenin 1996 Laducer obtained a subcontract with Uniband,Inc. to provide data capture management services for theImmigration and Naturalization Service (INS). By investingfunds from two 7(a) loans approved by Kirkwood Bankand Trust for $532,000, Laducer purchased a 10,890 sq. ft.facility in Mandan, North Dakota. He also designed theproduction layout, purchased data processing workstations,and hired over 75-people—all within one month’s time.In 1997, additional data processing contracts were securedwith Blue Cross Blue Shield of North Dakota and theNorth Dakota Department of Health. Success and growthcontinued when in 1999 Laducer securing a 5-year contractwith the U.S. Department of the Treasury’s InternalRevenue Service (IRS). To perform this large-scale contract,expansion to its current facility was needed, as well asemploying additional data key operators.In 2004, Laducer began its working relationship with ReedTechnology & Information Services, Inc. (RTIS) to captureand prepare for publication patent applications submittedto the U.S. Patent and Trademark Office. That same year,the U.S. Fish and Wildlife Service (FWS) awarded a dataprocessing contract, utilizing Laducer’s GSA Schedule36 Federal Supply contract. In April 2005, Laducer andAssociates again turned to SBA financing with a $325,000loan that has been paid in full.Since entering this exciting and ever-changing businessarena 25 years ago, the company has proven itself as aviable data processing center. Laducer’s operation nowincludes an offsite facility on the Turtle Mountain IndianReservation in Belcourt, ND, and employs over 200 highly-skilled data key operators. The company continues itspartnerships with the IRS, RTIS, and FWS.“If it wasn’t for SBA lending, we could not have grown intoone of the largest privately owned Indian businesses in thecountry,” said Jim Laducer.In December 2007, a lifetime dream was fulfilled. Laducerand three business partners (of whom two are TurtleMountain tribal enrolled members) received approval fromFDIC and the North Dakota State Banking Commissionto open a Native American bank on the Turtle MountainIndian Reservation. The bank, Turtle Mountain State Bank,is the first “privately-owned” Native American bank inthe State of North Dakota and the first “privately-owned”Native American bank in the U.S. to operate a financialinstitution on a federally recognized Indian Reservation.Laducer is the majority stockholder and serves as aDirector, as well as the Chief Lending Officer/ExecutiveVice President. The bank has an excellent workingrelationship with SBA, as well as the Bureau of IndianAffairs and other state financial entities.The bank is currently constructing a new and bigger facilityand Laducer anticipates full operations at that site soon.In August of 2011, Laducer and Associates, Inc. wasrecognized as a “SBA 100” company; this award goes toa company that has used SBA programs, services or loansand has grown to have 100 or more employees.Visit us online: www.sba.gov38 Small Business ResourceSBA 100 Company -Laducer and Associates, Inc.James K. Laducer, President of Laducer and Associates.Laducer & Associates, Inc.Mandan, North DakotaFEATURE
  • 38. Visit us online: www.sba.gov Small Business Resource 39While flying over Vietnam as an Air Force Command Pilot,Cliff Evarts could not have predicted a career in the LasVegas wedding business. It happened when an opportunitylanded in his life and his career path took an unexpectedturn; that lead to his being named SBA’s 2011 SmallBusiness Person of the Year.Since leaving the Air Force, Cliff has been involved incommercial real estate and business development forover thirty years. In 2002, he represented a buyer for awedding business, and when the deal fell through he tooka hard look at the business model and decided to join thewedding industry in Las Vegas.However, Cliff encountered challenges. The Las Vegaswedding industry had a reputation for fast, no-waitmarriages and cheap weddings. Competition wasintense, as most of the free standing wedding chapelsare compressed within the Las Vegas city limits. Further,major resorts entered the market to attract guests, withlarge, glitzy venues and far reaching advertising budgets.Vegas Weddings set out to change and revolutionizethe Las Vegas wedding industry image by providing aworld-class wedding experience in a high quality venue.Cliff targeted couples wanting a traditional wedding at afraction of the average U.S. wedding cost of $25,000.In 2003, Cliff started a commercial real estate brokeragefirm, Buyers Only Real Estate, which provided the vehiclenecessary for Vegas Weddings to expand and achieve itsfull potential.Through Buyers Only, Cliff purchased property and builta new facility with the help of an SBA loan. This was abenchmark year for growth in revenue and employees asthe new facility enabled the company to cater to largerweddings and to compete with major Las Vegas resorts.Vegas Weddings has operated profitably from its firstmonth in business, with average revenue increases ofover 40% per year, in spite of the fact that Clark Countymarriage licenses were the lowest in 2010 since 1993.Cliff says, “We credit our success to our focus on a verysmall segment of the Las Vegas visitor market.” He adds,“We currently perform as many as 880 weddings a month,which places us at the very top of our competition.”Vegas Weddings has not only weathered the economicstorm of the past year, but has demonstrated a multi-yearpattern of excellence.Property Acquisition and Building Loan -Vegas WeddingsVegas WeddingsLas Vegas, Nevada2011 SBA Small Business Personof the Year for NevadaCliff EvartsCliff Evarts, owner of Las Vegas Weddings sits in his Las Vegas, Nevadawedding chapel.FEATURE
  • 39. In September, 2011, with the help of SCORE businesscounseling and an SBA loan guarantee, the O’Hara’sof When the Shoe Fits opened their third location inVancouver, WA.When Amy and Alan O’Hara decided it was time to maketheir business idea a reality, they sought out the assistanceof their local SCORE chapter first. The O’Hara’s hadindustry knowledge and a growing desire, but needed torefine their business acumen and find enough capital tolaunch their dream. For three months, the O’Hara’s metwith SCORE volunteers Nick and Carlos, refining theirbusiness plan and pitch. Amy recalls that, in 2004, at least15 banks had rejected their business loan applicationsbefore an SBA loan guarantee through Pacific Continentalhelped them get their first store underway.Alan and Amy attribute the success and growth of theirshoe stores to customer service and custom fitting services.Alan’s background as a certified pedorthist, former shoesalesman, and buyer; and Amy’s former experience inshoe sales and manufacturing; result in an informed salesteam that can provide a comprehensive shoe selectionexperience. When the Shoe Fits focuses on hiringknowledgeable shoe sellers who can recommend productsand lines to meet each customer’s specific needs. And thecustomers, largely Clark County baby boomers, appreciatethe company’s service model.“It’s a great group,” Alan O’Hara said. They’re not going tosacrifice style for comfort.”In 2007 they established a second store, and seven yearslater in 2011 they received a SBA backed 7 (a) loan for$250,000 to launch their third location. Their business hasgrown to employ 16 full-time employees with health andretirement benefits, and 2 part-time employees, and hasreached $2.7 million in sales.“I am so grateful, beyond belief!” said owner Amy O’Hara.“I have my health, a thriving business, and I provide areally good living for loads of people.”Visit us online: www.sba.gov40 Small Business Resource7(a) Loan - When The Shoe FitsOwners Amy and Alan O’Harashow off their line of shoes.Never intending to make a career out of a seemingly short-term job in a family member’s company, in 2004, StephanieLoud quickly found herself managing and later owningMountain West Precast.The prospects for succeeding as a female owner in themale dominated pre-cast concrete industry has beenchallenging. “I had to go through a very extensive learningcurve for both the business and the industry,” Loud recalls.A self-described over-achiever, she dedicated herself tolearning all she could as fast as possible.In 2009, Stephanie’s company was accepted in the 8(a)program. In only seven years, Mountain West Precasthas grown from a staff of 2 to 14 supporting major supplycontracts the company earned from state and federalprojects. A creative marketer at heart, Stephanie hasworked hard to ‘get the word out’ about Mountain WestPrecast and its innovative products, which include a newline focused on architectural precast designs.In 2011, Mountain West put an American Recovery andReinvestment Act loan of $35,000 to good use. “I usedthe loan to purchase more barrier forms so that I am ableto bid on larger projects,” said Loud. “This makes memore competitive with larger companies by having moreinfrastructure. It gave me the tools to do more work.”Recovery ARC Loan - Mountain West PrecastMountain West PrecastOgden, UtahMountain West Precast crew members Jason Weese (manholding hose), Tyler Howell (left foreground), Kevin Squires (left–background) and Frank Narvaez (right - background standingnear platform) finishing a precast pavement for an Interstate 15project in Utah.When The Shoe FitsVancouver, WashingtonFEATURE
  • 40. ALABAMAAlabama District Office801 Tom Martin Drive, Suite 201Birmingham, AL 35211205-290-7101ALASKAAlaska District Office420 L Street, Suite 300Anchorage, AK 99501-1952907-271-4022ARIZONAArizona District Office2828 North Central Avenue, Suite 800Phoenix, AZ 85004-1093602-745-7200ARKANSASArkansas District Office2120 Riverfront Drive, Suite 250Little Rock, AR 72202-1796501-324-7379CALIFORNIAFresno District Office801 R Street, Suite 201Fresno, CA 93721559-487-5791Toll free call800-359-1833 then press 6Los Angeles District Office330 North Brand, Suite 1200Glendale, CA 91203818-552-3215Sacramento District Office6501 Sylvan Road, Suite 100Citrus Heights, CA 95610916-735-1700San Diego District Office550 West C Street, Suite 550San Diego, CA 92101619-557-7250San Francisco District Office455 Market Street, 6th FloorSan Francisco, CA 94105-2420415-744-6820Santa Ana District Office200 W Santa Ana Boulevard, Suite 700Santa Ana, CA 92701714-550-7420CONNECTICUTConnecticut District Office330 Main Street, Second FloorHartford, CT 06106860-240-4700COLORADOColorado District Office721 19th Street, Suite 426Denver, CO 80202303-844-2607DELAWAREDelaware District Office1007 N. Orange Street, Suite 1120Wilmington, DE 19801-1232302-573-6294DISTRICT OF COLUMBIAWashington MetropolitanArea District Office740 15th Street N.W., Suite 300Washington, DC 20005-1033202-272-0345FLORIDANorth Florida District Office7825 Baymeadows Way, Suite 100BJacksonville, FL 32256-7504904-443-1900South Florida District Office100 S. Biscayne Boulevard, 7th FloorMiami, FL 33131305-536-5521GEORGIAGeorgia District Office233 Peachtree Street N.E., Suite 1900Atlanta, GA 30303404-331-0100GUAMGuam Branch Office400 Route 8, Suite 302First Hawaiian Bank BuildingHagatna, GU 96910671-472-7419HAWAIIHawaii District Office500 Ala Moana Boulevard, Suite 1-306Honolulu, HI 96813808-541-2990IDAHOBoise District Office380 East Parkcenter Boulevard, Suite 330Boise, ID 83706208-334-9004ILLINOISIllinois District Office500 W. Madison Street, Suite 1150Chicago, IL 60661-2511312-353-4528Illinois Branch Office3330 Ginger Creek Road, Suite BSpringfield, IL 62711217-793-5020INDIANAIndiana District Office8500 Keystone Crossing, Suite 400Indianapolis, IN 46240-2460317-226-7272IOWADes Moines District Office210 Walnut Street, Room 749Des Moines, IA 50309-2186515-284-4422Cedar Rapids Branch Office2750 1st Avenue N.E., Suite 350Cedar Rapids IA 52402-4831319-362-6405KANSASWichita District Office271 W 3rd Street N., Suite 2500Wichita, KS 67202316-269-6616KENTUCKYKentucky District Office600 Dr. MLK Jr. Place, Room 188Louisville, KY 40202-2270502-582-5971LOUISIANANew Orleans District Office365 Canal Street, Suite 2820New Orleans, LA 70130504-589-6685MAINEMaine District OfficeEdmund S. Muskie Federal Building,Room 51268 Sewall StreetAugusta, ME 04330207-622-8551MARYLANDBaltimore District OfficeCity Crescent Building10 South Howard Street, Suite 6220Baltimore, MD 21201410-962-6195MASSACHUSETTSMassachusetts District Office10 Causeway Street, Room 265Boston, MA 02222617-565-5590Springfield Branch OfficeSTCC Technology ParkOne Federal Street, Building 101-R,Springfield, MA 01105413-785-0484MICHIGANMichigan District Office477 Michigan AvenueSuite 515, McNamara BuildingDetroit, MI 48226313-226-6075MINNESOTAMinneapolis, MN District Office100 North Sixth StreetSuite 210-C Butler SquareMinneapolis, MN 55403612-370-2324MISSISSIPPIMississippi District OfficeRegions Plaza210 E. Capitol Street, Suite 900Jackson, MS 39201601-965-4378Gulfport Branch OfficeHancock Bank Plaza2510 14th Street, Suite 103Gulfport, MS 39501228-863-4449MISSOURIKansas City District Office1000 Walnut, Suite 500Kansas City, MO 64106816-426-4900Great Plains1000 Walnut Street, Suite 530Kansas City, MO 64106816-426-4845Springfield Branch Office830 E. Primrose, Suite 101Springfield, MO 65807-5254417-890-8501St. Louis District Office1222 Spruce Street, Suite 10.103St. Louis, MO 63103314-539-6600SBA LOCAL OFFICESDirectory ListingVISIT US AT WWW.SBA.GOV/LOCALRESOURCESVisit us online: www.sba.gov42 Small Business ResourceDIRECTORY
  • 41. SBA LOCAL OFFICE LISTINGSMONTANAMontana District Office10 West 15th Street, Suite 1100Helena, MT 59626406-441-1081NEBRASKANebraska District Office10675 Bedford Avenue, Suite 100Omaha, NE 68134-3613402-221-3620NEVADANevada District Office400 South 4th Street, Suite 250Las Vegas, NV 89101702-388-6611Nevada District Office -Alternative Work Site745 West Moana Lane, Suite 375Reno, NV 89509775-827-4923NEW HAMPSHIRENew Hampshire District OfficeJC Cleveland Federal Building55 Pleasant Street, Suite 3101Concord, NH 03301603-225-1400NEW JERSEYNew Jersey District OfficeTwo Gateway Center, Suite 1501Newark, NJ 07102973-645-2434NEW MEXICONew Mexico District Office625 Silver SW, Suite 320Albuquerque, NM 87102505-248-8225NEW YORKBuffalo District OfficeNiagara Center130 S. Elmwood Avenue, Suite 540Buffalo, NY 14202716-551-4301Elmira Branch Office333 E. Water Street, 4th FloorElmira, NY 14901607-734-8130Long Island Branch Office350 Motor Parkway, Suite 109Hauppauge, NY 11788631-454-0750New York District Office26 Federal Plaza, Suite 3100New York, NY 10278212-264-4354Rochester Branch Office100 State Street, Room 410Rochester, NY 14614585-263-6700Syracuse District Office224 Harrison Street, Suite 506Syracuse, NY 13202315-471-9393NORTH CAROLINANorth Carolina District Office6302 Fairview Road, Suite 300Charlotte, NC 28210-2227704-344-6563NORTH DAKOTANorth Dakota District Office657 2nd Avenue N., Room 218P.O. Box 3086Fargo, ND 58108701-239-5131OHIOCleveland District Office1350 Euclid Avenue, Suite 211Cleveland, OH 44115216-522-4180216-522-8350 TDDCincinnati Branch Office525 Vine Street, Suite 1030Cincinnati, OH 45202513-684-2814Columbus District Office401 N. Front Street, Suite 200Columbus, OH 43215614-469-6860OKLAHOMAOklahoma City District OfficeFederal Building301 N.W. 6th Street, Suite 116Oklahoma City, OK 73102405-609-8000OREGONPortland District Office601 S.W. Second Avenue, Suite 950Portland, OR 97204-3192503-326-2682PENNSYLVANIAHarrisburg Branch Office1 Penn Center2601 N. 3rd StreetHarrisburg, PA 17110717-782-3840Philadelphia District OfficeParkview Tower1150 First Avenue, Suite 1001King of Prussia, PA 19406610-382-3062Pittsburgh District Office411 Seventh Avenue, Suite 1450Pittsburgh, PA 15219412-395-6560Wilkes-Barre Branch Office7 N. Wilkes-Barre BoulevardWilkes-Barre, PA 18702570-826-6204PUERTO RICO/U.S. VIRGIN ISLANDSPuerto Rico andU.S. Virgin Islands District Office273 Ponce de Leon AvenuePlaza Scotiabank, Suite 510San Juan, PR 00917787-766-5572RHODE ISLANDRhode Island District Office380 Westminster Street, Room 511Providence, RI 02903401-528-4561ST. CROIXSt. Croix Post of DutyAlmeric L. Christian Federal BuildingAnd U.S. Court House 3013Estate Golden Rock, Room 167St. Croix, USVI 00820340-718-5380 or 800-669-8049SOUTH CAROLINASouth Carolina District Office1835 Assembly Street, Room 1425Columbia, SC 29201803-765-5377SOUTH DAKOTASouth Dakota District Office2329 N. Career Avenue, Suite 105Sioux Falls, SD 57107605-330-4243TENNESSEETennessee District Office50 Vantage Way, Suite 201Nashville, TN 37228615-736-5881Tennessee District Office -Alternative Work Site555 Beale StreetMemphis, TN 38103901-526-9300TEXASCorpus Christi Branch Office3649 Leopard Street, Suite 411Corpus Christi, TX 78408361-879-0017Dallas District Office4300 Amon Carter Boulevard, Suite 114Fort Worth, TX 76155817-684-5500El Paso District Office211 N. Florence, Suite 201El Paso, TX 79901915-834-4600Houston District Office8701 S. Gessner Drive, Suite 1200Houston, TX 77074713-773-6500Lower Rio Grande Valley District Office222 East Van Buren Avenue, Suite 500Harlingen, TX 78550956-427-8533Lubbock District Office1205 Texas Avenue, Room 408Lubbock, TX 79401-2693806-472-7462San Antonio District OfficeNorth Park Corporate Center17319 San Pedro, Building 2, Suite 200San Antonio, TX 78232-1411210-403-5900UTAHUtah District Office125 South State Street, Room 2227Salt Lake City, UT 84138801-524-3209VERMONTVermont District Office87 State Street, Room 205Montpelier, VT 05601802-828-4422VIRGINIARichmond District OfficeFederal Building400 N. 8th Street, Suite 1150Richmond, VA 23219-4829804-771-2400WASHINGTONSeattle District Office2401 Fourth Avenue, Suite 450Seattle, WA 98121206-553-7310Spokane Branch Office801 W. Riverside Avenue, Suite 444Spokane, WA 99201509-353-2800WEST VIRGINIAWest Virginia District Office320 West Pike Street, Suite 330Clarksburg, WV 26301304-623-5631Charleston Branch Office405 Capitol Street, Suite 412Charleston, WV 25301304-347-5220WISCONSINWisconsin District Office740 Regent Street, Suite 100Madison, WI 53715608-441-5263310 West Wisconsin Avenue, Room 400Milwaukee, WI 53203414-297-3941WYOMINGWyoming District Office100 East B Street, Federal BuildingP.O. Box 44001Casper, WY 82602-5013307-261-6500Visit us online: www.sba.gov Small Business Resource 43DIRECTORY