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Posts Tagged ‘SBA’

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Two Small Business Technology Programs Get Extended

January 10th, 2012 ::

By Karen Axelton

The National Defense Authorization Act recently signed into law by President Obama has gained notoriety for expanding the scope of the federal government’s authority against terror suspects. Drawing less attention, but perhaps more interesting to small business owners, is that it also reauthorized the Small Business Innovation Research and Small Business Technology Transfer programs for six years, Policy Forum Blog reports.

The Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program, administered by the SBA’s Office of Technology,  aim to ensure that small, innovative high-tech businesses are involved in the federal government’s research and development efforts. Eleven federal departments participate in the SBIR program and five departments participate in the STTR program.

Both programs had been through temporary extensions for the past several years. In addition to a six-year reauthorization, the agreement, which was put forth by Rep. Sam Graves (R-MO), chair of the House Committee on Small Business, and Rep. Ralph Hall (R-TX), chair of the House Committee on Science, Space and Technology, also includes these key changes:

  • Greater participation by small businesses that have significant private capital support, increasing venture capital participation to 25 percent for the National Institute of Health, the Department of Energy and the National Science Foundation, and 15 percent for other participating federal agencies;
  • Increased award levels for both Phase I and Phase II. The award guidelines for SBIR and STTR will go from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II; these are the first increases since 1982.
  • Increasing the SBIR program allocation from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent. This will enable more small businesses to compete for R&D funds.
  • Standardizing parts of the application process across federal agencies to simplify the process for small businesses;
  • Demanding better coordination between the SBA and participating agencies to guard against waste, fraud and abuse in both the SBIR and STTR programs;
  • Requiring most agencies to review applications within 90 days, so that small businesses have a better idea of when they can expect a decision to be made;
  • Setting forth performance-based standards that will encourage businesses to focus on commercialization.

“Because of this deal, businesses will have peace of mind for the next six years,” said Senator Mary Landrieu (D-LA), chair of the Senate Small Business and Entrepreneurship Committee. “The nation’s innovators will have more access to federal research dollars, and the process by which they get the funding will be more efficient because we cut down the time for final decisions and disbursements.”

Image by Flickr user Francisco Diez (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business, small business, Technology | 1 Comment »

Nominate a Small Business Owner for SBA’s Small Business Person of the Year

November 8th, 2011 ::

By Maria Valdez Haubrich

Did you participate in National Small Business Week this past year? The Small Business Administration hosts Small Business Week every spring; this past year’s was one of the most successful ever. But the SBA is already getting ready for the 2012 National Small Business Week, which will be held May 20-26, 2012 in Washington, DC.  (Click here to get the details about the event.)

As part of National Small Business Week, every year the SBA honors entrepreneurs from every U.S. state and the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands, as State Small Business Person of the Year. From those state winners, one National winner is chosen as National Small Business Person of the Year.

The SBA is looking to you to nominate candidates for these honors. Criteria for nominees are as follows:

  1. Staying power — a substantiated history as an established business.
  2. Growth in number of employees — a benchmark to judge the impact of the business on the job market.
  3. Increase in sales and/or unit volume — an indication of continued growth over the last three years.
  4. Current and past financial performance — financial reports substantiate an improved financial position of the business.
  5. Innovativeness of product or service offered — an illustration of the creativity and imagination of the nominee.
  6. Response to adversity — examples of problems faced in the nominee’s business and the methods used to solve them.
  7. Contributions to community-oriented projects — evidence of the use of his/her personal time and resources.
  8. If applicable, a description of the products exported and markets served.

After being nominated, nominees can benefit from these SBA Guidelines to help them put together a winning nomination package.

In addition to the Small Business Person/s of the Year, the SBA is also seeking nominations for the following categories:

·          Champion Awards honor individuals or organizations dedicated to supporting small businesses in a variety of categories.

·         Phoenix Awards for individuals (business owners, volunteers and public officials) whose efforts and contributions have enabled their businesses or communities to recover successfully from a disaster.

To find out more about nominations, as well as learn the full schedule, and about other events at next year’s National Small Business Week, visit the official National Small Business Week website. If you have questions about the nomination process, contact your local SBA District Office.

Image by Flickr user TexasGOPVote (Creative Commons)

 

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Posted in Events, Small Business, small business | 2 Comments »

New Financing Option for Small Businesses: SBIC Impact Investment Initiative Launches

August 18th, 2011 ::

By Karen Axelton

Small businesses seeking capital in Michigan have a new source of options thanks to the Small Business Administration. The SBA last month announced that InvestMichigan! Mezzanine Fund will be the first licensed Impact Investment Fund in the SBA’s new Impact Investment Initiative. The $130 million venture capital fund will provide capital to businesses that are headquartered in Michigan, have a significant presence in Michigan or are in the process of expanding their operations in Michigan so they can grow and create jobs.

The InvestMichigan! fund is the first stage in a $1 billion commitment over five years through the SBA’s Impact Investment funds, part of the Obama administration’s Startup America initiative announced in January. Karen Mills, SBA Administrator, said Michigan was chosen as the launch state because of its economic struggles as well as opportunities.

Startup America is a White House initiative to bring together public and private organizations to help entrepreneurs. It will use the infrastructure of the SBA’s Small Business Investment Company Program (SBIC), which supplements private equity capital and long-term loan funds to help small businesses expand. In FY 2010, according to SBA data, the SBIC program provided $1.59 billion of financing to nearly 900 U.S. small businesses.

The Impact Investment Initiative is expected to put up to $1.5 billion into the hands of small businesses over the next five years. It will combine public and private funding for high-growth companies that generate not only a financial but also a “social” return. The program will focus on businesses in underserved markets or in sectors that have been defined as national priorities. Impact investments can be:

  • Place-based, targeting small businesses located in or employing residents of low or moderate income areas or economically distressed areas; or
  • Sector-based, targeting industry sectors that the Administration has identified as national priorities. (Currently only clean energy and education have been identified as priority sectors.)

The SBA will collaborate with private, institutional investors to identify impact investments and provide licensing and capital to fund managers who qualify to organize and operate an Impact Investment SBIC.

For more information on the Impact Investment Initiative, visit the SBA website.

Image by Flickr user TexasGOPVote (Creative Commons)

 

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Posted in Capital Access, Raising Capital, Small Business, small business, Venture Capital | No Comments »

Does Declaring Bankruptcy Really Give a Business a Fresh Start? Yes…and No

May 3rd, 2011 ::

By Maria Valdez Haubrich

What effects does a prior bankruptcy filing have on a small business’s chances of recovering and thriving once again? A new study recently released by the Small Business Administration’s Office of Advocacy has some surprising news about the longer-term effects of business bankruptcy.

First, the good news: Small businesses that have filed for bankruptcy in the past aren’t any more burdened than other small companies by cash flow problems, excessive taxes or high health insurance costs; they also end up growing to similar sizes as the average firm, the study found.

Now, the bad news: Companies that previously declared bankruptcies have approximately a 24 percent higher chance of being denied a business loan. When they do obtain loans, they are charged interest rates at least 1 percent higher than the average company.

And the really bad news: Companies owned by African Americans or and Hispanic Americans were even more likely to have their loan applications denied and to be charged higher interest rates when they did get loans.

“Small businesses filing for bankruptcy have an opportunity for a new start,” said Chief Counsel for Advocacy Winslow Sargeant in announcing the study. “[But when] this new start is hampered by the challenges of obtaining new loans, this can impede innovation and job creation.”

The study, Beyond Bankruptcy: Does the Bankruptcy Code Provide A Fresh Start to Entrepreneurs? by Aparna Mathur, found that owners of 2.6 percent of firms had filed for bankruptcy at some point in the previous seven years. (The study used data from the Federal Reserve Board’s Survey of Small Business Finances.)

The businesses’ ability to survive after filing bankruptcy was positive, Mathur noted in the study. However, “a bankruptcy on a firm’s credit record negatively affects a firm’s ability to obtain loans, especially at reasonable interest rates, even controlling for credit scores,” Mathur noted. What’s more, bankruptcy affected all types of credit—including trade credit, which is more crucial than loans to many small businesses.

“While the bankruptcy code does help certain businesses get back on their feet,” Mathur concludes, “the persistence of credit access issues after bankruptcy suggests that the promise of the ‘fresh start’ has not been fully realized.”

The full report is available on the Office of Advocacy’s website.

Image by Flickr user Nicholas Copernicus (Creative Commons)

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Posted in Business Law, Compliance, Small Business | 2 Comments »

Small Biz Resource Tip: SBA Loans

April 28th, 2011 ::

SBA Loans

As part of the newly redesigned Small Business Administration website, the SBA has created a Lender Toolkit to help small business lenders connect better with small businesses and to provide more information for banks on how to be designated an SBA lender. This only means more opportunity for small businesses to get loans needed to start and grow their businesses. As a small business, you’ll find a list of the types of SBA loans available; a loan application checklist; and information on credit scores, determining your financing needs and workshops you can attend to get more information.

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Posted in Capital Access, Raising Capital, Resources, Small Business | 1 Comment »

SBA Seeks Small Business Owners’ Comments on Regulations

March 29th, 2011 ::

By Maria Valdez Haubrich

One of the most frustrating aspects of owning a small business is dealing with government regulations. If you feel like you’re overburdened with pointless regulations, the Small Business Administration (SBA) wants to hear from you.

Specifically, the SBA is asking the public to comment on SBA regulations and the best ways to improve them, simplify them or get rid of them.

“The primary objectives of this review are to make SBA’s regulatory program more cost-effective and less burdensome on participants in the agency’s programs while continuing to promote economic growth, innovation and job creation,” the SBA stated in a notice published in the Federal Register in early March. “SBA seeks public input on the design of a plan to use for periodic retrospective review of its regulations and an initial list of the rules to be reviewed under the plan.”

In January, President Obama issued an executive order for a government-wide review of federal regulations. Those that were found to be burdensome or outdated, the order stated, could be eliminated if they were found to be thwarting private sector job growth.

Agencies were told to develop a plan for reviewing their regulations by mid-May, at which time the plan will be made public.

The SBA said its review will focus on small business investment companies, surety bond guarantees, business loans, disaster loans, government contracting and Historically Underutilized Business Zones. The agency is currently examining its size regulations, and just finished a review of the 8(a) Business Development Program, so neither of these issues is up for comment.

What kinds of comments is the SBA looking for? The agency wants to know if a particular regulation imposes an economic burden on small business; if the rule is duplicative or overlapping; whether paperwork could be reduced by allowing electronic submissions; whether there is scientific data to discredit the regulation; or whether the issue could be handled by trade organizations without federal involvement.

“Comments should focus on regulations that have demonstrated deficiencies,” the notice said. “Comments that rehash debates over recently issued rules will be less useful. The public should focus on rule changes that will achieve a broad public impact, rather than an individual, personal, or corporate benefit.”

Submit your comments by April 13 either electronically at regulations.gov, or by mail to the SBA Office of the General Counsel, 409 Third Street SW., Washington, D.C., 20416. Once the SBA completes its review plan, you’ll be able to view it on the SBA website.

Image by Flickr user vgm8383 (Creative Commons)

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Posted in Business Law, Compliance, small business | 4 Comments »

New Grant Program to Support Small Business Exporting

March 18th, 2011 ::

By Rieva Lesonsky

President Obama’s National Export Initiative has long supported increased exporting by small companies. Now the federal government, via the Small Business Administration, is taking additional steps to ease the process by providing grants to states to support their efforts to help entrepreneurs export.

The State Trade and Export Promotion (STEP) pilot program, which launched March 1, will give states as much as $90 million in grants over the next three years.

STEP was established by the Small Business Jobs Act of 2010, and all 50 states, the District of Columbia and U.S. territories can apply for grants. How much each state receives will depend on the state’s budget and proposal for increasing small business exporting.

“The global market offers countless opportunities for small business owners who are well positioned to grow their volume and customer base beyond our borders, and in doing so, create good-paying jobs in their local communities,” SBA Administrator Karen Mills said in announcing the program. “These grants, through the partnerships they will create at the state level, will strengthen the support available to help small business take that first step to begin exporting, and for those who are already exporting, grow into additional markets.”

Some of the types of activities the grants will support include:

• Helping small businesses take part in foreign trade missions

• Sales trips to overseas markets

• Designing marketing materials or creating marketing campaigns for international marketing

• Trade show exhibits focused on exporting efforts

• Training workshops or export initiatives that are in line with the goals of the pilot grant initiative.

The STEP pilot grant application period continues through April 26. Awards for the first year of the grant program will be issued in summer of 2011. Of course, as a small business owner, you can’t apply, but you can get more information at www.sba.gov/STEP and then keep tabs on local news to find out whether your state is getting involved.

Image by Flickr user Andreas Andelmann (Creative Commons)

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Posted in Capital Access, Raising Capital, Small Business | 4 Comments »

Small Businesses Get Tax, Financing Help from Federal Government

February 16th, 2011 ::

By Rieva Lesonsky

A new session of Congress is in full swing, and as spring approaches, several programs that will help small businesses with financial issues are beginning to sprout. Here’s a rundown:

New SBA Loan Programs to Launch: The SBA will launch a new loan program, called Community Advantage, this spring, the Los Angeles Times reports. The program targets underserved markets, including companies under 2 years old, those in low- to moderate-income communities and veteran-owned small businesses. The SBA will guarantee up to 85 percent of the loans, with maximum loans of $250,000. The loans will be made by nonprofit lenders that currently are not allowed to make SBA-guaranteed loans.

The new Small Loan Advantage program will also launch this spring, with the same loan limits and guarantees. The difference is that these loans will be made by larger, existing SBA lenders, and have fewer restrictions on who can receive the loans than Community Advantage does.

The SBA is hoping the higher guarantees in both programs will attract more lenders and convince them to make more loans.

Small Business Lending Fund Gets Ready to Roll: The Small Business Lending Fund has been a long time in the making, but the investments are set to begin this quarter, reports BusinessWeek. The program provides capital to community banks, and the more loans they make to small businesses, the lower their interest rate on the money (as low as 1 percent in some cases). Essentially, it’s a way for banks to refinance TARP capital at lower rates.

The program was part of the Small Business Jobs Act signed by President Obama in September, and the Treasury Department started accepting applications from banks in December. Program director Jason Tepperman told BusinessWeek he was “pleasantly surprised” by the number of banks that applied. Banks can apply through the end of March.

President Urges Business Tax Credits: When he submits his budget President Obama will ask Congress to permanently eliminate capital gains taxes on some types of investments in small businesses, says MarketWatch. The provision, which Congress has to approve, is part of the small business jobs act the President signed in September, but which expires at the end of 2011. The President is also expected to propose expansion of the New Markets Tax Credit, a credit that encourages investment in startups and small companies in low-income areas.

Image by Flickr user Andy Withers (Creative Commons)

DISCLAIMER: The information posted in this blog is provided for informational purposes. Legal information is not the same as legal advice — the application of law to an individual’s specific circumstances. The information presented here is not to be construed as legal or tax advice. Network Solutions recommends that you consult an attorney or tax consultant if you want professional assurance that the information posted, and your interpretation of it, is appropriate to your particular business.

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Posted in Capital Access, small business | 1 Comment »

Good News for Small Business: SBA Loan Numbers, Limits Rise

October 21st, 2010 ::

By Rieva Lesonsky

The Small Business Administration (SBA), whose fiscal year ended September 30, reports some surprising news: Despite a tough economy, the number of SBA loans rose by some 30 percent in 2010.

The SBA approved $16.84 billion in loans (54,826 loans) in the past 12 months—an increase from $13.03 billion in fiscal 2009. (By comparison, in 2007, before the recession hit, the SBA approved $20.61 billion in loans.)

The stimulus enacted in February 2009 is responsible for much of the growth. It eliminated fees and increased the maximum loan guarantee from 75-85 percent to 90 percent. Between February 2009 and May 2010, the average weekly dollar volume was $330 million—much larger than the $172 million weekly average for the seven weeks before the stimulus, The Wall Street Journal reported.

The increase in lending is especially impressive in light of the obstacles borrowers faced. During fiscal 2010, the stimulus provisions had to be extended four times by congressional vote. This led to lengthy delays where borrowers who hadn’t received approval had to get into a “queue” and wait until Congress approved the stimulus extension. The longest wait took place this summer; the provisions expired in May and weren’t extended until the Small Business Jobs Act was signed September 27. Within one week of that signing, the SBA reported that $970 million in loans or 1,939 loans that had been sitting in the queue had been cleared.

As part of the Small Business Jobs Act, effective October 8, the SBA also officially increased the cap on various types of loans:

  • The cap on SBA Express loans temporarily increased from $350,000 to $1 million.
  • The cap on 7(a) and 504 limits permanently increased from $2 million to $5 million; for manufacturers and certain energy-related projects seeking 504 loans, the cap is now $5.5 million.
  • The cap on International Trade and Export Working Capital loans has been permanently increased from $2 million to $5 million.
  • The cap on microloans has been permanently increased from $35,000 to $50,000.
  • The cap on Export Express loans has been permanently increased from $250,000 to $500,000.

These measures should make it easier for small businesses to get the loans they need—at least, until the stimulus provisions expire again at the end of calendar year 2010.

Image by Flickr user Kevin Dooley (Creative Commons)

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Posted in Capital Access | 2 Comments »

Getting the Lowdown on ARC Loans – Bailout for Small Business

June 12th, 2009 ::

About two months ago, I wrote about the Congress pushing the SBA to jump start loans again and President Obama allocated $15 billion of the initial TARP money ($700 billion) and it was dubbed the “Business Stabilization Loan Program”. The bill was passed and now we can report to you that it is ready for action.

It is now called the “America’s Recovery Capital (ARC) Loan Program” and the guidelines were released today. Entrepreneur magazine reported “”We are on target to issue the guidance and begin training, and have been reaching out to lenders regarding some of the specifics of that guidance. Guidance and forms are now available through www.sba.gov,” says Eric Zarnikow, associate administrator for Capital Access, the SBA department overseeing the ARC loan program. He added that borrowers can begin applying for these loans beginning June 15 the SBA, will be able to provide about 10,000 ARC loans to small businesses across the country, through its lenders.”

So what are the criteria for getting an ARC loan?

According to the SBA and Entrepreneur.com, “ARC loans will be up to $35,000 and available to established, viable, for-profit small businesses suffering “immediate financial hardship” in order to provide some temporary financial relief so they can keep their doors open and put their cash flow back on track. It is intended for businesses that need short-term help to make their principal and interest payments on existing qualifying debt (including conventional loans, credit card obligations, notes owed to suppliers and utilities).”

Another important element is that you must prove your ability to need it and the ability to repay it:

According to the SBA “businesses must provide three years of financial statements, cash flow projections based on reasonable growth over two years and demonstrated ability to meet current and future debt obligations, including future repayment of the ARC loan. Also, the borrower must certify that they are currently no more than 60 days past due on any loan paid with an ARC loan and they must have an acceptable business credit score as determined by SBA”

How do ARC loans work?
According to Entrepreneur.com “The loans are 100 percent guaranteed by the SBA and made by existing SBA 7(a) lenders. They have no SBA or lender fees associated with them (unless the lender must secure collateral as part of the loan). The disbursement period (up to six months) is followed by a 12- month deferral period with no repayment of principal. After the deferral period, the borrower pays back only the ARC loan principal over a five-year period. ARC loans are available through SBA-approved lenders as long as funding is available or through Sept. 30, 2010, whichever comes first, and cannot be used to make payments on another SBA-guaranteed loan, with the exceptions of loans made with an SBA guaranty after Feb. 17, 2009.”

One small downside – only 10,000 loans for 30 million businesses

Despite there being over 30 million small businesses in the U.S. and only 10,000 loans available, demand is expected to exceed supply. The SBA is limiting participation to 50 loans per week per lender and will accept a total of 1,000 loans per institution over the course of the program. It is understandable because it is not a handout and paperwork must be processed and track properly but only time shall tell if this is enough to get small businesses spending again at a large enough scale to break the cycle.

How could your small business benefit?

With the many billions of dollars being poured in to companies that the government says are “too big to fail”, this program recognizes that small businesses which are, according the Small Business Success Index, the core engine of innovation and job growth in the United States over the last 20 years, that they are just as important and for many small businesses, $35,000 could mean the difference in making it through some very tough times or closing their doors forever. When these small businesses can pay their bills usually to other small businesses, the “ship of capitalism” should start to right itself breaking a vicious cycle that occurs once an economic downturn starts to hit main street.

For more information about the program, visit www.sba.gov

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Posted in Capital Access, Raising Capital, small business | 7 Comments »

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