BZUPAGES.COM Nimra Irshad 06-27. BZUPAGES.COM ROLE OF THE SBA IN SMALL-BUSINESS FINANCING  The SBA offers numerous loan programs to assist small businesses.

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Presentation transcript:

BZUPAGES.COM Nimra Irshad 06-27

BZUPAGES.COM ROLE OF THE SBA IN SMALL-BUSINESS FINANCING  The SBA offers numerous loan programs to assist small businesses.  The SBA is a guarantor of loans made by private and other institutions.  The Basic 7(a) Loan Guarantor is the SBA’s primary business loan program.

BZUPAGES.COM  This program helps qualified small businesses obtain financing when they cannot obtain business loans through regular lending channels.  The proceeds from such a loan can be used for a variety of business purposes, such as working capital; machinery and equipment; furniture and fixtures; land and building.

BZUPAGES.COM  To get loan, entrepreneur must be eligible.  Eligibility factors for all 7(a) loans include size, type of business and the availability of funds from other sources.

BZUPAGES.COM RESEARCH AND DEVELOPMENT LIMITED PARTNERSHIPS  R&D limited partnerships are another possible source of funds for entrepreneurs in high- technology areas.  This method of financing provides funds from investors looking for tax shelters.  A typical R&D partnerships arrangements involves a sponsoring company developing the technology with funds being provided by a limited partnership of individual investors.

BZUPAGES.COM Major Elements  The three major components of any R&D limited partnership are the:  Contract  The sponsoring company  The limited partnership

BZUPAGES.COM Contract  The contract specifies the agreement between the sponsoring company and the limited partnership.  The sponsoring company does not guarantee results but rather performs the work on a best-effort basis.  There are some tax advantage for both the limited partnership and the sponsoring company.

BZUPAGES.COM Limited Partners  The limited partners have limited liability but are not a total taxable entity.  Any tax benefits of the losses in the early stages of the R&D limited partnership are passes directly to the limited partners.

BZUPAGES.COM The Sponsoring Company  The sponsoring company, acts as the general partner developing the technology.  The sponsoring company usually has the base technology but needs funds to future develop and modify it for commercial success.  It is the base technology that the company is offering to the partnership in exchange for money.

BZUPAGES.COM Procedure  An R&D limited partnership generally progresses through three stages:  The funding stage  The development stage  The exit stage

BZUPAGES.COM The Funding stage  In the funding stage, a contract is established between the sponsoring company and limited partners, and the money is invested for the proposed R&D effort.  All the terms and conditions of ownership, as well as the scope of the research are carefully documented.

BZUPAGES.COM The Development Stage  The sponsoring company performs the actual research, using the funds from the limited partners.

BZUPAGES.COM The Exit Stage A final exit arrangement is through a joint venture. The sponsoring company and the partners form a joint venture to manufacture and market the products developed from technology.

BZUPAGES.COM Examples There are numerous examples of successful R&D limited partnerships. Syntex Corporation raised $23.5 million in an R&D limited partnership to develop five medical diagnostic products. Trilogy Limited raised $55 million to develop a high performance computer.