Louisiana District Office

AGENDA SBA’s Mission and Purpose Programs of Assistance

 Aid  Counsel  Assist  Protect the interests of small business concerns  Support  Champion small businesses SBA's Mission and Purpose

We help people get into business, stay in business, grow and prosper. Simply put………………

Programs Of Assistance  Financial Assistance Programs  Non- Financial Assistance

Non-Financial Assistance Programs uGovernment Contracting Assistance ($220B Market Place) Prime Contracts Subcontracting Assistance Certificate of Competency (COC) Size Determination uSurety Bond Program uProcurement Network (DSBS), SUB-Net, and Tech-Net uSmall Business Innovation Research Program (SBIR) uHubzone Empowerment Contracting uBusiness Information Centers (BICs) uSmall Business Development Centers (SBDCs) uService Corps of Retired Executives (SCORE) uSmall Disadvantaged Business Certification (SDB) uSection 8(a) Business Development Program uSection 7(j) Management and Technical Assistance uBusinessLaw.gov uSBA Small Business Classroom

Surety Bond Program SBA guarantees bid, performance; payment and ancillary bonds up to $2 million issued by surety companies for construction, service and supply contracts, and reimburses the sureties up to 90% of the losses sustained if the contractor defaults.

Small Disadvantaged Business (SDB) To qualify as SDB, a firm must be majority owned and controlled by one or more individuals who are socially and economically disadvantaged. SBA is the Federal agency designated to certify eligible firms as SDB.

HubZone Empowerment Contracting SBA encourages economic development through the establishment of preferences for award of federal contracts to small businesses located in designated HubZone areas. This fiscal year, the goal for Federal buying agencies is 3% of its procurement dollars.

Eligibility Requirements Business located in HubZone 35% of employees reside in HubZone 51% Unconditionally owned by U.S. Citizens

Section 8(a) Business Development Program A business development program whereby SBA has the power to obtain Federal Government contracts, and SBA, in turn, subcontracts these contracts to eligible Section 8(a) certified businesses.

Section 8(a) Program General Eligibility criteria: small business 51% owned, controlled and daily managed by socially and economically disadvantaged individuals. In business for at least 2 years (or obtain waiver) Must demonstrate requisite management and technical capability Non-minority women may be eligible

Section 8(a) Program SBA assists these firms in the growth and development of their businesses, and helps them in gaining equal access, improving their ability to compete on an equal basis in the mainstream of the American economy Currently 150 firms in Louisiana Participation in the program is for a maximum of 9 years.

ACCESS TO CAPITAL

ATTENTION!! SBA DOES NOT offer grants to start or expand small businesses, although SBA does offer a wide variety of loan programs for these purposes.

A business concern that is independently owned and operated and is not dominant in its’ field of operation, and together with its’ affiliated or subsidiary companies (if any) it does not exceed a specific size standard for its’ business industry. A business concern that is independently owned and operated and is not dominant in its’ field of operation, and together with its’ affiliated or subsidiary companies (if any) it does not exceed a specific size standard for its’ business industry. Definition of a Small Business

EXAMPLES Size Standards (in number of employees *NAICS Code Description or millions of dollars) Forest Nurseries and Gathering $ 5.0 Forest Products Commercial and Industrial$31.0 Bldg. Construction All Other Heavy Construction$ Electrical Contractors$ Carpentry Contractors$ Sheet Metal Work Manufacturing Machine Shops Electronic Computer Manufacturing1, Interior Design Services $ Engineering Services $ Architectural Services $ Computer Systems Design Services$23.0 *North American Industry Classification System

Financial Assistance Programs 7(a) Loan Program  SBA Express  Caplines Export Working Capital Program (EWCP) International Trade Loans Small Business Investment Company (SBIC) Program Angel Capital Electronic Network (Ace-Net) Microloan Program Disaster Assistance Program 504 Loans

7(a) Guaranty Loan Program u Generally, SBA may guarantee up to $3.75 million of a loan made to a small business by a bank or non-bank lender. u The guaranty rate is 85% on loans of $150,000 or less, and 75% on loans greater than $150,000. u The guarantee SBA provides encourages the lender to make more loans to small businesses.

Use Of Loan Proceeds l Start-up l Expansion l Working Capital l Inventory l Machinery/Equipment l Furniture/Fixtures l Purchase/Construct building l Business buyout l Leasehold improvements l Debt restructure

Terms and Interest Rates  Terms and Interest Rates are negotiated between borrower and lender; however, SBA places a cap on the interest rate a lender can charge.  Typically, longer terms are given to re-pay SBA guaranteed loans.  w/c – 7yrs; equip – up to 10yrs  R.E. – 25 yrs.

Fees vSBA charges the lender a nominal fee for SBA to provide the guaranty. vOrigination fee allowed – no vPackaging fee allowed – yes

SBA Express Loan Program  Faster, Easier, More Efficient  Maximum of $350,000  Interest Rates -- fixed or variable, tied to prime.  Maturity may go up to 7 years with possible extension. SBA provides a 50% guarantee  Lender uses own forms

PATRIOT EXPRESS PROGRAM Maximum Loan Amount of $500,000 Loans below $150,000 are guaranteed at 85% Interest rates range from % over prime depending upon the size and maturity of the loan.

PATRIOT EXPRESS CONT. Eligible military community members include: Veterans Service-disable Veterans Active-duty service members Reservists and National Guard members Current spouse of any of the above Widowed spouse of a service member of veteran who died during service

SMALL LOAN ADVANTAGE To encourage larger lenders to make lower $ loans Maximum: $250,000 Guarantee: $150k = 75% Approval time: 5 – 10 days Paperwork: streamlined; 2 pg application for borrower

SMALL LOAN ADVANTAGE Lender requirements: Preferred Lenders (PLP). SBA Form 2301 Parts A, B and C.

SBA 504 LOAN PROGRAM Fixed asset financing 50/40/10 split Certified Development Company (CDC) does packaging Bank in first lien position 10 yrs, equip.; 20 years, R.E. CDC funds come from bond sale

Microloan Program The MicroLoan Program provides small loans ranging from $100 to $50,000. Under this program, the SBA makes funds available to nonprofit intermediaries; these, in turn, make the loans. The average loan size is $10,000. Completed applications usually are processed by the intermediary in less than one week. If the borrower secures financing from another source, the loan limit is $105,000.

SBA Louisiana District Office Small Business: Backbone of the Louisiana Economy according to a report by the SBA’s Office of Advocacy, small businesses clearly play a crucial role in our state’s economy. Not only do small businesses play a vital role as job creators, but their diversity and composition provide the work force with endless opportunities.

What do these corporations have in common with hundreds of thousands of other businesses?

They have all been helped by the U.S. Small Business Administration!

Louisiana District Office One Canal Place 365 Canal Street, Suite 2820 New Orleans, LA Telephone: (504) Fax: (504) Reginald G. Harley – Vallery Brumfield –

Call the SBA Answer Desk U-ASK-SBA ( ) Louisiana District Office (504) Please visit our Louisiana SBA Web Site -

“Supporting the Formation, Growth, Prosperity, and Viability of Louisiana’s small businesses.” Louisiana District Office Thank you!!