U.S. Small Business Administration Created in 1953 during President Eisenhower’s Administration Provide the Public with: Mentoring Government Procurement Access to Capital Facilitate economic development Small Business Resource Guide

Counseling Small Business Development Center (SBDC) SCORE Partnership between SBA and other stakeholders 11 Centers throughout Indiana Under Indiana Office of Small Business and Entrepreneurship (OSBE) SCORE Nationwide network of business volunteers 10 Branches throughout Indiana

Counseling Women’s Business Center (WBC) Not exclusively women owned businesses Two WBCs in Indiana Procurement Technical Assistance Center Help small businesses pursue Federal contracts 5 locations throughout Indiana

Counseling Veteran Business Outreach Center (VBOC) Counseling, technical assistance and networking for military veteran entrepreneurs Regional Center located in Flint Michigan

Government Contracting $500 Billion Spent Annually 23% Goals For Small Business ($115B) 3 % Goal for SDVOSB Register with System for Award Management SAM.gov Veterans register at Vetbiz.gov

SBA’s role is primarily a guarantor of business loans Access to Capital SBA’s role is primarily a guarantor of business loans SBA partners with financial institutions Banks Credit Unions Certified Development Companies (CDC) Micro-lenders Small Business Investment Companies Surety Bond Providers

Eligibility of Business For-Profit business located in the U.S. Must qualify as “Small” per New Size Standard Tangible Net Worth of Applicant Not more than $15,000,000 And Average Net Income of Applicant Not more than $5,000,000 for the 2 full fiscal years before the date of application

Eligibility of Borrower U.S. Citizen, Lawful Permanent Residents, or Non-immigrant (documented) aliens Good Character Criminal Record Personal Credit Previous Federal Loan Payment History

Ineligible Loan Types / Uses Limited Membership Private Clubs Purchase Partial Ownership Repay Owners for their Investment Pay Delinquent Taxes/Refinance Loan Loan Packagers/Lenders Passive Income Speculative Ventures Pyramid Structures Illegal Activities Political Activities Religious Activities Gambling Activities Sexually-oriented Business

Criteria Evaluated Ability to repay the loan on time from the projected operating cash flow Feasible business plan Management expertise and commitment necessary for success Sufficient funds to operate the business on a sound financial basis Adequate equity invested in the business (no 100% financing) Sufficient collateral including personal guarantees

Where to Apply for an SBA Loan SBA guaranteed loans are made by business lenders at financial institutions Resource Partners can provide Assistance in understanding lending options available SBA lending statistics No direct loans from the SBA Lenders have the forms necessary

Advantages of SBA Loans Cannot qualify for conventional financing on reasonable terms Longer Maturities Lowers Monthly Payment Improves Cash Flow No Balloon payments on 7(a) loans No Prepayment Penalties on most 7(a) loans

Getting Started Step 1: Discuss Your Need Free Counseling Available from: Small Business Development Center (SBDC) SCORE Women's Business Center (WBC) Veterans Business Outreach Center (VBOC)

Getting Started Step 2: Assemble transaction specific documents Business Plan Purchase agreement/business appraisal Real estate estimate/appraisal Equipment invoice/appraisal Market research Environmental contamination research

Three SBA Lending Tools Micro-Loan Program 504 Loan Program 7 (a) Loan Program

SBA Microloan Program Loan Size: $5,000 ~ $50,000 Maximum Loan Term: 6 years Maximum Interest Rates: set by Microlender Program includes management & technical assistance

SBA 504 Loan Program Loan Size: $250,000 ~ $5,000,000 Maximum Loan Term: 10, 20 or 25 years Utilized for Financing Fixed Assets Includes 3rd Party Financing Borrower has 2 loans; one thru a Bank, the other thru a Certified Development Company (CDC) CDC loan has a fixed interest rate

7(a) Loan Guaranty Program Most used SBA Loan Program Wide range of financing needs Funding for start-up businesses Purchase existing business Expand/renovate facilities Finance working capital/receivables Construction Refinancing*

7(a) Loan Guaranty Program Maximum Loan Amount: $5.00 Million Maximum Guaranty Amount: $3.75 Million Maximum Guaranty Percentage: 85% up to $150,000 75% over $150,000 Multiple loans permitted up to $3.75 Million Guaranty Maximum No Minimum Loan Amount

7(a) Loan Guaranty Program Veterans Advantage Maximum Loan Amount: $350,000 Maximum Guaranty Amount: $175,000 Maximum Guaranty Percentage: 50% up to $350,000 Multiple loans permitted up to $350,000 Guaranty Maximum Delegated Lender Program ~ Expedited Process

Key Points to SBA Programs Borrower equity injection is required (100 % Financing is not available) All Borrowers with a 20% or more Ownership must give Personal Guaranty Personal assets may be required to cover collateral shortfall Loan is with the Lender; not the SBA SBA Guaranty is for the Lender Borrower still liable for 100% of the loan