Tag: SBA

SBA Loans for Your Startup #home #business #ideas #for #women

#start up business loans

#

SBA Loans for Your Startup

Despite what you might see on late-night infomercials or some websites, none of the SBA s loan programs involve free money, government grants or no-interest loans. In fact, the SBA doesn t even lend funds directly to entrepreneurs–you ll need to strike up a relationship with a loan officer at your local bank, credit union or nonprofit financial intermediary to access the programs.

But once you do, there s an array of resources aimed at getting you the capital you need to start or expand your small business. Last year, more than $50 million in SBA loans were being provided per day to U.S. small businesses. For this month s column, I thought I d review the latest descriptions and eligibility criteria for the SBA s three most popular loan programs.

7(a) Loan Program
The 7(a) is the SBA s most popular loan program. As a small-business owner, you can get up to $750,000 from your local 7(a) lender, backed by a partial guarantee from the SBA. Note that the SBA is not lending you any money directly. What they are doing is making it less risky for a local lender to provide you with financing. 7(a) loans are typically used for working capital, asset purchases and leasehold improvements. All the owners of a business who hold an ownership stake of 20 percent or more are required to personally guarantee the loan.

Once your lender decides that 7(a) money is what you need, you ll probably start hearing the names of the different 7(a) programs. For example if you re borrowing less than $150,000, you may be headed toward the Lowdoc program, which was created in 1993 to reduce burdensome paperwork. A Lowdoc loan application is a one-page form; your application is on one side and the lender s request to the SBA for the guaranty for your loan is on the other. The SBA responds to Lowdoc applications within 36 hours.

The SBA Express is a program for lenders with a good SBA-lending track record. It s aimed at getting money–in this case, as much as $250,000–quickly into the hands of entrepreneurs. Based on the success of the SBA Express program, the SBA initiated CommunityExpress, specifically designed to improve access to capital for low- and moderate-income entrepreneurs and to provide both pre- and post-loan technical assistance.

Eligibility: The eligibility criteria for the 7(a) program are the broadest of all the SBA loan programs, but they re still quite restrictive for startups and businesses related to financial services. See this page on the SBA s website for a list of the types of business that are eligible. In general, all SBA programs are targeted at small companies (that is, businesses with less than $7 million in tangible net worth and less than $2.5 million in net income), but typically most banks won t lend to startup businesses that don t have two to three years worth of financial statements and some owner s equity in the business. Some banks will allow you to use money from relatives as part of your equity, but you re required to formalize these small business loans with a repayment plan that s subordinate to the bank debt.

504 Loan Program
The 504 loan program is intended to supply funds for asset purchases, such as land or equipment. Typically, the asset purchase is funded by a loan from a bank or other lender in your area, along with a second loan from a certified development company (CDC) that s funded with an SBA guarantee for up to 40 percent of the value of the asset–which is generally a loan of up to $1 million–and a contribution of 10 percent from the equity of the borrower. This financing structure helps the primary lender–the bank–reduce its exposure by relying on the CDC and the SBA to shoulder much of the risk.

Eligibility: Like the 7(a) program, the 504 program is restricted to small businesses with less than $7 million in tangible net worth and less than $2.5 million in net income. However, since funds from 504 loans can t be used for working capital or inventory, consolidating or repaying debt, or refinancing, this program tends to exclude most service businesses that need to purchase land or equipment. Personal guarantees are also required for 504 loans.

7(m) Microloan Program
The Microloan program is presently under budgetary review, and the political winds aren t currently blowing in its favor. The program is intended to provide small loans of up to $35,000 that can be used for a broad range of purposes to start and grow a business. Unlike the 7(a) program, the funds to be loaned don t come from banks; rather, they come directly from the SBA (now you know why it s unpopular with the folks in charge of the budget) and are administered to business owners via nonprofit community-based intermediaries. To find the name of an intermediary micro-lender in your area, visit this page of the SBA s website.

Eligibility: The Microloan program is startup friendly. All new businesses are eligible to apply. Although the maximum loan amount is $35,000, the average loan is approximately $10,000. The only catch is that Microloan borrowers typically have to enroll in technical assistance classes administered by the micro-lender intermediaries. For some entrepreneurs, this is a very helpful resource that provides cost-effective business training. Others, however, perceive it as a waste of time, although it s a necessary pre-condition to getting a Microloan.

Although I promised reviews of just the three top SBA loan programs, I didn t want to fail to mention two other special purpose loan programs targeted at serving particular types of businesses. The Export Working Capital Program provides short-term working capital to small, export businesses, and the DELTA program provides both financial and technical assistance to help businesses dependent on defense installations transition to civilian markets. You can log on to the SBA s website to learn more about these two programs.

The long and short of it is, if you need small-business loan capital, there s probably an SBA program out there for you.





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How to Find the Right SBA Loan for Your Small Business #business #startup #loans

#small business administration loans

#

How to Find the Right SBA Loan for Your Small Business

Small businesses are the backbone of the U.S. economy: According to data from the 2010 U.S. Census, there are 27.9 million small businesses registered in the United States, employing 120 million people almost half of the nation s workforce.

Part of what the Small Business Administration (SBA) does is help America s small businesses secure the funding they need to operate and grow. As a federal government agency, the SBA does not lend small businesses money directly. Instead, it sets guidelines for loans that are made by its partners, which include banks, credit unions, community development organizations and microlending institutions. The SBA guarantees a portion of these loans granted by these institutions will be repaid, eliminating some of the risk for lenders.

Kale Gaston, head of the SBA Lending Group for TD Bank in Greenville, S.C. said SBA loans do a great job of helping lenders say yes to borrowers. He also noted that SBA programs provide better access to capital and credit enhancement for small business owners. For example, since the SBA guaranty lowers the risk in case of a loan default, lenders are able to provide funding when the down payment available is too low or the business s cash flow is not high enough for traditional options.

SBA lenders can provide longer terms as well. Instead of five or 10 years for a real estate purchase with a balloon payment at the end, the lender can give terms for 25 years, eliminating the balloon (i.e. final payment) or need to refinance every few years, Gaston said. For shorter-term assets, like equipment, terms could go to 10 years instead of the usual three to five years.

SBA loan programs

The SBA s loan programs are designed specifically for small business owners who don t have access to other reasonably termed financing. There are four main types of loan programs:

7(a) loan program: This is the SBA s primary program to help startups and existing small businesses obtain financing. 7(a) loans are the most basic and most commonly used type of loan, as well as the most flexible. The money can be used for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, purchasing or renovating land and buildings, leasehold improvements and debt refinancing. Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. Borrowers can apply through a participating lender institution.

CDC/504 loan program: This program provides businesses with long-term, fixed-rate financing for major assets, such as land and buildings. The loans are typically structured with the SBA providing 40 percent of the total project costs, a participating lender covering up to 50 percent and the borrower putting up the remaining 10 percent. Funds from a 504 loan can be used to purchase existing buildings, land or machinery, and to construct or renovate facilities. These loans cannot be used for working capital or inventory. Under the 504 program, a business qualifies if it has a tangible net worth of less than $15 million and an average net income of $5 million or less after federal income taxes for the two years before application. The maximum amount of a 504 loan is $5 million.

Microloan program: This program offers very small loans to startups, or newly established or growing small businesses. The loans can be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery or equipment. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit organizations with experience in lending and technical assistance. Those intermediaries then make loans of up to $50,000, with the average loan being about $13,000. The loan cannot be used to pay existing debts or to purchase real estate.

Disaster loans: The SBA offers this option to businesses that have been affected by a declared disaster. These low-interest loans can be used to repair or replace damaged real estate, personal property, machinery, equipment, inventory and business assets.

Further details on each type of loan program can be found on the SBA s website .

What you ll need to apply

When applying for an SBA loan, you ll need to fill out forms and documents for the specific loan you re trying to get. The SBA also encourages borrowers to gather some basic information that all lenders will ask for, regardless of the loan type. The following items are usually required:

  • Personal background and financial statements
  • Business financial statements
  • Profit-and-loss statement (three years)
  • Current within the last six months
  • List of debts
  • Projected financial statements
  • Business certificate/license
  • Income tax returns
  • R sum s for key team members
  • Business overview and history
  • Business lease

The SBA also advises small businesses applying for a loan to be prepared to answer several questions:

  • Why are you applying for this loan?
  • How will the loan proceeds be used?
  • What assets need to be purchased, and who are your suppliers?
  • What other business debt do you have, and who are your creditors?
  • Who are the members of your management team?

Why your business plan matters

Whether you re a new startup or an established company, the key to a successful application is a well-written business plan .

The business plan not only is the road map that will guide the business from planning to startup to (hopefully) success, but also will show any potential lender that the potential business owner does have a clear view and understanding of the business, how to run it and, most importantly, how the loan will be repaid, David Hall, a public affairs specialist with the SBA in Washington, D.C. said in an email interview with Business News Daily.

Gaston agreed, noting that lenders want to know how knowledgeable you are about your business and the competitive market.

The concept may be great, but what the lender is looking for is that the individual is driven, capable and determined, Gaston said. You really need to understand what you are doing every step of the way and be able to convey that to the lender during the application process.

Hall also recommended that business owners take full advantage of the business planning resources offered by the SBA and its partners, such as SCORE. SBDCs (Small Business Development Centers) and WBCs (Women Business Centers).

Finding a lender

While Gaston acknowledged that applying for an SBA loan is a process, she said working with a lender that has experience can make that process a lot easier. To find experienced SBA lenders in your area, he suggested talking to folks locally in the market and looking for a lender that is part of the SBA s Preferred Lender program. This program gives thousands of lenders per year delegated authority to approve loans based on certain criteria, shortening the time period between application and approval.

You can find SBA lenders by going online at sba.gov. contacting local accountants and attorneys, and looking for lenders with a large local presence. SBDCs also provide document support and lender referrals.

The SBA program drives a tremendous amount of value in the economy, lending approximately $30 billion to small businesses annually, Gaston said. It takes businesses to the next level, is appropriately structured and enables them to be successful.

Additional reporting by Business News Daily contributor Elizabeth Palermo.

With an Associate s Degree in Business Management and nearly twenty years in senior management positions, Marci brings a real life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Business News Daily in 2015.

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What is the SBA Microloan Program?

  • Writing a Business Plan: Tips from the SBA





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  • How to use the SBA for business acquisition financing – Smart Business Magazine #sba

    #business acquisition loan

    #

    How to use the SBA for business acquisition financing

    Most businesses have intangible assets that are difficult to value and nearly impossible to collateralize. You will hear terms like “blue sky” or “goodwill” to describe these assets.

    Due to the more flexible collateralization standards associated with U.S. Small Business Administration (SBA) loans, these assets can be financed along with the more tangible assets that are a part of the business acquisition. This is just one reason why a business owner should consider an SBA loan for a change of ownership or business acquisition, over a conventional loan.

    Smart Business spoke with Romona Davis, vice president of SBA Commercial Lending at Ridgestone Bank. about the advantages of utilizing the SBA for business acquisition financing.

    Beyond flexible collateralization standards, why else are SBA loans more attractive?

    Conventional loans for business acquisitions are based on a three- or five-year term. This can make it tough for the business to meet the debt service requirements of most lenders. Utilizing an SBA loan, the acquisition can be stretched out over seven or even 10 years. This lowers the payments and makes it easier for the borrower to hit the debt service targets of the lender.

    Stretching out the amortization of the loan also frees up additional cash flow for the new owner of the business. He or she may then use that cash flow to invest in marketing, implementation of new initiatives or adding a product line. Cash flow is king.

    In addition, long-term amortization can help with the ebbs and flows of business that inevitably arise. If you are in a downslope when a three-year conventional loan becomes due, the bank might put you in forbearance or impose monthly renewal fees. With the SBA, you have something in place long term.

    Is seller financing sometimes involved in a business acquisition?

    Yes, quite often. With SBA financing of a business acquisition, a seller’s note can be used as a portion of the required equity injection.

    Typically, lenders in a business acquisition scenario prefer a 25 percent equity injection from the borrower. This can be a tough requirement for many borrowers. If the seller agrees to hold back a note, and it is structured correctly, that note can be counted as part of the borrower’s equity injection, thus making it easier to come up with the needed equity.

    Also, the sellers are often sole proprietors or family businesses and they want to see their legacy carried forward. Keeping the seller engaged assists the buyer in making the transition and assures the bank there is a team in place that can make it longer term.

    What was the change the SBA made to its ownership rules and why?

    The SBA removed the liquidity requirement a few years back. Without that requirement, the SBA made it possible for businesses with owners who have strong liquidity to obtain financing through an SBA loan. Removing the liquidity requirement allows borrowers who may not have good liquidity to bring an equity partner who has liquidity to the table to help them get an approval.

    The reason the SBA made this change was to provide borrowers more flexibility in how they can structure their business when they seek SBA financing.

    When business owners use an SBA loan for a business acquisition, what do they need to understand about the lending process?

    Business acquisition loans are complex. Anyone who is considering utilizing bank financing for a business acquisition should engage his or her banker early in the process. Ideally, before you even start negotiating with the seller.

    Your banker can advise you on areas where you can be flexible in negotiation and areas where you need to be less flexible. He or she also can alert the buyer to some of the pitfalls to avoid.

    Since a lot of information will be needed from both parties, the sooner documents are provided, the easier the process becomes. Also, be sure there is open and honest communication from the start. Don’t leave any surprises to the end, or your financing can be delayed or compromised.

    Always make sure you are dealing with a lender who has SBA experience and a bank that is a preferred lending partner with the SBA.

    Equal Housing Lender. Member FDIC

    Insights Banking Finance is brought to you by Ridgestone Bank

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    SBA Business Course – Palo Alto Software #business #partnership

    #sba business plan

    #

    SBA Course

    In this webinar for the U.S. Small Business Administration, business planning expert Tim Berry helps entrepreneurs and small businesses better understand how to create a business plan.

    SBA s participation in this co-sponsorship is not an endorsement of the views, opinions, products or services of any cosponsor or other person or entity.

    All SBA programs, services and cosponsored activities are extended to the public on a nondiscriminatory basis.

    Use this form to request the certificate of completion after finishing the course.

    Reasonable arrangements for persons with disabilities will be made if requested at least two weeks in advance. You can contact our customer care team to make such a request.

    Co-sponsorship Authorization ##: 05-6010-71

    This website may contain hypertext links to information and websites created and maintained by other public and private entities. This information and these links are not owned or sponsored by the U.S. Small Business Administration and are provided for the user s convenience. The Federal Government or SBA is not responsible for the content, accuracy, relevance, timeliness or completeness of any websites or information that may be accessed from this site. Furthermore, the inclusion of such links does not constitute or imply an endorsement by the Federal Government or SBA of any organizations or company, or its opinions, products, or services. Please use caution and use your best judgment when considering a product, service or opinion offered by a linked website.

    Have issues? Our Specialist Line can help.

    Just 26.36/month

    Get into the intricacies of Business Plan Pro with one of our gurus.

    We ll serve up a heap of Business Plan help just for you. Sign up today!

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    How to use the SBA for business acquisition financing – Smart Business Magazine #new

    #business acquisition loan

    #

    How to use the SBA for business acquisition financing

    Most businesses have intangible assets that are difficult to value and nearly impossible to collateralize. You will hear terms like “blue sky” or “goodwill” to describe these assets.

    Due to the more flexible collateralization standards associated with U.S. Small Business Administration (SBA) loans, these assets can be financed along with the more tangible assets that are a part of the business acquisition. This is just one reason why a business owner should consider an SBA loan for a change of ownership or business acquisition, over a conventional loan.

    Smart Business spoke with Romona Davis, vice president of SBA Commercial Lending at Ridgestone Bank. about the advantages of utilizing the SBA for business acquisition financing.

    Beyond flexible collateralization standards, why else are SBA loans more attractive?

    Conventional loans for business acquisitions are based on a three- or five-year term. This can make it tough for the business to meet the debt service requirements of most lenders. Utilizing an SBA loan, the acquisition can be stretched out over seven or even 10 years. This lowers the payments and makes it easier for the borrower to hit the debt service targets of the lender.

    Stretching out the amortization of the loan also frees up additional cash flow for the new owner of the business. He or she may then use that cash flow to invest in marketing, implementation of new initiatives or adding a product line. Cash flow is king.

    In addition, long-term amortization can help with the ebbs and flows of business that inevitably arise. If you are in a downslope when a three-year conventional loan becomes due, the bank might put you in forbearance or impose monthly renewal fees. With the SBA, you have something in place long term.

    Is seller financing sometimes involved in a business acquisition?

    Yes, quite often. With SBA financing of a business acquisition, a seller’s note can be used as a portion of the required equity injection.

    Typically, lenders in a business acquisition scenario prefer a 25 percent equity injection from the borrower. This can be a tough requirement for many borrowers. If the seller agrees to hold back a note, and it is structured correctly, that note can be counted as part of the borrower’s equity injection, thus making it easier to come up with the needed equity.

    Also, the sellers are often sole proprietors or family businesses and they want to see their legacy carried forward. Keeping the seller engaged assists the buyer in making the transition and assures the bank there is a team in place that can make it longer term.

    What was the change the SBA made to its ownership rules and why?

    The SBA removed the liquidity requirement a few years back. Without that requirement, the SBA made it possible for businesses with owners who have strong liquidity to obtain financing through an SBA loan. Removing the liquidity requirement allows borrowers who may not have good liquidity to bring an equity partner who has liquidity to the table to help them get an approval.

    The reason the SBA made this change was to provide borrowers more flexibility in how they can structure their business when they seek SBA financing.

    When business owners use an SBA loan for a business acquisition, what do they need to understand about the lending process?

    Business acquisition loans are complex. Anyone who is considering utilizing bank financing for a business acquisition should engage his or her banker early in the process. Ideally, before you even start negotiating with the seller.

    Your banker can advise you on areas where you can be flexible in negotiation and areas where you need to be less flexible. He or she also can alert the buyer to some of the pitfalls to avoid.

    Since a lot of information will be needed from both parties, the sooner documents are provided, the easier the process becomes. Also, be sure there is open and honest communication from the start. Don’t leave any surprises to the end, or your financing can be delayed or compromised.

    Always make sure you are dealing with a lender who has SBA experience and a bank that is a preferred lending partner with the SBA.

    Equal Housing Lender. Member FDIC

    Insights Banking Finance is brought to you by Ridgestone Bank

    Post navigation

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    SBA Loans – Small Business Administration Loans #business #seminars

    #sba loans

    #

    Small Business Administration (SBA) Loans

    Proud to be one of the Premier SBA Lenders

    As part of our commitment to the growth of small businesses nationwide, U.S. Bank is a leading participant in the lending programs of the U.S. Small Business Administration (SBA). Since 1976, we ve provided more than $6 billion in SBA-guaranteed financing solutions to thousands of small businesses in America.

    SBA Express Loans

    SBA loans are backed by government-sponsored loan guarantees and are available to for-profit businesses in virtually every industry.

    SBA 7(a) and 504 Loans

    SBA loans provide financing for almost any business purpose, including real estate purchase, business acquisition or startup, equipment, inventory, and competitor and partner buyouts. Loan amounts from $250,000 to $11.25 million.

    Referral Network Resources

    If you re a financial or professional in commercial real estate, lending or a finance-related industry, learn how our SBA Division can assist you and your small business customers.

    What are SBA loans?

    The U.S. Small Business Administration is a federal agency committed to furthering the growth and development of small businesses. One of the ways it does this is by guaranteeing loans to small businesses made through lending partners nationwide. U.S. Bank is both an SBA Preferred Lender and one of America s most experienced SBA lenders.

    The SBA does not make loans directly to small businesses. Rather, it sets the guidelines for loans, which are made by lending partners nationwide, including banks and economic development organizations. The SBA guarantees a percentage of the loan, minimizing risk to the lending partners and increasing the possibility that small businesses will receive the funds they need.

    Does my business qualify for a Small Business Administration loan?

    Small businesses must meet certain criteria to qualify for an SBA loan, including size requirements, financial standing and being in a for-profit industry. SBA loans cannot be made to a small business if the borrower has access to other financing that offers reasonable terms. In addition, a small business must meet the credit qualifications of the lending partner.

    Advantages include lower down payments and longer repayment terms.

    Benefits of SBA loans include lower down payments and longer repayment terms than conventional bank loans, enabling small businesses to keep their cash flow for operational expenses and spend less on debt repayment.

    • Up to 90% financing
    • Loans up to $11.25 million
    • Terms up to 25 years
    • Fixed and variable rate options
    • No balloon payments
    • Most for-profit small businesses are eligible
    • SBA loans originated at U.S. Bank are serviced by U.S. Bank, ensuring personalized service

    There’s an SBA loan for almost any business need.

    U.S. Bank offers five types of SBA loans for businesses in almost any for-profit industry. Loan amounts range from $25,000 to more than $11.25 million and are available for a variety of business purposes, including:

    • Commercial real estate purchases
    • Business acquisition or expansion
    • Construction
    • Equipment, inventory or working capital
    • Debt refinancing

    Equal Housing Lender

    Subject to credit approval and program guidelines.

    Financing maximums and terms are determined by borrower qualifications and use of funds. U.S. Bank and its representatives do not provide tax advice. Consult an advisor regarding a particular financial situation. For any deferred or promotional payment period, interest accrues and is amortized over the remainder of the term and outstanding balance. Deposit products offered by U.S. Bank National Association. Member FDIC.

    The 3.49% interest rate applies to new or used equipment and vehicle loans up to 100% LTV and terms up to 36 months for credit qualified applicants. Disclosed rate reflects 0.50% discount based on automatic monthly payments from a U.S. Bank Business Checking account. Standard fees apply. Advertised rate is as of 10/22/15 and is subject to change without notice based on market conditions. See a banker for details.





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    What SBA Doesn – t Offer #restaurant #business #plan

    #small business grants

    #

    SBA does NOT provide grants for starting and expanding a business.

    Government grants are funded by your tax dollars and, therefore, require very stringent compliance and reporting measures to ensure the money is well spent. As you can imagine, grants are not given away indiscriminately.

    Grants from the Federal government are authorized and appropriated through bills passed by Congress and signed by the President. The grant authority varies widely among agencies. SBA has authority to make grants to non-profit and educational organizations in many of its counseling and training programs, but does not have authority to make grants to small businesses. The announcements for the counseling and training grants will appear on grants.gov. If Congress authorizes Specific Initiative Grants, organizations receiving such grants will receive individual notifications.

    Some business grants are available through state and local programs, nonprofit organizations and other groups. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. The amount of the grant money available varies with each business and each grantor.

    If you are not one of these specialized business, both federal and state government agencies provide financial assistance programs that help small business owners obtain loans and venture capital financing from commercial lenders.

    Application Forms for Non-Construction Grants

    Application Forms for Construction Grants





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    Records of the Small Business Administration SBA #best #home #business

    #the small business administration

    #

    Records of the Small Business Administration [SBA]

    Overview of Records Locations

    Table of Contents

    • 309.1 Administrative History
    • 309.2 Records of the Small Defense Plants Administration 1951-53
    • 309.3 General Records of the Small Business Administration 1954-68
    • 309.4 Records OF SBA Field Offices 1955-82
      • 309.4.1 Records of SBA Region I, Boston, MA (CT, ME, MA, NH, RI, VT)
      • 309.4.2 Records of SBA Region V, Chicago, IL (IL, IN, OH, MI, MN, WI)
      • 309.4.3 Records of SBA Region VI, Dallas, TX (AR, LA, NM, OK, TX)
      • 309.4.4 Records of SBA Region X, Seattle, WA (AK, ID, OR, WA)
    • 309.5 Motion Pictures (General) 1953-87
    • 309.6 Video Recordings (General) ca. 1969, ca. 1975, 1980-89
    • 309.7 Sound Recordings (General) 1980
    • 309.8 Machine-Readable Records (General) 1968-91 6 data sets

    309.1 Administrative History

    Established: As an independent agency by the Small Business Act (67 Stat. 232), July 30, 1953.

    • Small Defense Plants Administration (1951-53)

    Functions: Provides financial assistance to small businesses and investment companies and to state and local development companies. Licenses and regulates small business investment companies.

    Finding Aids: Forrest R. Holdcamper, comp. Preliminary Inventory of the Records of the Small Business Administration, NC 71 (Sept. 1964).

    Related Records: Record copies of publications of the Small Business Administration and its predecessor in RG 287, Publications of the U.S. Government.

    309.2 Records of the Small Defense Plants Administration
    1951-53

    History: Established by the Defense Production Act Amendments of 1951 (65 Stat. 131), July 31, 1951, to encourage small businesses to contribute to defense production. Abolished, effective July 31, 1953, by the Defense Production Act Amendments of 1953 (67 Stat. 131), June 30, 1953. Liquidation activities and prime contract administration transferred to the SBA by the Small Business Act of 1953, and EO 10504, December 1, 1953.

    Textual Records: General correspondence, 1951-53. Sample case files relating to tax amortization, materials and equipment, contract procurement, certificates of competency, loans, and joint determination, 1951-53. General subject files, 1951-53. Records of Director of Contract Procurement Charles H. Swisher, relating primarily to the ammunition program, 1951-53.

    309.3 General Records of the Small Business Administration
    1954-68

    Textual Records: Administrative subjects files, 1953-72 (372 ft.). Administrative and correspondence files of the Administrator, 1982-83. Personal subject files of Administrator James C. Sanders, 1983-84. National directives, 1965-75 (300 fiche). Sample case files relating to applications for business loans that were declined, canceled, or withdrawn, 1954- 55. Minutes of meetings, and conference proceedings, of the National Advisory Council and of regional and state advisory groups, 1954-68. Advisory Council files, 1969-70. Minutes of the Loan Review Board, 1953-56. Research reports from SBA sponsored studies, 1961-62.

    309.4 Records OF SBA Field Offices
    1955-82

    309.4.1 Records of SBA Region I, Boston, MA (CT, ME, MA, NH, RI, VT)

    Textual Records (in Boston): Advisory Council records maintained by the Concord, NH, District Office, 1971-74.

    309.4.2 Records of SBA Region V, Chicago, IL (IL, IN, OH, MI, MN, WI)

    Textual Records (in Chicago): Advisory Council records maintained by the Chicago District Office, 1974-77.

    309.4.3 Records of SBA Region VI, Dallas, TX (AR, LA, NM, OK, TX)

    Textual Records (in Fort Worth): Advisory Council records maintained by the Dallas, TX, Regional Office, 1972-82. General correspondence of district and community advisory councils, 1967- 70. Records relating to Disaster Field Offices, 1955-69.

    309.4.4 Records of SBA Region X, Seattle, WA (AK, ID, OR, WA)

    Textual Records (in Seattle): Advisory Council records maintained by the Boise, ID, District Office, 1966-72.

    309.5 Motion Pictures (General)
    1953-87
    74 reels

    Informational and instructional films for prospective small business owners, covering such areas as advertising, marketing, employee relations, women in business, customer service, financial analysis, cash flow forecasting, recordkeeping, and theft prevention (75 reels).

    309.6 Video Recordings (General)
    ca. 1969, ca. 1975, 1980-89

    Pension, made for information and training, ca. 1969 (1 item). Your Business Resource, explaining SBA mission and functions, ca. 1975 (1 item). Office of Advocacy productions, 1980-89 (25 items).

    Structuring a State’s Small Business Program, 1980 (3items).

    309.8 Machine-Readable Records (General)
    1968-91
    6 data sets

    Loan Accounting Cash Collection System (LACCS) data files for the period 1968-88 and for fiscal years 1989 and 1990, consisting of public domain files and unsuppressed ( archives ) files, with supporting documentation.

    Bibliographic note: Web version based on Guide to Federal Records in the National Archives of the United States. Compiled by Robert B. Matchette et al. Washington, DC: National Archives and Records Administration, 1995.
    3 volumes, 2428 pages.

    This Web version is updated from time to time to include records processed since 1995.

    Guide to Federal Records





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    How to Find the Right SBA Loan for Your Small Business

    Small businesses are the backbone of the U.S. economy: According to data from the 2010 U.S. Census, there are 27.9 million small businesses registered in the United States, employing 120 million people almost half of the nation s workforce.

    Part of what the Small Business Administration (SBA) does is help America s small businesses secure the funding they need to operate and grow. As a federal government agency, the SBA does not lend small businesses money directly. Instead, it sets guidelines for loans that are made by its partners, which include banks, credit unions, community development organizations and microlending institutions. The SBA guarantees a portion of these loans granted by these institutions will be repaid, eliminating some of the risk for lenders.

    Kale Gaston, head of the SBA Lending Group for TD Bank in Greenville, S.C. said SBA loans do a great job of helping lenders say yes to borrowers. He also noted that SBA programs provide better access to capital and credit enhancement for small business owners. For example, since the SBA guaranty lowers the risk in case of a loan default, lenders are able to provide funding when the down payment available is too low or the business s cash flow is not high enough for traditional options.

    SBA lenders can provide longer terms as well. Instead of five or 10 years for a real estate purchase with a balloon payment at the end, the lender can give terms for 25 years, eliminating the balloon (i.e. final payment) or need to refinance every few years, Gaston said. For shorter-term assets, like equipment, terms could go to 10 years instead of the usual three to five years.

    SBA loan programs

    The SBA s loan programs are designed specifically for small business owners who don t have access to other reasonably termed financing. There are four main types of loan programs:

    7(a) loan program: This is the SBA s primary program to help startups and existing small businesses obtain financing. 7(a) loans are the most basic and most commonly used type of loan, as well as the most flexible. The money can be used for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, purchasing or renovating land and buildings, leasehold improvements and debt refinancing. Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. Borrowers can apply through a participating lender institution.

    CDC/504 loan program: This program provides businesses with long-term, fixed-rate financing for major assets, such as land and buildings. The loans are typically structured with the SBA providing 40 percent of the total project costs, a participating lender covering up to 50 percent and the borrower putting up the remaining 10 percent. Funds from a 504 loan can be used to purchase existing buildings, land or machinery, and to construct or renovate facilities. These loans cannot be used for working capital or inventory. Under the 504 program, a business qualifies if it has a tangible net worth of less than $15 million and an average net income of $5 million or less after federal income taxes for the two years before application. The maximum amount of a 504 loan is $5 million.

    Microloan program: This program offers very small loans to startups, or newly established or growing small businesses. The loans can be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery or equipment. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit organizations with experience in lending and technical assistance. Those intermediaries then make loans of up to $50,000, with the average loan being about $13,000. The loan cannot be used to pay existing debts or to purchase real estate.

    Disaster loans: The SBA offers this option to businesses that have been affected by a declared disaster. These low-interest loans can be used to repair or replace damaged real estate, personal property, machinery, equipment, inventory and business assets.

    Further details on each type of loan program can be found on the SBA s website .

    What you ll need to apply

    When applying for an SBA loan, you ll need to fill out forms and documents for the specific loan you re trying to get. The SBA also encourages borrowers to gather some basic information that all lenders will ask for, regardless of the loan type. The following items are usually required:

    • Personal background and financial statements
    • Business financial statements
    • Profit-and-loss statement (three years)
    • Current within the last six months
    • List of debts
    • Projected financial statements
    • Business certificate/license
    • Income tax returns
    • R sum s for key team members
    • Business overview and history
    • Business lease

    The SBA also advises small businesses applying for a loan to be prepared to answer several questions:

    • Why are you applying for this loan?
    • How will the loan proceeds be used?
    • What assets need to be purchased, and who are your suppliers?
    • What other business debt do you have, and who are your creditors?
    • Who are the members of your management team?

    Why your business plan matters

    Whether you re a new startup or an established company, the key to a successful application is a well-written business plan .

    The business plan not only is the road map that will guide the business from planning to startup to (hopefully) success, but also will show any potential lender that the potential business owner does have a clear view and understanding of the business, how to run it and, most importantly, how the loan will be repaid, David Hall, a public affairs specialist with the SBA in Washington, D.C. said in an email interview with Business News Daily.

    Gaston agreed, noting that lenders want to know how knowledgeable you are about your business and the competitive market.

    The concept may be great, but what the lender is looking for is that the individual is driven, capable and determined, Gaston said. You really need to understand what you are doing every step of the way and be able to convey that to the lender during the application process.

    Hall also recommended that business owners take full advantage of the business planning resources offered by the SBA and its partners, such as SCORE. SBDCs (Small Business Development Centers) and WBCs (Women Business Centers).

    Finding a lender

    While Gaston acknowledged that applying for an SBA loan is a process, she said working with a lender that has experience can make that process a lot easier. To find experienced SBA lenders in your area, he suggested talking to folks locally in the market and looking for a lender that is part of the SBA s Preferred Lender program. This program gives thousands of lenders per year delegated authority to approve loans based on certain criteria, shortening the time period between application and approval.

    You can find SBA lenders by going online at sba.gov. contacting local accountants and attorneys, and looking for lenders with a large local presence. SBDCs also provide document support and lender referrals.

    The SBA program drives a tremendous amount of value in the economy, lending approximately $30 billion to small businesses annually, Gaston said. It takes businesses to the next level, is appropriately structured and enables them to be successful.

    Additional reporting by Business News Daily contributor Elizabeth Palermo.

    With an Associate s Degree in Business Management and nearly twenty years in senior management positions, Marci brings a real life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Business News Daily in 2015.

    You May Also like

    What is the SBA Microloan Program?

  • Writing a Business Plan: Tips from the SBA





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    Current SBA Loan Rates

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    For many small-business borrowers, government-backed loans are the holy grail. SBA loan interest rates are some of the most competitive among lenders.

    So keeping up on the Small Business Administration’s terms and rates is part of a smart approach to finding a business loan. The 7(a) loan is the SBA’s most popular product and offers a flexible sum of cash for a variety of uses, including managing daily operations, purchasing new products and refinancing high-interest loans. Business borrowers also find low-cost financing for land and other major purchases with SBA 504 loans.

    The SBA sets interest rate guidelines for lenders, which helps keep small-business owners borrowing costs low.

    Here’s a breakdown of SBA business loan terms and rates, including interest and fees.

    SBA loan rates

    SBA 7(A) LOAN TERMS:

    • 7(a) loans do not have a minimum loan amount and max out at $5 million. The average SBA loan was around $374,000 in 2015.
    • The SBA guarantees 85% of your loan if it’s less than $150,000 and 75% if it’s more than $150,000. However, it limits guarantees to $3.75 million.
    • SBA loans aren’t easy to qualify for. Read up on the qualifications for SBA loans to make sure they’re right for you.

    SBA 7(A) INTEREST RATES:

    7(A) LOANS REPAID IN LESS THAN 7 YEARS

    *The prime rate, hiked on Dec. 17, 2015, is 3.5%.

    Example: The maximum interest rate for an SBA loan of $25,000 or less, paid in less than seven years, is 7.75%.

    But interest rates make up only part of your expenses. Your APR reflects your true cost of borrowing, including your interest rate and all fees associated with the loan.

    How SBA loan rates are set. Interest rates for SBA 7(a) loans are the daily prime rate, which changes based on actions taken by the Federal Reserve, plus a lender spread. The spread is negotiated between the borrower and the lender, and can result in either fixed or variable interest rates. However, the SBA caps the maximum spread lenders can charge based on the size and maturity of the loan.

    A lender providing an SBA loan may also calculate interest rates using the one-month London Interbank Offered Rate plus 3% or the SBA’s optional peg rate instead of the daily prime rate.

    GUARANTY FEES

    7(a) loan guaranty fees are based on the loan amount and maturity date and apply only to the guaranteed portion of the loan. Lenders are required to pay the SBA the guaranty fee, but some pass the expense on to you. However, the SBA limits the maximum amount you will be charged.

    You ll pay no guaranty fee if your loan is less than $150,000. If it s more than $150,000 and matures in less than a year, you’ll see a 0.25% guaranty fee.

    If your loan is for more than $150,000 and takes more than a year to mature, you’ll be charged based on a three-tier system:

    • 3% on loans of between $150,000 and $700,000
    • 3.5% on loans of between $701,000 and $1 million
    • 3.75% on loans of more than $1 million

    CDC/504 loans

    Business borrowers looking to buy land, buildings or major equipment with long-term, fixed-rate financing can apply for SBA 504 loans. These loans are partially funded by certified development companies, nonprofit organizations focused on community economic development. The loans require collateral, typically the assets that are being financed, as well as personal guarantees from the principal borrowers.

    504/CDC SBA LOAN TERMS

    • 504 loans are available in 10- or 20-year terms: As of March 2016, 10-year term loans had an effective interest rate of 4.33% and 20-year term loans had an effective interest rate of 4.55%.
    • Fee percentages are fixed but reset every five years based on principal, often resulting in a lower payment for the borrower.
    • The minimum loan amount is $50,000; the maximum is $5.5 million.

    How 504 loan rates are set: Small-business owners seeking a 504 loan are on the hook for a down payment of at least 10% of the cost of the project. A traditional lender, such as a bank, puts up 50% of the loan, and a certified development company puts up as much as 40%. The SBA guarantees 100% of the CDC portion of the loan.

    SBA 504 loan terms are primarily made up of the following:

    • The Treasury bond rate: Loans with 10-year terms are priced based on the five-year Treasury bond, while loans with 20-year terms are based on the 10-year Treasury bond.
    • A guaranty fee that is paid to the SBA.
    • A servicing fee that is paid to the CDC.
    • A fee paid to the central servicing agent.

    When applying, you ll be quoted an effective interest rate, which is the sum of those three fees and the Treasury bond rate. However, you ll also pay a one-time fee of 2.15% to the SBA, as well as some additional fees, meaning your total cost of borrowing (or annual percentage rate) will be slightly higher than your effective rate.

    The bottom line on SBA loan rates

    SBA loans give you the best interest rates, though the application process can be complicated and time-consuming. If you find yourself in need of money fast, numerous online lenders can help you get the capital you need. However, they have less favorable APRs.

    Find and compare small-business loans

    If SBA loans aren t the right fit, compare other small-business loans to meet your needs and goals using our tool. We gauged lender trustworthiness, market scope and user experience, among other factors, and filtered lenders by categories that include your revenue and how long you’ve been in business.

    To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

    This post has been updated. It was originally published Jan. 8, 2016.

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