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  • In the Small Business Act of July 30, 1953, Congress created the Small Business Administration whose function was to “aid, counsel, assist and protect, in so far as is possible, the interests of small business concerns.” The charter also stipulated the SBA would insure small business a “fair proportion” of government contracts and sales of surplus property.
  • Financial Assistance - loans Business Development - use of resource partners assists small businesses in the development of management skills and business expertise. Procurement Assistance - Liaison between small business owners and Government Procuring offices. Insuring that small businesses receive a fair share of government contracts. Office of Advocacy - encourage policies that support the development and growth of American small business. Advocacy represents the nation's small businesses within the federal government; conducts policy studies; and compiles statistics on small business characteristics and contributions.
  • SBA’s authority to guarantee loans comes from Section 7(a) of the Small Business Act - hence the 7(a) program or Guarantee Loans LowDoc Loans Certified Development Company or 504 Loans Disaster Loans - Direct Loans
  • Must be a “For Profit” business Must qualify as a small business under SBA size standards (more on slide to follow) Type - there are some types of business that are ineligible for SBA business loans (more on slide to follow) Must be unable to borrow on reasonable terms from conventional lenders without government help
  • Business must qualify as small under SBA size standard criteria, based on average number of employees for the preceding 12 months, or based on sales volume averaged over a three-year period. Size Standard is SIC Code specific (changing to NAICS - North America Industry Classification Standards)
  • Non-Profits - increase the economy through increase jobs and tax revenue Lenders - banks, finance companies, pawn shops Passive Owned Real Estate - developers and landlords - spread shopping centers and apartment complexes Foreign Businesses - (businesses in the U.S. owned by aliens may qualify) Pyramid sale distribution plans If you have previously defaulted on a Federal loan or Federally assisted financing, resulting in the Federal Government or any of its agencies or departments sustaining a loss - includes if you guaranteed a loan Businesses principally engaged in teaching, instruction, counseling or indoctrinating religion or religious beliefs Derive revenue through the sale of products or services, or live performances of a offensive sexual nature - X-Rated Dance Establishment and Adult Tapes Speculation - oil wildcatting Gambling - 1/3 gross annual revenue from legal gambling (illegal ineligible) Insurance Companies - independent agents may be eligible Incarcerated, probation, parole - continuation of management
  • Borrower - Business Plan, Market Loan & Provide Info Lender central figure (Governed by Banking Laws) Small Business applies & works with Lender If the loan is approved, subject to an SBA guaranty, the Lender will provide SBA application forms and submits the completed application to SBA along with a request for guaranty. Once approved, the bank will close and service the loan in the same manner as other bank loans that do not have an SBA guaranty. Purpose is not to encourage Lenders to make bad loans. Our purpose is to help businesses with a reasonable chance of succeeding obtain financing on reasonable terms. Certified and Preferred Lenders
  • Purpose - how will the proceeds of the loan be used Market, Market Niche, Market Sector, Competition, Quality, Price, Service Gravy & Meat of Business Plan Current (with-in 90 to the same date) Balance Sheet - as of date, Income Statement - for the time period ending on date Financials of 3 Years (own or purchase), we will ask for IRS release Proformas - 3 Years (1 first year more detail) Personal Financials (credit checks are pulled) - no surprises Verbiage - backing up data
  • Terms a just caps and must be negotiated with Lender Terms are a blended rate based on use of proceeds Machinery & Equipment - useful life No Balloon Notes - these are term loans with principle and interest being paid in-full at maturity
  • What Do These Business Have in Common? Received assistance from the SBA Financial through loans & SBICs Management assistance through SCORE Chapters and SBDCs Government contracting assistance Had Business Plans Heart & Soul connected to the Nuts & Bolts
  • Procurement Center Representatives - work with Federal Government Contracting activities and Prime Contractors Liaison between Small Business Owners and the Federal Government Contracting officers PTAC - SBDCs - contact from the Department of Defense
  • Free to business and is open to all businesses seek Federal, State and private contracting opportunities Used by Federal Procurement Activities, Prime contractors and other with large contracting or subcontracting opportunities Use to fined Joint Venture colleagues Every field can be used in search including description
  • Password protected Links to SBA’s Business Development web pages and other sites of interest to small businesses interested in government contracting
  • The HUBZone Empowerment Contracting program provides federal contracting opportunities for qualified small businesses located in distressed areas. Fostering the growth of these federal contractors as viable businesses, for the long term, helps to empower communities, create jobs, and attract private investment. The program encourages economic development in history underutilized business zones - “HUBZones” - through the establishment of preferences. (provides access to more Federal contracting opportunities)
  • Any Surety Company can participate, but we can supply a list of those who have participated Beware of the fees
  • Ten Department or Agencies Dept of Agriculture, Dept of Commerce, Dept of Defense, Dept of Education, Dept of Energy, Dept of Health and Human Services, Dept of Transportation, Environmental Protection Agency, NASA, National Science Foundation
  • More & more up today information on the web
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  • Shivanigeneral

    1. 1. U.S. Small Business Administration Programs Shivani Desai, Arizona District Office Associate District Director for Business Development [email_address]
    2. 2. U.S. Small Business Administration <ul><li>Created in 1953 </li></ul><ul><li>The only Federal Government Agency specifically designed to assist the small business community </li></ul><ul><li>Mission Statement </li></ul><ul><ul><li>aid </li></ul></ul><ul><ul><li>counsel </li></ul></ul><ul><ul><li>protect </li></ul></ul><ul><ul><li>fair proportion of government contracts and sales </li></ul></ul>
    3. 3. How We Assist Small Business <ul><li>Business Development </li></ul><ul><li>Financial Assistance </li></ul><ul><li>Procurement Assistance </li></ul><ul><li>Office of Advocacy </li></ul>Business Plans
    4. 4. SBA’s Resource Partners <ul><li>SCORE </li></ul><ul><li>Small Business Development Centers </li></ul><ul><li>Women’s Business Centers </li></ul>
    5. 5. TELEPHONE OR VISIT SCORE FOR FREE BUSINESS COUNSELING PHOENIX SCORE 602.745.7250 2828 N. Central Avenue, #800 Phoenix EAST VALLEY SCORE: 480.833.9020 1201 S. Alma School #4800, Mesa SCORE’s WEB SITE: ● Free Monthly Newsletter ● E-mail Counseling TUCSON SCORE 520.670.5008 10 E. Broadway, Tucson Prescott-Northern AZ 928.778.7438 1228 Willow Creek Rd.#2, Prescott
    6. 6. SMALL BUSINESS DEVELOPMENT CENTERS “SBDC” <ul><li>● Business Planning ● Training </li></ul><ul><li>● Loan Preparation ● Counseling </li></ul><ul><li>Arizona has SBDC’s statewide. </li></ul> Visit their web site:
    7. 7. SBA’s Women’s Business Center in Arizona <ul><li>Tucson: </li></ul><ul><li>Tucson/Pima County WBC </li></ul><ul><li>10 East Broadway, #210 Tucson </li></ul><ul><li>520.620.1241 </li></ul><ul><li>Area: Pima County </li></ul>
    8. 8. SBA’s Web Pages <ul><li>SBA Program Information: </li></ul><ul><li> </li></ul><ul><li>Publications </li></ul><ul><li>Links </li></ul><ul><li>Local Information: </li></ul><ul><li> </li></ul>
    9. 9. SBA Loan Programs <ul><li>7(a) Regular Loans </li></ul><ul><li>Certified Development Company - 504 Loans </li></ul><ul><li>Disaster Loans </li></ul>
    10. 10. SBA Loan Eligibility <ul><li>For Profit </li></ul><ul><li>Size Standards </li></ul><ul><li>Type </li></ul><ul><li>Unable to borrow on reasonable terms </li></ul>
    11. 11. Size Standards <ul><li>Sales in Millions </li></ul><ul><li>Retail $6.0 to $21.0 </li></ul><ul><li>Service $2.5 to $21.5 </li></ul><ul><li>Construction $7.0 to $33.5 </li></ul><ul><li>Agriculture $ .5 to $ 9.0 </li></ul><ul><li>Number of </li></ul><ul><li>Employees </li></ul><ul><li>Wholesale < 100 </li></ul><ul><li>Manufacturing 500 to 1500 </li></ul> /size
    12. 12. Type - Those Not Eligible Are... <ul><li>Non-Profits </li></ul><ul><li>Lenders </li></ul><ul><li>Passive Owned Real Estate </li></ul><ul><li>Foreign Business </li></ul><ul><li>Pyramid Sales </li></ul><ul><li>Defaulted on a Federal Loan resulting in a loss </li></ul><ul><li>Religious Teaching </li></ul><ul><li>Sexual Materials </li></ul><ul><li>Speculation </li></ul><ul><li>Gambling </li></ul><ul><li>Life Insurance </li></ul><ul><li>Incarcerated, on probation or parole, or indicted for felony or moral crime </li></ul>
    13. 13. THREE ELEMENTS IN AN SBA GUARANTEED LOAN <ul><li>Small Business Applicant </li></ul><ul><li>Bank </li></ul><ul><li>SBA </li></ul>
    14. 14. THE BUSINESS PLAN <ul><li>Purpose of the Loan </li></ul><ul><li>History & description of the Business </li></ul><ul><li>Current Balance Sheet & Income Statement </li></ul><ul><li>Financial Statements for 3 Years </li></ul><ul><li>Schedule of Term Debts </li></ul><ul><li>Aging of A/R and Payables </li></ul><ul><li>Investment by Owner </li></ul><ul><li>Proformas </li></ul><ul><li>Personal Financials and Resume </li></ul>
    15. 15. Loan Terms <ul><li>7 years for working capital </li></ul><ul><li>10-15 years for equipment </li></ul><ul><li>Up to 25 years for land and building </li></ul>
    16. 16. What if I only need a business loan between $200.00 to $35,000.00 ? <ul><li>Prestamos Small Business Lending </li></ul><ul><li>(Counties of Maricopa, Pima, Graham, Gila, Coconino, Yavapai) </li></ul><ul><li>PPEP Microbusiness & Housing (Counties of Cochise, Santa Cruz, Pinal,Yuma, etc.) </li></ul><ul><li>Microbusiness Advancement Center of S. Arizona (Pima County) </li></ul>SBA has a MICROLOAN PROGRAM! Nonprofit Intermediaries make loans to eligible borrowers. Application is made directly to the Intermediary:
    17. 17. What Do These Businesses Have in Common <ul><li>Staples </li></ul><ul><li>Federal Express </li></ul><ul><li>American Online </li></ul><ul><li>Sun Tire </li></ul><ul><li>Nike </li></ul><ul><li>Apple Computers </li></ul><ul><li>Outback </li></ul><ul><li>Teledyne </li></ul><ul><li>Intel </li></ul>
    18. 18. Government Procurement Assistance <ul><li>Procurement Marketing & Access Network </li></ul><ul><li>8(a) and SDB certifications </li></ul><ul><li>HUBZones </li></ul><ul><li>Surety Bonds </li></ul><ul><li>Small Business Innovation Research Grants </li></ul><ul><li>Procurement Center Representatives </li></ul>
    19. 19. Central Contractor Registration <ul><li> is a National Internet-based database of small businesses. </li></ul><ul><li>A link to procurement opportunities. </li></ul><ul><li>An electronic search engine for contracting officers. </li></ul><ul><li>A marketing tool for small firms. </li></ul>
    20. 20. What are the Advantages of <ul><li>One-stop procurement shop </li></ul><ul><li>Solicitations can be e-mailed to those businesses with e-mail addresses listed in their profile. </li></ul><ul><li>It’s a dynamic system allowing participating small firms to update their own profiles </li></ul>
    21. 21. 8(a) & Small Disadvantaged Business Certification <ul><li>8(a) Program </li></ul><ul><li>Business Development Program </li></ul><ul><li>9 year participation </li></ul><ul><li>Criteria </li></ul><ul><ul><li>US Citizen </li></ul></ul><ul><ul><li>2 Years in Business </li></ul></ul><ul><ul><li>Less than $250,000 in personal assets </li></ul></ul><ul><ul><li>Demonstrate social & economic disadvantage </li></ul></ul>
    22. 22. HUBZone Empowerment Contracting Program <ul><li>Federal Contracting Opportunities </li></ul><ul><li>Distressed Areas </li></ul><ul><li>Foster Growth </li></ul><ul><li>Empower Communities, create jobs, and attracts private investment </li></ul>
    23. 23. SBA Surety Bonds <ul><li>Why SBA Surety Bond </li></ul><ul><li>SBA will guarantee 70-90 % of face value </li></ul><ul><li>Must meet SBA Size Standards </li></ul><ul><li>Fees </li></ul><ul><ul><li>From Surety - 23% of premium </li></ul></ul><ul><ul><li>From Contractor - $7.45 per every $1,000 of contract </li></ul></ul>
    24. 24. Small Business Innovation Research Grants <ul><li>Ten Federal Department & Agencies </li></ul><ul><li>Criteria </li></ul><ul><ul><li>American Owned </li></ul></ul><ul><ul><li>For-Profit </li></ul></ul><ul><ul><li>R&D Program </li></ul></ul><ul><ul><li>500 Employees </li></ul></ul><ul><li>Information </li></ul><ul><li> </li></ul><ul><li>Three Phase </li></ul><ul><li>SBA’s role </li></ul><ul><ul><li>Directs implementation </li></ul></ul><ul><ul><li>Coordinate information </li></ul></ul><ul><ul><li>Review progress </li></ul></ul>
    25. 25. How to Get Help <ul><li>Arizona District Office </li></ul><ul><li>(602) 745-7200 </li></ul><ul><li>SBA On-Line </li></ul><ul><li> </li></ul><ul><li>Local Information: </li></ul><ul><li> </li></ul><ul><li>SBA Answer Desk </li></ul><ul><li>1 800 U ASK SBA </li></ul>
    26. 26. Any Questions??? Thank You!