SBA Program Update

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SBA Program Update
Michael Foutch Economic Development
Specialist U.S. Small Business Administration
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Small Business Administration

• Small business plays a vital role in Nebraskas
  economy
• PAST As the unemployment environment was weak
  across the state from 2007-2010, small businesses
  in Nebraska represented ALL of the net new jobs.
• PRESENT Self employment in Nebraska jumped
  almost 8 from 2010 to 2011, with a 20 jump in
  female-owned small businesses.
• FUTURE Nebraskas economy will continue to
  prosper only with the encouragement of
  entrepreneurship and access to capital.
• How can the SBA help you with your business?

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SBA Nebraska District Office

• Since October 1, weve helped Nebraska
  entrepreneurs
• Get financing
• Nearly 95 million through 285 federally-guarantee
  d loans across the state
• Get contracts
• More than 100 million to Nebraska 8(a) firms
  last year
• Create jobs
• SBA loans directly led to Nebraska firms hiring
  1,275 new people, and helped retain 2,100 people

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SBA Nebraska District Office

• Since October 1, weve helped Nebraska Veterans
• Start a business
• 20 new veteran entrepreneurs
• Get financing
• Nearly 7 million through 26 federally-guaranteed
  loans across the state
• Create jobs
• SBA loans directly led to Nebraska veteran-owned
  firms hiring 83 new people, and helped retain 82
  jobs

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What does the SBA look for?

• Will the business have enough cash flow to be
  able to pay back the loan?
• Feasible business plan
• Management expertise and commitment
• Sufficient funds to operate for new owners, this
  means resources to meet start-up expenses
• Adequate owner equity invested in the business
• Enough collateral to secure the loan
• Or all available collateral if the loan cant be
  fully secured

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CAPLines Program

• Exciting way to finance small business working
  capital needs
• 5 million guarantee, same guidelines as 7(a)
• Use contract, purchase agreement and receivables
  as collateral
• Contract Loan Program is used to finance
  material, labor, and overhead needs for a
  specific contract or contracts.
• Seasonal Line of Credit Program is used to
  support buildup of inventory, accounts receivable
  or labor and materials above normal usage for
  seasonal inventory.
• Builders Line Program provides financing for
  small contractors or developers to construct or
  rehabilitate residential or commercial property.
• Working Capital Line is a revolving line of
  credit that provides short term working capital.
• Excellent way for a small business looking to do
  contract work with the federal, state or city
  government, or large developers

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Surety Bonds guarantee program

• What is it? Promise to pay if a company cannot
  perform the contract work
• Aimed at small firms lacking working capital or
  performance track record to secure bonding
  through other means
• Surety Bond guarantee up to 2 million
• SBA reimburses sureties between 70 and 90
  against losses sustained in a contractor default
• Nearest insurance company to Kearney
• Gene Lilly Surety Bonds (402-475-7700)

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Microloan program

• If youve been turned down by a bank, these offer
  small loans for start-ups and existing business
  up to 50,000
• Community Development Resources (CDR)
• [phone]
• Rural Enterprise Assistance Project (REAP)
• 402-687-2100
• Nebraska is one of the nationwide leaders in
  microloan financing and was the fifth-largest in
  the country in FY12.
• Microlending in the state grew 42 from 1.25
  million in FY11 to 1.78 million in FY12.

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Small Business Administration

• Takeaways
• There are federally-backed loan guarantees for
  small businesses
• SBA guarantee for loans up to 5 million
• If youve been turned down by a commercial
  lender, microloans may be available up to 50,000
• Our resource partners can help you
• Start with SCORE for free mentorship and
  one-on-one counseling
• Follow up with NBDC for your business plan
• We have information to guide you through the new
  Health Care Law
• Dont let this be the end of the conversation!

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