Transcript The Small Business Administration

The Small Business
Administration
WWW.SBA.GOV
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Established in 1953
Government funded organization that helps
small businesses to get started and to keep
them well maintained
Mission Statement:
– “Maintain and strengthen the nation’s economy by
aiding, counseling, assisting, and protecting the
interests of small businesses and by helping
families and businesses recover from natural
disasters.”
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5 Main Areas of Assistance
– Assistance with Starting Up a Small
Business
– Technical Assistance
– Financial Assistance
– Special Interests
– Advocacy, Laws, and Regulations
Assistance with Starting Up a Small
Business
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SBA helps business owners plan for their small
business
Asks questions that the owners need to answer
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What is the product/service that the business offers?
Does the business have a niche?
What is your competition?
What are your business goals?
What are your personal goals?
Are you willing to put all of your time into the business?
Is entrepreneurship right for you?
How well are you at making decisions?
How are you with dealing with other personalities?
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Helps in the creation of a well-organized,
informative business plan
– SBA offers an outline for owners to go by when
writing the plan
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Introduction
Marketing of the business
Financial management of the business
Operations of the business
Conclusion
– After the plan is written, the owner can use
services offered by the SBA (SCORE or SBDC’s) to
have an experienced business counselor read the
plan and to help improve it
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SBA offers assistance on how to write a good
loan proposal
– Tells business owners what should be included in
a proposal to successfully receive loans
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General information about the type of loan needed
How much the loan needs to be
What the loan will be used specifically for
A business description
Management profile
Marketing information
Financial information that includes financial statements
of the business, personal financial statements, and
collateral the owner is willing to put up in order to secure
the loan
Technical Assistance
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Includes services that aid in training and
counseling for small businesses
Service Corps of Retired Executives (SCORE)
– Resource partner of the SBA that offers free
counseling and training to small businesses
– Over 10,500 SCORE volunteers all over the U.S.
– Representatives of SCORE help in different ways
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Answer questions that business owners have
Teach entrepreneurs how to write business plans and
apply for loans
Help business owners improve their management skills
– SCORE service also offers low cost workshops to
small business owners
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Write business plans
Learn about importing/exporting
Small Business Development Centers (SBDC)
– SBA’s largest resource partner
– Over 1,100 lead and service centers all around the
U.S.
– Offers assistance with financial, marketing,
production, organization, engineering, and
technical problems
– The centers provide special programs to women,
minorities, and veterans
Financial Assistance
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SBA offers assistance for small businesses financially
to be established and to expand
Business Loan Programs and the Disaster Loan
Program provide most of this financial assistance
Business Loan Programs
– SBA does not dispense loans, it only guarantees loans by
backing them by a certain amount if the business fails to pay
the loan back
– Loan Prequalification Program
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SBA helps improve and strengthen business’s loan applications
of $250,000 or less so they can be approved by the SBA prior
to being sent to the actual lenders
– Basic 7(a) Loan Guarantee Program
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For starting up businesses and preexisting businesses
Primary business loan program offered by the SBA
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Purpose of the loan program is to help small businesses acquire
the needed financing for their business that they could not get
from normal lenders
Money obtained from this loan is used for working capital,
machinery and equipment, furniture and fixtures, land and
building, leasehold improvements, and debt financing
– Certified Development Company (CDC) 504 Loan Program
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Loan used for real estate, machinery, and equipment in order
for a business to expand or modernize
This type of program involves trying to secure a loan from a
private-sector lender with a senior lien that covers 50% of the
project cost, a Certified Development Company with a junior
lien that covers 40% of the loan, and a 10% equity
contribution from the borrowing business owner
CDC Program is funded by a 100% guarantee debenture from
the SBA up to $1 million (and sometimes $1.3 million)
– Micro-Loan Program
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Offered to small businesses and not-for-profit childcare centers
to provide short-term loans of up to $35,000
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Money from the loan used for working capital and for
purchasing inventory, supplies, furniture, fixtures, machinery,
and/or equipment
Average loan goes for $10,500
Not used for paying off debts or buying real estate
Disaster Assistance
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Purpose of disaster loans is to bring the
business back to the same state it was in
before damage was done by the natural
disaster
SBA offers loans of up to $1.3 million for
physical damage done to the business
Special Interests
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Office of Women’s Business Ownership (OWBO)
– Aids in the growth of women owned businesses
– OWBO offers programs that assist women with business
training, technical assistance, and also provide credit and
capital, federal contracts, and international trade
opportunities to women’s small businesses
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Minorities
– SBA offers different programs to give minority individuals the
opportunity to start their own businesses
– 8(a) Business Development Program
 Small businesses that qualify for this program must have
an owner who is socially or economically disadvantaged
 This program teaches these businesses how to compete
for Federal contracting and how to get subcontracting
jobs through larger businesses
– Small Disadvantaged Business (SDB) Program
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SBA helps small, socially and economically disadvantaged
people’s businesses make special bidding benefits available to
them
Similar to 8(a) Program but it is aimed more towards Federal
Procurement to fight discrimination
SDB Program allows these businesses to take advantage of
price adjustments of up to 10% when making bids on Federal
contracts
– HUBZone (Historically Underutilized Business Zone) Program
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Also helps disadvantaged businesses compete for contracts
Purpose is to create jobs and build economic development in
urban and rural communities in order to improve these areas
– Native American Affairs Program
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Aimed towards American Indians, Native Alaskans, and Native
Hawaiians
Program ensures that these groups who want to create,
develop, and expand a small business have access to programs
for entrepreneurial development, lending, and procurement
Advocacy, Laws, and Regulations
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Purpose is for SBA to assist small businesses in
dealing with government regulations concerning
small businesses
Office of Advocacy
– Acts as a mediator between small businesses and the
government in order to help small businesses
– Takes concerns, views, and interests of small businesses to
leaders in government (Congress) to make them aware of
issues in small businesses
– Doing this helps the government make regulations and
standards of small businesses more to their needs
– Office of Advocacy is a source to small businesses for
statistics that they may want to know and be aware of
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The Ombudsman Program
– Helps small businesses find out what regulations they need
to abide by and to help with excessive, unfair regulatory
enforcement by federal agencies
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Such actions would be repeated audits and investigations,
excessive fines, penalties, and retaliation
– Ombudsman Program helps these small businesses and
federal agencies come to terms where the federal agency
becomes aware of their actions and can review the fairness
of them