Whatevering the Spirit of Business

1
Programs Services for Your Small Business
Ruben R. Garcia District Director San Diego
District Office
2
SBAs Mission

• The U.S. Small Business Administration (SBA) was
  created by Congress in 1953 to "aid, counsel,
  assist and protect, insofar as is possible, the
  interests of small business concerns." 

3
SBAs Part of the Stimulus Program

• 730 million additional SBA FY09 Budget
• 375 million for temporary fee reductions on SBA
  loans
• guarantees up to 90 percent for certain loans
• 255 million for a new loan program to help small
  businesses meet existing debt payments
• 30 million for expanding SBAs Microloan program
  (A Microloan is less than 50,000)

4
How Does SBA Help?

• Management Assistance
• Financial Assistance
• Government Contracting
• Disaster Relief
• Advocacy

5
SBA Success Stories

• America Online
• Apple Computer
• Callaway Golf
• Federal Express
• Oracle
• Rubios
• Staples

6
Management Assistance

• Services
• Business Consulting
• Training Programs
• SBA Resource Partners
• Receive funding from SBA through a grant
• Match grant funds with money from state,
  educational institutions, and private sector

7
Resource Partners

• SCORE Counselors to Americas Small Businesses
• Small Business Development Centers

8
Counselors to Americas Small Business

• Volunteer Organization
• Close to 100 experienced business executives with
  wide array of experience
• Individual, No-Cost Counseling Services
• Counseling In-Person or Online
• Fast, Easy, Confidential
• Low Cost or Free Training Programs

9
Counselors to Americas Small Business

• SCORE San Diego Chapter
• 550 West C Street, Suite 550
• San Diego, CA 92101
• T [phone]
• www.score-sandiego.org

10
Small Business DevelopmentCenter Network

• Cooperative effort of private sector, educational
  community, federal, state, and local government
• Combine resources of SBA, Chancellors Office of
  California Community Colleges, Southwestern
  College, MiraCosta College, and Imperial Valley
  College
• Other private sector funds

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Small Business DevelopmentCenter Network

• Business consulting services
• Utilize a network of paid, professional
  consultants
• No cost to client
• Free or Low Cost Training Programs
• Assistance with loan applications
• Intermediary for SBA CommunityExpress
• 3 Service Centers

12
Small Business DevelopmentCenter Network

• SBDC Network
• San Diego and Imperial Counties
• Southwestern College
• 900 Otay Lakes Road, Suite 1681
• Chula Vista, CA  91910
• T [phone]

13
Small Business DevelopmentCenter Network

• Imperial Valley SBDC
• 301 North Imperial Avenue, Suite B
• El Centro, CA 92243
• T [phone]
• www.ivsbdc.org

14
Small Business DevelopmentCenter Network

• North County SBDC
• 1823 Mission Street
• Oceanside, CA 92054
• T [phone]
• www.sandiegosmallbiz.com

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Small Business DevelopmentCenter Network

• Small Business Development International Trade
  Center
• Southwestern College
• 900 Otay Lakes Road, Bldg. 1600
• Chula Vista, CA 91910
• T [phone]
• www.sbditc.org

16
Small Business Training Network

• Virtual campus housing free training courses,
  workshops and knowledge resources
• Wide array of business tops
• Available 24/7
• www.sba.gov/training

17
SBA Financial Assistance

• Guaranteed Loans
• SBA Lending Partners
• No Direct Lending
• In FY 2008 SD District Office guaranteed 1,210
  loans worth 353.0 million
• No grants

18
SBA Business Loan Programs

• 7(a) Guaranteed Loans
• CDC (504) Loans
• Micro Loans
• Community Express Loans
• Lines of Credit
• Export Working Capital Loans
• International Trade Loans

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7(a) Guaranty Loan Program

• Maximum loan is 2 million
• Guaranty up to 1.5 million
• Guaranty Percentages
• 85 for loans lt150.0 k
• 75 for loans gt 150.0 k
• May vary with other programs

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Use of Loan Proceeds

• Any reasonable business purpose
• Purchase machinery equipment
• Working capital
• Leasehold improvements
• Receivables inventory
• Refinance existing debt
• Acquisition/Construction of real estate
• Business acquisitions

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Flexible Terms

• Maturities
• Based on use of proceeds ability to repay
• Up to 7 years for working capital
• 7 to 10 years for machinery equipment
• 25 years for real estate maximum maturity

22
Flexible Terms

• Interest Rates
• Negotiated between bank and borrower
• Based on current WSJ Prime Spread
• Fixed or Variable Rate
• SBA guidelines based on loan maturity amount
• lt 7 years Maximum Rate Prime 2.25
• gt 7 years Maximum Rate Prime 2.75
• Rates slightly higher for loans of 50.0 k or less

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Guaranty Fees

• Based on guaranteed portion of loan
• 150.0 k or less then fee 2 of guaranteed
  portion
• gt150.0 k lt 700.0 k then fee 3 of
  guaranteed portion
• gt700.0 k then fee 3.5 of guaranteed portion
• Additional .25 when guaranteed portion of loan
  exceeds 1.0 million
• Fee may be financed with loan proceeds

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Fees Associated With SBA Loan

• Guaranty Fee
• Packaging Fees
• Financed with loan proceeds
• Limited Prepayment Penalties
• Loan maturity gt 15 years
• Prepayment exceeds 25 of outstanding balance
• Occurs within 3 years of disbursement

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Eligibility

• Small by SBA Size Standards
• Operated as a for-profit
• Business located in U.S.
• Unable to secure reasonable financing through
  other means
• Some businesses ineligible

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General Size Standards

• Standards vary by industry
• Industry classification based on NAICS
• Based on average Annual Gross Receipts or number
  of employees
• Manufacturing 500 employees
• Wholesaling 100 employees
• Services, Retailing, Construction - 21 million
• Agriculture - 6 million

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CDC (504) Loan Program

• Administered by Certified Development Company
  (CDC)
• Fixed asset financing
• Commercial Real Estate
• Capital Equipment
• Assists with business expansion
• Promotes economic development
• Job creation
• Increases local tax revenues

28
CDC (504) Loan Program

• Bank provides 50 of Project
• CDC provides 40 of Project
• SBA guarantees 100 of debenture
• 10 or 20 year maturities with fixed rates
• Rate determined by market at time of sale
• Borrower provides 10 of Project

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CDC (504) Loan Program

• Maximum debenture up to 2.0 million
• Total project size may be larger
• Proceeds may not be used to finance
• Working capital
• Inventory
• Refinance debt

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CDC (504) Loan Program - Eligibility

• Same as 7(a) Loan program plus
• Net worth must be lt 7.0 million
• Average net profit (after taxes) lt 2.5 million
• Expansion must create 1 new job for each 50.0 k
  of project
• San Diego CDCs
• CDC Small Business Finance
• Southland EDC

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Micro Loan Program

• SBA loans funds to non-profit intermediary
• Intermediary makes small loans to businesses
• Loan amounts up to 35.0 k
• Maturities up to 6 years
• Business receives technical assistance through
  Intermediary

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Micro Loan Program

• Intermediary
• CDC Small Business Finance
• 2448 Historic Decatur Road, Suite 200
• San Diego, CA 92106
• Susan Lamping, Program Administrator
• T [phone]
• www.cdcloans.com

33
Community Express Loan Program

• Loans up to 250.0 k
• Targets
• Low to Moderate Income Areas (LMIs)
• Minority Owned Businesses
• Veteran Owned Businesses
• Women Owned Businesses
• Rates and Terms same as 7(a)
• Technical assistance through Intermediary

34
SBAs Credit Criteria

• Cashflow
• Commitment
• Character
• Credit
• Collateral

35
Application Process

• Apply for loan through SBA Participating Lender
• Lender submits application for SBA review and
  guaranty
• After SBA approval, loan closes and lender
  disburses funds

36
Why an SBA Guaranteed Loan?

• Longer terms Eases cashflow
• Competitive Rates
• No balloon payments
• No points
• Assists borrowers with shortfalls in equity
  and/or collateral
• Lenders risk reduced in transaction

37
Government Contracting

• Ensure small businesses receive fair share of
  government contracts
• SBA negotiates annual goals
• Goal is currently 23 and includes
• 5 for Woman Owned Small Businesses
• 3 for Service Disabled Veterans
• 5 for Small Disadvantaged Businesses
• 3 for Businesses in HUBZones

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Procurement Center Representative Program

• Assists small businesses in obtaining contracts
• 3 types
• Procurement Center Representatives (PCRs)
• Breakout PCRs
• Commercial Marketing Representatives (CMRs)
• Initiate Small Business Set-Asides
• Reserve procurement for competition
• Advocate on behalf of small business for full and
  open competition
• Market small businesses to prime contractors

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• Historically Underutilized Business Zone
• Government Contracting Preferences stimulate
• Economic development
• Employment growth
• A HUBZone area
• A qualified census tract
• A qualified non-metropolitan county
• Areas of High Unemployment or Low Income
• Federally recognized Indian Reservation

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• Business Eligibility
• Located in HUBZone
• Owned and controlled by US Citizen(s)
• 35 of employees reside in a HUBZone
• Meet applicable size standards
• Application, Information, HUBZone Areas
• https//eweb1.sba.gov/hubzone

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Small Disadvantaged Business (SDB)

• Eligible businesses receive benefits in federal
  procurement
• SBA certifies SDBs
• Firms added to Central Contractor Registry (CCR)
  for up to 3 years
• Contracting officers and large business prime
  contractors search CCR for potential suppliers.

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Small Disadvantaged Business (SDB)

• Eligibility
• 51 owned and controlled by socially
  economically disadvantaged person(s)
• Most minority groups qualify
• Net worth lt 750.0 k excludes equity in
  business and primary residence
• Meets applicable size standards
• Online Application Process
• http//www.sba.gov/sdb

43
8(a) Business Development Program

• Offers eligible businesses broad scope of
  assistance
• Obtaining government contracts
• Technical assistance
• Mentoring
• 2 Phases lasting a total of 9 years
• 4 year developmental stage
• 5 year transition stage

44
8(a) Business Development Program

• Eligibility
• 51 owned and controlled by socially
  economically disadvantaged person(s)
• Most minority groups qualify
• Net worth lt 250.0 k excludes equity in
  business and primary residence
• Meets applicable size standards
• Business in operation for 2 years
• Display reasonable success good character

45
8(a) Business Development Program

• Firms automatically qualify for SDB Certification
• Online Application Process
• http//www.sba.gov/sdb

46
Other Contracting Assistance

• Business Matchmaking Events
• www.businessmatchmaking.com
• Procurement Technical Assistance Center
• SD Contracting Opportunities Center
• 4007 Camino del Rio South, Suite 210
• San Diego, CA 92108-4189
• T [phone]
• http//www.ptac-sandiego.org

47
Faith Based Community Initiatives
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Presidents Statement

• "One of my most important initiatives is the
  Faith-Based and Community Initiative, because I
  recognize that government can hand out money, but
  what it cannot do is put hope in people's hearts
  or a sense of purpose in people's lives. What I
  want to do is unleash the great compassion of
  America, by changing America one heart, one soul,
  one conscience at a time."
• President George W. Bush 

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What is SBAs Role

• The United States Small Business
  Administration provides loan guarantees,
  technical support, grants and other services to
  help small business men and women achieve their
  goals. Faith-based and community organizations
  can play an important role in helping the SBA
  identify, train and finance the entrepreneurs
  whose businesses will bring jobs and hope to
  economically distressed communities all across
  our Nation.
• Hector V. Barreto - Previous SBA
  Administrator

50
SBA financial assistance for faith-based
organizations clarified

• For-profit subsidiary companies of community
  and faith-based organizations may be eligible for
  SBA financial assistance.SBA loans are NOT
  available to several types of businesses,
  including not-for-profit businesses or businesses
  principally engaged in teaching, instructing,
  counseling or indoctrinating religion or
  religious beliefs, whether in a religious or
  secular setting.

51
10 Agencies have FBCI Programs

• White House Office of Faith-Based and Community
  Initiatives
• Department of Agriculture
• Department of Commerce
• Department of Education
• Department of Health and Human Services
• Department of Homeland Security
• Department of Housing and Urban Development
• Department of Justice
• Department of Labor
• Department of Veterans Affairs
• Small Business Administration
• Agency for International Development

52
Faith Based and Community Initiatives are a
Success

• FBCI Organizations received more than 2.1
  Billion in grants in FY2008
• Federal Courts have upheld these initiatives
  stating that organizations do not become an arm
  of government by receiving funding.
• SBAs part of the FBCI is to educate all
  organizations of SBA programs and services.

53
How can our organization find out about funding
opportunities?

• First, you must become familiar with what is
  available.
• The Catalog of Federal Domestic Assistance (CFDA)
  is your guide to find the funding opportunities.
• To use the CFDA, locate the CFDA Number at the
  end of each listing.
• Use that number to search for the program on the
  CFDA website www.cfda.gov.

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What do we ask of you?

• If your organizations are in need of funds to
  expand your services, check out the grant
  possibilities available under this program.
• Allow SBA to present to your organizations an
  overview of our Programs and Services available
  to help people start or grow their businesses

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www.sba.gov/ca/sandiego
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San Diego District Office

• U. S. Small Business Administration
• 550 West C Street, Suite 550
• San Diego, CA, 92101
• T [phone]
• Email sandiego_at_sba.gov