Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Posts Tagged ‘SBA’

Learn About New SBA Initiatives April 1 in San Antonio

Posted by Hopeton on March 22, 2011

Meet with leaders from U.S. Small Business Administration, give input on new regulations, and learn how you can take advantage of new tools coming out of the Small Business Jobs Act on April 1, 9:00 a.m. – 4:15 p.m. in San Antonio at the Norris Conference Center. Hosted by the San Antonio District Office of the SBA, participants will learn more about getting an SBA loan, competing for federal contracts, finding training and counseling resources, and starting or increasing exports.  Here is an overview of each of these areas:

Putting More Capital in the Hands of Small Business Owners
SBA loans continue to be a critical tool for helping small businesses get the capital they need to grow and create jobs. The Small Business Jobs Act made permanent enhancements to SBA programs, such as raising the maximum size of our top two loan products (7(a) and 504) from $2 million to $5 million. In addition, temporary provisions in the new law include a Dealer Floor Plan financing pilot as well as a program that allows some owner-occupied businesses to refinance their commercial real estate mortgages using an SBA loan. Beyond the Jobs Act, SBA is taking several steps to better serve our lending partners and borrowers, to simplify and streamline loan programs, and to improve oversight of SBA lending.

Strengthening Small Businesses’ Ability to Compete for and Win Federal Contracts
The federal government awards hundreds of billions of dollars each year in federal contracts, nearly one-fourth of which goes to small firms. The Small Business Jobs Act contained 19 provisions that will help small businesses compete more effectively for federal contracts and subcontracts. The SBA is rolling out these provisions that will help ensure more fairness, more opportunities, and more tools to help match federal agencies with small businesses that provide high-quality products and services.

Expanding Resources for Counseling and Training
SBA has at least one District Office in each state, as well as about 14,000 affiliated counselors at Small Business Development Centers, Women’s Business Centers and SCORE mentoring chapters. The Small Business Jobs Act is helping support these groups in a number of ways. For example, $50 million more is being provided to support the network of about 900 Small Business Development Centers throughout the country. Also, SBA is working with a broad group of counselors to equip them with more tools and information to help small firms start or increase exporting. 

Expanding Exporting Opportunities for Small Business
Small businesses looking for new opportunities to increase sales and profit, and take advantage of increased demand for high-quality U.S. goods and services should consider exporting. The Small Business Jobs Act includes exporting resources to help small businesses by making the SBA Export Express pilot loan program permanent, increasing maximum sizes for SBA’s three export loan programs, and creating a new State Trade and Export Promotion (STEP) grants pilot program which will provide funds to states to assist small business interested in exporting. These expanded opportunities also help build upon President Obama’s goal of doubling exports in the next five years via the National Export Initiative.

To rsvp for this event click here.

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504 Loan Refinancing For Eligible Small Business Assets Under Jobs the Act

Posted by Hopeton on February 21, 2011

Market research shows that a large percentage of commercial mortgages outstanding are set to mature within the next few years, particularly those held by community banks.  As real estate values have declined, however, even small businesses that are performing well and making their payments on time can have a hard time refinancing these loans and may need to restructure their debt.

Under the Small Business Jobs Act, the SBA will implement a temporary program—authorized until Sept. 27, 2012—allowing small businesses to refinance eligible fixed assets in its 504 program without requirement of an expansion, as is the case with typical 504 loans. This program will provide small businesses the opportunity to lock in long-term, stable financing, as well as protect jobs.

Key Program Features

  • SBA will launch this temporary program on Feb. 17, 2011 and will begin accepting loan applications on Feb. 28, 2011.  The program will end on September 27, 2012.
  • Borrowers can finance up to 90 percent of the current appraised property value, or 100 percent of the outstanding principal, whichever is lower, plus 504 eligible refinancing costs.
  • SBA will initially open the program only to businesses with immediate need.  Priority will be on those businesses potentially at risk because they face loan maturity or balloon payments before Dec. 31, 2012.  SBA will later revisit the program parameters, and may open the program to businesses with later balloon payments or that can demonstrate need in other ways.
  • The program is structured like SBA’s traditional 504 loan program: borrowers will work with third-party lending institutions and SBA-approved Certified Development Companies (CDCs), typically private, non-profit organizations to obtain financing, in a traditional 10%/50%/40% split.
  • SBA estimates that as many as 20,000 businesses may ultimately participate in this program, which will provide up to $15 billion in SBA-guaranteed financing leading to total project financing of over $30 billion.
  • The program, which is completely separate from SBA’s traditional 504 program, is zero-subsidy, requiring no cost to the taxpayer: It will be funded entirely through additional fees assessed for refinancing projects.

Key Risk Mitigating Factors

  • Applicants must demonstrate that their loans are current and that they have successfully made all required payments in the last year.
  • A new, independent appraisal will be required for all projects.
  • SBA will perform full and thorough underwriting on all refinancing applications (i.e., there are no ‘delegated’ lenders).
  • Initially, the first mortgage loans on existing 504 projects are not eligible, and “cash out” refinancings are not permitted.  SBA may later revisit these restrictions.   In addition, no government guaranteed loan is eligible for this refinancing program.

SBA’s 504 Loan Program

SBA’s 504 loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

Proceeds from 504 loans must be used for fixed asset projects, such as:

  • The purchase of land, including existing buildings
  • The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
  • The construction of new facilities or modernizing, renovating or converting existing facilities
  • The purchase of long-term machinery and equipment

Typically, a 504 project includes three elements:

  • a loan (or first mortgage) secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost,
  • a second mortgage secured with a junior lien from an SBA Certified Development Company (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost,
  • and a contribution of at least 10 percent equity from the small business borrower.

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SBA Launches Mentoring Program

Posted by Hopeton on February 17, 2011

The U.S. Small Business Administration today launched an initiative to mobilize members of the current generation of successful business owners to mentor and support startups and entrepreneurs to help them become the next generation of great American companies.

As part of the White House’s Startup America initiative, the Entrepreneurial Mentor Corps (EMC) is aiming to support more than 1,000 startup and early-stage firms across the country. SBA is partnering with the Ewing Marion Kauffman Foundation in identifying organizations and mentoring best practices for the EMC program.

In line with that, today SBA Administrator Karen Mills announced one of the first initiatives of EMC, a pilot program that will match mentors with 100 startups in the clean energy sector.

“Who better for entrepreneurs and startups to learn from than individuals who have been down a similar path before,” Mills said. “Mentors can provide valuable insights critical to their success; from opportunities for financing, advice on hiring to even walking an entrepreneur through steps for taking a product or idea into the commercial market. The Entrepreneurial Mentor Corps will mobilize some of the best and brightest business leaders to help create the opportunities for success, drive innovation and spur job creation across the country.”

Through EMC’s clean energy pilot, four regional “accelerators” will identify and match mentors with 100 clean energy startups, to help them quickly grow their revenue, create jobs, and attract outside financing while avoiding pitfalls that frequently challenge startups. Accelerators are organizations that offer services ranging from mentoring and technical assistance to business guidance and focused networking.

The EMC clean energy pilot is a partnership between SBA, the Department of Energy (DOE) and the Advanced Research Projects Agency-Energy (ARPA-E). Initially, eligibility for the clean energy pilot will be limited to startups that have already received funding from either DOE or ARPA-E.

The four accelerators funded in the initial stage of the project include:

• CleanTech Open (Bay area and New England);
• CleanTECH San Diego (Southern California and the Southwest);
• Clean Energy Trust (Midwest); and,
• Nevada Institute for Renewable Energy Commercialization (Mountain Region).

Going forward, Startup America’s EMC program, through the partnership between SBA and the Kauffman Foundation, will work to create mentoring initiatives across many industry sectors with a target of helping more than 1,000 entrepreneurs annually and build a nationwide network of mentors, accelerators and successful startups.

For more information on the Entrepreneurial Mentor Corps program please visit http://www.sba.gov/startupamerica.

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SBA New Lending Initiatives Focus of Jan 31 Economic Perspectives

Posted by Hopeton on January 28, 2011

With small business owners and entrepreneurs in traditionally underserved communities continuing to face challenges accessing capital, the U.S. Small Business Administration announced two new initiatives aimed at increasing SBA-backed loans to small businesses in these markets.

Yolanda Olivarez

Yolanda Olivarez, Regional Administrator for SBA Region VI, which is headquartered in Dallas and includes Texas, Arkansas, Louisiana, New Mexico and Oklahoma, will discuss these initiatives on the January 31 edition of Economic Perspectives. Listen live at 5:30 p.m. on KAZI 88.7 FM or at kazifm.org.

SBA and U.S. Department of Commerce studies have shown the importance of lower-dollar loans to small business formation and growth in underserved communities. With that in mind, the two new loan initiatives – Small Loan Advantage and Community Advantage – are aimed at increasing the number of lower-dollar SBA 7(a) loans going to small businesses and entrepreneurs in underserved communities. The agency’s most popular loan product, 7(a) government-guaranteed loans can be used for variety of general business purposes, including working capital and purchases of equipment and real estate

Built on what the agency refers to as its “Advantage” platform, both Small Loan Advantage and Community Advantage will offer a streamlined application process for SBA-guaranteed 7(a) loans up to $250,000. These loans will come with the regular 7(a) government guarantee, 85 percent for loans up to $150,000 and 75 percent for those greater than $150,000.

Small Loan Advantage will be available to the 630 financial institutions across the country in the agency’s Preferred Lender Program (PLP). Under PLP, which includes most of the agency’s highest volume lenders, SBA delegates the final credit decisions to lenders.

SBA Administrator Karen Mills also today named Catherine L. Hughes, chairperson and founder of Radio One, Inc., and a former SBA borrower, to chair the agency’s new Advisory Council on Underserved Communities.

The Council will provide input, advice and recommendations on how SBA through its programs can help strengthen competiveness and sustainability for small businesses in underserved communities.

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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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Regional Administrator To Discuss SBA Loan Programs on Economic Perspectives May 17

Posted by Hopeton on May 15, 2010

Yolanda Olivarez

Yolanda Garcia Olivarez, Administrator for the U.S. Small Business Administration Region VI, will provide an update on the Obama Administration’s special loan initiatives through the SBA on the May 17 edition of Economic Perspectives, 5:30 p.m. – 6 p.m. on KAZI 88.7 FM.  Listen live online at kazifm.org.

As Regional Administrator, Olivarez is responsible for the delivery of the agency’s programs in Region VI, which is headquartered in Dallas and includes Texas, Arkansas, Louisiana, New Mexico and Oklahoma.  The SBA helps Americans start, build, and grow businesses.

Before joining SBA, Olivarez has spent more than 35 years in the trade, commerce and financial services industries.  Since 1995 she has been a senior vice president/commercial lender and business development officer at Wells Fargo Bank.  She also served 12 years as a Port Commissioner for the Port of Corpus Christi, where she led public finance bond projects for government entities on the state and federal level.  Olivarez was the first woman and Hispanic to chair the commission in its 75 year history.

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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.

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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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Best Sources for Small Business Loans Focus of August 3 Economic Perspectives

Posted by Hopeton on August 1, 2009

Even during these turbulent times, many financial institutions are still making small business loans.  Learn about some of the best sources for small business loans on the August 3 edition of Economic Perspectives on KAZI 88.7 FM.  The guests will be Theresa Lee, chief lending officer for the Texas Mezzanine Fund (TMF), Jaime Noyola, director of lending for the PeopleFund, Cindy Solano, Lead Lender Relations Specialist for the San Antonio District Office of the U.S. Small Business Administration, and Michelle Frith, outreach and marketing coordinator for the City of Austin Small Business Development Program (SBDP).

Texas Mezzanine Fund

Founded in 1998, TMF is a statewide community development financial institution that provides financing for businesses located in distressed areas, minority-owned businesses, and small businesses that create jobs for low and moderate-income people. It makes loans from $50,000 – $500,000 in tandem with other financial institutions and up to “stand alone” loans up to $300,000.  

PeopleFund

Since 1995 PeopleFund has strive ed to promote lasting economic vitality for low-income people by implementing strategies that create jobs, provide safe and affordable homes, and promote good economic policy decisions for communities.  It provides loans and revolving lines of credit from $20,000 – $200,000.

Small Business Administration

 The San Antonio District Office of the SBA provides financial assistance, business counseling and training and government contracting help to small businesses that are located in its area of operation which covers 55 counties in central and southwest Texas including the cities of Austin and San Antonio.  The SBA ‘s most popular loan program is the 7 (a) program which may guaranty up to 90 perccent of a loan for a participating lender.  The maximum loan eligible for guaranty is $2 million.

City of Austin Small Business Development Program

The City of Austin SBDP provides counseling and assistance to small businesses.  It is hosting the 6th annual Meet the Lender Business Loan Fair on August 6 3 p.m. – 7 p.m. at the Palmer Events Center, 900 Barton Springs Rd.  This is an opportunity to meet, network, and learn from area lenders about the loan process for your small business.

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