2. 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

3. 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

4. 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

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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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)

15. 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

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

17. 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

18. 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

19. 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*

20. 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

21. 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

22. 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