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Posts Tagged ‘Karen Mills’

Grants for SBA Small Business Teaming Pilot Program

Posted by Hopeton on January 13, 2011

The U.S. Small Business Administration is accepting grant funding  proposals from eligible and well-established national organizations interested  in providing training, guidance, counseling, mentoring and procurement  assistance to small businesses in teaming arrangements, which may be in the form  of a joint venture or prime and subcontractor relationship, under its new Small Business Teaming Pilot program.

The Small Business Teaming Pilot program was established by Congress under the Small Business Jobs Act of 2010.  Under this new program, the SBA expects to make 10-to-20 grant awards in the range of $250,000-$500,000 totaling up to $5,000,000 for fiscal year 2011.

“The Small Business Jobs Act provides critical resources to help small businesses continue to drive economic recovery and create jobs,” said SBA Administrator Karen Mills.  “The teaming pilot program will help put contract dollars into the hands of small businesses, create job opportunities through the teaming arrangements, help drive innovation and promote economic growth for our nation’s economy.”

Karen Mills

To be eligible for these grant awards, an applicant must:

• be a private, non-profit or for-profit entity;

• have been in existence continually for the past three years;

• have experience dealing with issues relating to small business on a national  level; and

• demonstrate that it has the capacity to provide assistance to small businesses.

Applicant organizations selected for these awards must leverage the funding  received by the SBA by working in conjunction with SBA’s district offices and other federal, state, local and tribal government small business development programs, including: Procurement Technical Assistance Centers, SBA resource partners such as SCORE, Small Business Development Centers, Women’s Business  Centers, Veterans Business Outreach Centers, 7(j) technical assistance providers, universities, other institutions of higher education and private organizations such as chambers of commerce and trade and industry groups and associations.

All proposals must be submitted electronically via the government-wide financial assistance portal www.grants.gov no later than 11:59 p.m. on Feb. 25, 2011.  For more information about the Small Business Teaming Pilot Program, visit: www.sba.gov/teaming.



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SBA Growth Capital Program Provides Record Amount of Financing in FY 2010

Posted by Hopeton on October 28, 2010

At a time when capital was scarce for small business, financing from the U.S. Small Business Administration’s growth capital program increased 23 percent in fiscal year 2010, providing a record $1.59 billion to help small businesses grow and create jobs, according to SBA Administrator Karen Mills.

The fiscal year 2010 volume is the highest single-year volume in the 50-year history of SBA’s Small Business Investment Company (SBIC) debenture program. Increased volume in the program is in part a result of changes made by the American Recovery and Reinvestment Act of 2009. Those changes contributed to an increased number of new SBIC licenses, decreased license processing times, and initial capital to new funds rose dramatically.

“At a time when access to capital was tight, including from the traditional sources for growth capital, SBA helped fill some of that gap with a record amount of financing through our SBIC program,” Mills said. “Across the country, there are small business owners and entrepreneurs who are well-positioned to take that next step, grow their business and create good-paying jobs. Our efforts to strengthen our program efficiency and increase funding available through the SBIC program has provided another critical tool to help these small businesses get the capital they need and drive economic growth.”

Karen Mills

The SBIC program was created to stimulate the growth of America’s small businesses by supplementing the long-term debt and private-equity capital available to them. SBA’s SBIC fiscal year 2010 results included the following:

  • Record High Financing to Small Businesses: Total financings to the SBA SBIC debenture program grew to a 50-year record high of $1.59 billion in fiscal year 2010 – a 23 percent increase over an average $1.29 billion in the four previous years. Debenture program obligations grew to $1.17 billion from an average $750.6 million, another 50-year record high.
  • More Licensed SBICs and Faster Processing Times: Twenty-one (21) new SBIC licensees were issued in fiscal year 2010, a 130 percent increase over the four-year average of 10 per year. Additionally, SBIC license processing time improved to just 5.8 months in fiscal year 2010, a nearly 60 percent decrease from an average of 14.6 months in 2009.
  • Record High Capital Commitment to Support Small Businesses: SBA capital commitments to new funds broke yet another 50-year record increasing to $1.23 billion in fiscal year 2010, a 135 percent jump from an average of $524.3 million in the four previous years. Equally important, the programs attracted record levels of private capital commitments, increasing to $615 million in 2010 from $262.1 million in previous years – another 135 percent increase. Combined total initial capital to new funds increased to $1.845 billion in FY 2010 from an average $786.4 million.

SBICs are privately-owned and managed investment firms that are licensed and regulated by SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are more than 300 SBICs with more than $16 billion in capital under management.
Since the SBIC program’s formation in 1958 through April 2009, it has invested approximately $56 billion in more than 100,000 small businesses in the United States. For more information about the SBA’s Investment Division and SBIC program, go to www.sba.gov/INV or call 1-800-U ASK SBA.

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SBA Recovery Lending Extended Through May

Posted by Hopeton on April 16, 2010

President Barack Obama signed legislation yesterday providing $80 million in additional funding to continue important enhancements in the U.S. Small Business Administration’s two key small business loan programs.  The enhancements, first made available under the American Recovery and Reinvestment Act, include a higher guarantee on some SBA-backed loans and small business fee relief.

The SBA estimates the $80 million will support about $2.8 billion in small business lending under the 7(a) and 504 programs.

“Small businesses across the country have been able to secure critical financing as a result of the Recovery Act loan provisions and the continued interim funding we’ve received for the program,” said SBA Administrator Karen Mills.  “The increased guarantees and reduced fees on SBA loans have generated more than $25 billion in new loans to small business owners and brought more than 1,200 lenders back to SBA loan programs.  In fact, the first two quarters of the current fiscal year have been our best two opening quarters ever for the 7(a) program, with more than $7 billion in guaranteed loans.  These programs have been successful in helping jump-start our economy, which is why we will continue to work with Congress on a longer term extension of the increased guarantee and reduced fees.

Karen Mills

“We also know that small businesses could greatly benefit from the additional tools the President has proposed, including higher SBA loan limits and refinancing for commercial property mortgages, which could help thousands of small businesses avoid potential foreclosure.  Small businesses need these improvements to ensure their access to the capital they need to drive economic growth and create jobs in communities all across the country.”

As part of the Recovery Act enacted on Feb. 17, 2009, SBA received $730 million to help small businesses, including $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to reduce borrower fees on most 7(a) and 504 loans.  The funds for these programs were exhausted on Nov. 23, 2009, and an additional $125 million was provided in December.  Those funds were exhausted in late February, 2010, and an additional $60 million was provided subsequently.  SBA was authorized for an additional $40 million in late March.

Under the new extension SBA may continue to reduce loan fees in its 7(a) and 504 programs and to provide higher guarantee levels on 7(a) loans through May 2010, or until the funds provided under the bill are exhausted.

This extension has no effect on the continued availability of financing under other SBA Recovery Act programs, including SBA’s America’s Recovery Capital (ARC) loan program and the agency’s Microloan program. Recovery Act funding still remains available for both of those programs.

Posted in Small Business Loans | Tagged: , | 2 Comments »

SBA Creates Secondary Market Guaranty Program for 504 First Mortgage Loan Pools

Posted by Hopeton on November 10, 2009

Regulations published by the U.S. Small Business Administration will create a secondary market guarantee program to provide greater liquidity for lenders and expand access to capital for small businesses. Funded through the American Recovery and Reinvestment Act, the new program would encourage sales into the secondary market of the “first mortgage” portion of small business financing made possible through the SBA’s 504 Certified Development Company (CDC) program. As a result of the economic recession and the disruption in the credit markets, there has been a significant decline in secondary market activity for 504 first mortgage loans.

“This new program will stimulate activity in the secondary market, ensuring lenders have a place to sell first mortgage loans on their books and in turn have liquidity to make more loans to small businesses,” SBA Administrator Karen Mills said. “This is another tool in our Recovery toolbox that will expand access to the capital small businesses need to drive economic growth and create jobs.”

The 504 CDC program provides credit for the purchase of real estate and other fixed assets tied to a business’ expansion. Financing under the program includes three components: 1) a first mortgage or lien, which is made by a private commercial lender for 50 percent of the total project and does not come with a government guarantee, 2) a second mortgage or lien, which is made by a CDC for 40 percent of the total project and guaranteed fully by the SBA, and 3) borrower equity for the remaining 10 percent of the total project.

Under the new program, portions of eligible 504 first mortgages pooled by originators or broker dealers could be sold with an SBA guarantee to third-party investors in the secondary market. Lenders will retain at least 15 percent of each individual loan, pool originators will assume 5 percent of the risk, and the SBA will guarantee the remaining 80 percent. To be eligible to be included in a pool, the first mortgage must be associated with a 504 loan disbursed on or after Feb. 17, 2009. The program will be in place until Feb. 16, 2011, or until $3 billion in new pools are created, whichever occurs first.

SBA will begin accepting applications to become a pool originator from banks and broker dealers immediately, and expects to be operational for the settlement of pools in about 60 days.

For more information, lenders or broker/dealers can contact James W. Hammersley, Deputy Assistant Administrator for Policy and Strategic Planning at james.hammersley@sba.gov.

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Recovery Act Stimulates Increase in SBA Loans

Posted by Hopeton on October 28, 2009

Changes under the American Recovery and Reinvestment Act to U.S. Small Business Administration loan programs led to a rebound in SBA-backed loans for small businesses and greater access to much-needed capital.

Since the Recovery Act was signed on Feb. 17, SBA has supported more than $11.3 billion in lending to small businesses through its two largest loan programs and seen its average weekly dollar volume increase by more than 60 percent in comparison to the weeks before the Recovery Act.  Additionally, the average number of loans approved per week has increased by more than 50 percent. The dollar volume for September 2009 ($1.9 billion) was the highest single-month total since August 2007.

“These numbers, along with our conversations with lenders and small business owners around the country, show that the Recovery Act hit the mark,” SBA Administrator Karen Mills said. “The Recovery Act was critical to unlocking the market and as a result we’ve helped put billions of dollars of much needed capital in the hands of small business owners during this tough economic time, and brought more than 1,200 lenders back into SBA’s loan programs.  With half the nation’s workforce either working for or owning a small business, these dollars played a critical role in driving economic recovery across the country.”

Karen Mills

Karen Mills

As a result of the credit crunch, SBA lending saw a significant decline in the fall of 2008 and early 2009. For the seven weeks prior to the Recovery Act being signed, SBA’s average weekly dollar volume was $165 million.  The average weekly average since the Recovery Act was signed, through Sept. 25, was $275 million.  

Mills cited Recovery Act provisions that reduced fees on SBA loans and raised SBA guarantees to 90 percent, as well as actions that reinvigorated the secondary markets for SBA-guaranteed loans as especially helpful in improving access to SBA-backed credit. 

Overall, SBA loan approvals for the fiscal year amounted to a combined 50,829 loans (preliminary number) worth $13.1 billion under the 7(a) and 504 loan programs.  The comparable figures for fiscal year 2008, which ended just as the nation’s economy entered the financial crisis, were 78,317 and $17.96 billion.  

The dollar volume totals for SBA loans in fiscal year 2009, which ended Sept. 30, do not include loans made under the agency’s ARC, (America’s Recovery Capital) loan program.  Launched on June 15, the agency has approved 2,715 ARC loans worth more than $88 million as of September 29.  Thus far, nearly 740 lenders have made ARC loans, and the number of participating lenders is increasing by an average of about 50 per week.

For more information about these and other SBA programs, visit the SBA Web site at http://www.sba.gov, or contact your local SBA field office.  You can find contact information for your local SBA office at http://www.sba.gov/localresources/index.html .

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Increased Equity and Venture Capital Funding Available For Small Businesses through SBA

Posted by Hopeton on July 16, 2009

From the press office of the U.S. Small Business Administration

Small businesses that would otherwise have difficulty securing private equity or venture capital may find funding easier to get as a result of changes made as part of the American Recovery and Reinvestment Act to the U.S. Small Business Administration’s Small Business Investment Company program.

“The Recovery Act expands SBA’s venture capital program to increase the pool of investment funding available to the Small Business Investment Companies licensed by SBA,” said SBA Administrator Karen G. Mills. “We believe those companies will be better equipped by these changes to help sustain and grow small businesses for their next important growth steps.”

Karen Mills

Karen Mills

SBICs are privately owned and managed venture capital firms which are licensed and regulated by SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are approximately 338 SBICs with $17.4 billion in capital under management.

The changes made as part of the Recovery Act are:

  • The Recovery Act makes SBICs eligible for greater SBA guaranteed funding and requires SBICs to invest 25 percent of their investment dollars into “smaller” businesses. Also, the amount of funding an SBIC may invest in a single small business is set at 10 percent of an SBIC’s total capital rather than the previous limit of 20 percent of an SBIC’s private capital only. This translates to an effective 50 percent increase in funding available to a single business by an SBIC.
  • Maximum SBA funding levels to SBICs will increase up to three times the private capital raised by the SBIC, up to a maximum of $150 million for single SBICs, or up to $225 million for multiple SBICs that are under common control. The cap for all licensees was set at $137.1 million before the Recovery Act.
  • These limits are even higher for SBICs that are licensed after October 1, 2009, that certify that at least 50 percent of their investments will be made in small businesses located in low-income areas, up to $175 million for single licensees and up to $250 million for jointly controlled multiple licensees.
  • Changes made to the SBIC program under the Recovery Act are permanent.

Industry associations have commended SBA for these changes and SBA continues to encourage new SBICs to apply for licensing and actively participate in the program.

The SBIC program was created to stimulate the growth of America’s small businesses by supplementing the long-term debt and private-equity capital available to them. Since the SBIC program’s formation in 1958 through April 2009, it has invested approximately $56 billion in more than 106,000 small businesses in the United States. For more information about the SBA’s Investment Division and SBIC program, go to www.sba.gov/INV or call 1-800-U ASK SBA.

Posted in Finance, small business, Small Business Loans | Tagged: , , | Leave a Comment »

SBA Launches New Loan Program for Struggling Businesses

Posted by Hopeton on May 18, 2009

Provided by the SBA Press Office

Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through to a new loan program announced by SBA Administrator Karen G. Mills.

Karen Mills

Karen Mills

Beginning on June 15, SBA will start guaranteeing America’s Recovery Capital (ARC) loans.  ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt.  ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them.

“These ARC loans can provide the critical capital and support many small businesses need to make it through these tough economic times,” said Administrator Mills.  “Together with other provisions of the Recovery Act, ARC loans will free up capital and put more money in the hands of small business owners when they need it the most. This will help viable small businesses continue to grow and thrive and create new jobs in communities across the country.”

As part of the Recovery Act, the ARC program was created as a no-interest, deferred payment loan to help small businesses that have a history of good performance, but as a result of the tough economy, are struggling to make debt payments.

ARC loans will be disbursed within a period of up to six months and will provide funds to be used for payments of principal and interest for existing, qualifying small business debt including mortgages, term and revolving lines of credit, capital leases, credit card obligations and notes payable to vendors, suppliers and utilities.  Repayment will not begin until 12 months after the final disbursement.  Borrowers don’t have to pay interest on ARC loans.  After the 12-moth deferral period, borrowers will pay back the loan principal over a period of five years.

ARC loans will be made by commercial lenders, not SBA directly.  For more information on ARC loans, visit www.sba.gov.

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Obama Announces Choice to Lead SBA

Posted by Hopeton on December 24, 2008

With the swiftness of his announcement of Karen Wells as his choice to be the next Administrator of the U.S. Small Business Administration on December 19, President-elect Barack Obama has clearly indicated the importance of that position to his administration.  He has named his nominee to be the SBA Administrator much earlier than the Clinton and Bush Administrations did when first elected, who made their choices known in March 1993 and February 2001 respectively.

President-Elect Obama and Karen Mills

Preident-Elect Obama and Karen Mills

More important than the early selection of his nominee for SBA Administrator is who recommended Mills, Maine Senator Olympia Snowe, the former Chairman and current Ranking Member of the Senate Committee on Small Business and Entrepreneurship.  Snowe had sent a letter to Obama on December 8 asking that the Adminstrator position be re-elevated to Cabinet-level status.

In her press statement congratulating Mills for being nominated for the SBA position Snowe said, “…I hope President-elect Obama will carefully consider my proposal to re-elevate the SBA Administrator to Cabinet-level status — as under the Clinton administration — so that Karen can have the maximum impact on America’s 26 million small businesses, which create three quarters of net new jobs annually.”

So what experience will Wells bring to the table?   Equipped with an MBA from Harvard University, Wells has 25 years experience as a principal in the private equity and venture capital industry and has taken a leadership role in the growth of more than 20 companies in the consumer products, food, distribution, textile and industrial component sectors according to the press statement released by President Elect Obama.  A resident of Maine, she chairs the Governors Council on Competitiveness and the Economy.

Mills appointment was praised by Massachusetts Senator John  Kerry, Chairman of the Senate Committee on Small Business and Entrepreneurship.

“The President-elect’s selection to lead the SBA demonstrates his commitment to bring Washington in touch with the real needs of Main Street.  Karen has been a champion of small business,” said Kerry in a press statement.

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