To reach a larger audience, the U.S. Small Business Administration is now posting informational videos on YouTube. The Small Business Administration recently launched it's own YouTube channel, joining an increasing number of federal agencies that are taking advantage of the popular video-sharing platform to reach a larger audience.
“With millions of visitors, most of them under 35, YouTube offers a prime opportunity to use current technology and the appeal of a popular online platform to further promote the agency’s programs and services,” SBA Administrator Karen Mills says. “By expanding its outreach, SBA will be providing more current and potential entrepreneurs with the necessary tools to start, grow and succeed in their businesses.”
In a statement released Aug. 26, SBA said it is intent on reaching this audience with its message of entrepreneurship, the importance of small business to the nation’s economy and information on the agency’s programs and services.
The SBA YouTube channel debuted with a 60-second introduction to SBA, its programs and services, and a 10-part “Delivering Success” series co-produced with the U.S. Postal Service.
Future content will include a variety of videos with more in-depth information about SBA programs and services to inform current and potential entrepreneurs. Topics will cover how small businesses can take advantage of the Recovery Act loan programs, government contracting opportunities, exporting to increase market share, counseling and training on how to start and grow a small business, and small business success stories.
Showing posts with label SBA. Show all posts
Showing posts with label SBA. Show all posts
Monday, August 31, 2009
Wednesday, June 10, 2009
New Small-Business Loans: Financial Help for a Few Lucky Shops
By Diana Ransom SmartMoneyAccording to the Small Business Administration, thousands of needy small-business owners are about to receive some debt relief — just in the nick of time. Beginning on June 15, the agency will begin doling out 10,000 deferred-payment loans of up to $35,000 to small businesses that are struggling to stay afloat.
Under the American Recovery Capital (ARC) program, small businesses (private, for-profit enterprises with up to 500 employees) that are at least two years old and can demonstrate an immediate financial hardship including a 20% decline in sales, revenues or working capital, may apply for loans directly with participating SBA-approved small-business lenders. Businesses must use the loans to pay off certain types of outstanding small-business debt, including credit-card debt, capital leases and notes payable to vendors.
While this quick injection of cash could help some small businesses stay afloat, it will only help a small fraction of the struggling businesses that are out there, says Mark Deo, chief executive of the SBA Network, a small-business consultancy in Torrance, Calif. In addition, it will be difficult for businesses to find lenders willing to dole out the loans (and take on the risk).
Here's a breakdown of the pros and cons of the SBA's new lending program:
Pros
Lack of fees: Unlike previous SBA loans, borrowers won't have to pay any fees. Lenders aren't allowed to charge ARC Loan recipients any fees or costs. (Though, they may charge for direct costs associated with securing and liquidating collateral if the borrower defaults.)
No interest: The SBA pays the loan's interest (Prime plus 2%) for the life of the loan and fully guarantees it.
Deferred payments: The disbursement period, which lasts up to six months, is followed by a 12-month deferral period in which borrowers aren't required to repay the ARC Loan principal. After the deferral period, the borrower makes payments on only the principal and can take up to five years to repay the loan.
Extra cash flow: By using the loan to pay off company debts, it frees up other funds that can be put toward business expenses, such as buying inventory or making payroll, says SBA Network's Deo. "They can pay off their credit-card debt and even free up some assets for reinvestment," he says.
If Bill and Lorraine Flegenheimer, co-owners of Flegenheimer International, an El Segundo, Calif., customs broker, are able to lasso an ARC Loan, they're planning on using the proceeds to pay down a $40,000 secured business loan and add a staff member. "Hiring an additional person would be a tremendous help," says Bill. "We can expand our service, which can help boost business."
Cons
Limited number of loans: There are, according to the SBA, roughly 30 million small businesses in the U.S. However, there are only 10,000 loans available under the ARC program — meaning that the program will only help a small fraction of small businesses get back on their feet, says Deo.
Lenders may refuse to participate: Even though the ARC loans are 100% guaranteed by the SBA, participating lenders will still be required to issue funds without receiving any of a loan's principal for a full year, says Deo. And since lenders aren't allowed to charge fees for these loans, they'll also take on the administrative costs, he says.
Another problem: Many lenders may not have the financial muscle to finance the loans, the demand for which is expected to be high. "We're having meetings all week to see if we have the capacity to participate in the program," says Marylee Gotch, a spokeswoman for KeyBank.
Strict eligibility requirements: Businesses are required to show that they were either profitable or maintained a positive cash flow in at least one of the past two years. A business also needs to demonstrate — via quarterly cash flow projections — its ability to meet current and future debt obligations, including future repayment of the ARC Loan.
Lou Hoffman, chief executive of the Hoffman Agency, a San Jose, Calif., public relations firm, would welcome the opportunity to reduce his business's debt burden. However, he doesn't believe his business will pass muster. "Banks won't make loans unless there's a recent track record of profitability." That, he adds, "rules out most small businesses (including us)."
two years at The Wall Street Journal Sunday, where she wrote personal-finance articles and a column about young people starting out. Ransom has held internships in the New York bureau of the Christian Science Monitor, where she covered banking and politics, and the New York Daily News, where she tracked everything from marketing and personal-finance topics to the New York Stock Exchange and various corporate criminal proceedings. Before that, she spent a year at Fast Company magazine covering entrepreneurs, technology and marketing. Ransom has a master's degree in journalism and a certificate in business and economic reporting from New York University. She also holds a bachelor's degree in marketing from George Mason University. Copyright 2009 Dow Jones & Company, Inc.
Thursday, April 30, 2009
Update on the American Recovery and Reinvestment Act: Help for Small Businesses
On Monday, Sen. Tom Harkin and Gov. Chet Culver hosted a community event at the Dallas Center - Grimes High School that offered participants insights into the details (as they are known) of the American Recovery and Reinvestment Act of 2009 (Recovery Act).
A panel for small businesses and workforce issues presented some very useful information and a few members of the The New Iowa Entrepreneurs’ Coalition were there to take notes. We were told that videocast of the event would be available but I have not found it yet.
Click on the title of the next section for a podcast from the SBA.
Here's a summary of the American Recovery and Reinvestment Act's programs specifically targeted to small businesses (as defined by the SBA) and the banks that lend to them.
We've all read about the bail outs for big banks and big businesses over the last several months. Now, the current administration has launched a series of programs specifically targeted to small businesses (as defined by the SBA) and the banks that lend to them.
The goal of the program, part of the American Recovery and Reinvestment Act, is to provide entrepreneurs and lenders some financial relief from the current economic crisis that will help encourage borrowing and lending to all small business, including start-ups. It also provides a new program to help businesses that are struggling to make payments on an existing loan.
This loan program, called the America's Recovery Capital (ARC) will soon offer deferred-payment loans of up to $35,000 backed 100 percent by SBA to viable small businesses that need help making payments on an existing, qualifying loan for up to six months. (Note: the existing loan does not have to be a SBA loan to qualify.) Repayment does not begin until 12 months after the loan is fully disbursed and will be for the principal amount only. (ARC loans cannot be made to cover payments on an existing loan that was guaranteed by SBA before February 17, 2009, the day the bill was signed into law.)
As of this writing, the final details on the ARC were still being worked out and the loans were not yet available. Check with your local bank or SBA Website to find out when these loans will be available.
The other part of the program involves up to $15 billion from the Treasury Department to unlock the secondary markets for small business loans. The secondary markets for 7(a) and first lien 504 securities has ground to a virtual halt over the last year. That, in turn, has made banks less willing to make the loans as they depend on these secondary markets to buy up their existing loans, thereby gaining liquidity for future lending. The government has now announced that the government will stand ready to purchase 7(a) and 504 first-lien securities. The goal is to encourage banks to make loans as they now have a ready buyer in the form of the Treasury Department committed to buy those loans from the bank once they are made.
In addition, to the above programs, the Act also includes temporary elimination of 7(a) and 504 loan fees. Fees for a 7(a) loan are based only on the guaranteed portion of the loan and depend on the size of the loan. Fees range from 2% to 3.75%. Fees for 504 loans generally run about 1.5% for the application fee. This, along with the fee to the mortgage lender, will be waived.
Also under "discussion" is the allowance for allowing some use of 504 funds restructuring of existing debt that was previously used to acquire fixed assets. Further guidance regarding this provision is expected to be released soon.
The SBA formally guaranteed participating banks 75-85% of their portion of 7a loan funds. They have now raised this guarantee to 90%, again in an attempt to decrease the risk to a participating bank and encourage lending to small businesses. This increased guarantee and loan fee waivers are good through the end of 2009 or until the designated funds for them are exhausted.
The Recovery Act includes other initiatives to help business owners with under $15 million in gross receipts, including targeted tax relief. If you experienced a loss in 2008, you can "carryback" this loss for up to the previous five years to receive a tax refund for taxes previously paid on your profits. Previous carrybacks were limited to two years. If, after applying this carryback to previous years you still have a net operating loss (nol), you can carry it forward for up to 20 years. This new extension applies only to businesses that have gross receipts of $15 million or less.
New extensions on depreciation rules allow you to accelerate depreciation taken on new assets purchased in 08 and 09.
Last year, lawmakers allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off 50 percent of the cost of depreciable property, such as equipment, tractors, wind turbines, solar panels and computers acquired in 2008. Increase deductions mean less taxable profits to your business.
The new rules extend this 50 percent bonus depreciation allowed for property with a recovery period of 20 years or less for 2009. In addition, Code Section 179 which allows for accelerated depreciation for used or new assets, has been increased from $125K to $250K. Unlike Code Section 179, depreciation expensing that is available for new or used property, bonus depreciation is available only for new property or equipment.
Just remember, the more you increase depreciation for 09, the less you'll have available for future years. Contact your CPA or tax accountant about how these new provisions might allow you to decrease your taxable income for 09.
To find out more about these programs, visit the SBA website or the Des Moines Area SBA District Office to obtain a list of SBA-participating lenders in our area.
Our Small Business Development Centers (SBDC) are partially funded through the SBA. These offices offer free counseling and research to small businesses. They also are knowledgeable about other resources in your area and can connect you to other service provides and possible financing sources.
Finally, you will find a collection of other useful links by visiting the New Iowa Group web site and clicking on the 'Business Resources' hotlink.
A panel for small businesses and workforce issues presented some very useful information and a few members of the The New Iowa Entrepreneurs’ Coalition were there to take notes. We were told that videocast of the event would be available but I have not found it yet.
Click on the title of the next section for a podcast from the SBA.
Here's a summary of the American Recovery and Reinvestment Act's programs specifically targeted to small businesses (as defined by the SBA) and the banks that lend to them.We've all read about the bail outs for big banks and big businesses over the last several months. Now, the current administration has launched a series of programs specifically targeted to small businesses (as defined by the SBA) and the banks that lend to them.
The goal of the program, part of the American Recovery and Reinvestment Act, is to provide entrepreneurs and lenders some financial relief from the current economic crisis that will help encourage borrowing and lending to all small business, including start-ups. It also provides a new program to help businesses that are struggling to make payments on an existing loan.
This loan program, called the America's Recovery Capital (ARC) will soon offer deferred-payment loans of up to $35,000 backed 100 percent by SBA to viable small businesses that need help making payments on an existing, qualifying loan for up to six months. (Note: the existing loan does not have to be a SBA loan to qualify.) Repayment does not begin until 12 months after the loan is fully disbursed and will be for the principal amount only. (ARC loans cannot be made to cover payments on an existing loan that was guaranteed by SBA before February 17, 2009, the day the bill was signed into law.)
As of this writing, the final details on the ARC were still being worked out and the loans were not yet available. Check with your local bank or SBA Website to find out when these loans will be available.
The other part of the program involves up to $15 billion from the Treasury Department to unlock the secondary markets for small business loans. The secondary markets for 7(a) and first lien 504 securities has ground to a virtual halt over the last year. That, in turn, has made banks less willing to make the loans as they depend on these secondary markets to buy up their existing loans, thereby gaining liquidity for future lending. The government has now announced that the government will stand ready to purchase 7(a) and 504 first-lien securities. The goal is to encourage banks to make loans as they now have a ready buyer in the form of the Treasury Department committed to buy those loans from the bank once they are made.
In addition, to the above programs, the Act also includes temporary elimination of 7(a) and 504 loan fees. Fees for a 7(a) loan are based only on the guaranteed portion of the loan and depend on the size of the loan. Fees range from 2% to 3.75%. Fees for 504 loans generally run about 1.5% for the application fee. This, along with the fee to the mortgage lender, will be waived.
Also under "discussion" is the allowance for allowing some use of 504 funds restructuring of existing debt that was previously used to acquire fixed assets. Further guidance regarding this provision is expected to be released soon.
The SBA formally guaranteed participating banks 75-85% of their portion of 7a loan funds. They have now raised this guarantee to 90%, again in an attempt to decrease the risk to a participating bank and encourage lending to small businesses. This increased guarantee and loan fee waivers are good through the end of 2009 or until the designated funds for them are exhausted.
The Recovery Act includes other initiatives to help business owners with under $15 million in gross receipts, including targeted tax relief. If you experienced a loss in 2008, you can "carryback" this loss for up to the previous five years to receive a tax refund for taxes previously paid on your profits. Previous carrybacks were limited to two years. If, after applying this carryback to previous years you still have a net operating loss (nol), you can carry it forward for up to 20 years. This new extension applies only to businesses that have gross receipts of $15 million or less.
New extensions on depreciation rules allow you to accelerate depreciation taken on new assets purchased in 08 and 09.
Last year, lawmakers allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off 50 percent of the cost of depreciable property, such as equipment, tractors, wind turbines, solar panels and computers acquired in 2008. Increase deductions mean less taxable profits to your business.
The new rules extend this 50 percent bonus depreciation allowed for property with a recovery period of 20 years or less for 2009. In addition, Code Section 179 which allows for accelerated depreciation for used or new assets, has been increased from $125K to $250K. Unlike Code Section 179, depreciation expensing that is available for new or used property, bonus depreciation is available only for new property or equipment.
Just remember, the more you increase depreciation for 09, the less you'll have available for future years. Contact your CPA or tax accountant about how these new provisions might allow you to decrease your taxable income for 09.
To find out more about these programs, visit the SBA website or the Des Moines Area SBA District Office to obtain a list of SBA-participating lenders in our area.
Our Small Business Development Centers (SBDC) are partially funded through the SBA. These offices offer free counseling and research to small businesses. They also are knowledgeable about other resources in your area and can connect you to other service provides and possible financing sources.
Finally, you will find a collection of other useful links by visiting the New Iowa Group web site and clicking on the 'Business Resources' hotlink.
Saturday, January 17, 2009
What Does President-Elect Obama’s SBA pick mean to you?
If you know me personally - you know that I am a bit of a political junkie and pretty well known for my policy "wonkishness". As we all approach this inaugural week with its history, ceremony and pomp - I am thinking, "What now? What (if anything) will an Obama administration mean for small business?"
I think we received a pretty good signal that the importance of the US Department of Commerce would be elevated in an Obama administration with the selection of Governor Richardson as its new Secretary. But now that Gov. Richardson has withdrawn, we must look to the new appointment for Commerce Secretary and to some others that Obama tapped for business leadership positions.
In late December the President-elect nominated a venture capitalist to head-up the Small Business Administration. Obama tapped Karen Gordon Mills, president of MMP Group, a private equity investment firm in Brunswick, Maine, to lead the SBA.
Several business media sites have asked small business experts and advocates for their thoughts on the Mills appointment:
"Hopefully, as a Harvard Business School graduate, Ms. Mills will demand more accountability from SBA programs.
"This department has been more fluff than action and according to our surveys has not served small businesses well. By this we mean that 47 percent of respondents said they had not been successful in obtaining help or viable options from the SBA in the past.
"For the average, successful small business, the SBA offers little in the way of viable information or support. The hoped-for emphasis of the Obama administration on the middle class, in which most small business managers fit, may change this lack of focus and follow-through." -- Donald Mazzella, publisher of Small Business Digest.
“We look forward to working together with Administrator Mills. In these difficult economic times, it is more important than ever for the SBA to refine, restructure and implement programs that will help America’s small business owners do what they do best – grow their businesses and create jobs, and thus help guide America out of this economic downturn.
"We hope that the administrator will begin to focus the agency’s efforts toward our established businesses, helping them with the technical assistance they need to grow, rather than focusing on starting businesses. Since 2001, the SBA has undergone a 27 percent budget cut, hampering it from providing the very programs that will help our economy the most.
"Her challenges are our challenges, and working together we can make a difference.”-- Barbara Kasoff, President and Co-Founder of Women Impacting Public Policy
“President-elect Obama's decision to name an SBA administrator so early in the transition is a good sign for small businesses. This appointment shows that his economic team recognizes the key role that small firms play in job creation and the need to take quick steps to revitalize the agency's role in spurring growth."
“Through budgets cuts and mismanagement during the last eight years, the SBA has become nothing more than a shell of the agency it used to be. Reversing this course is essential, and I look forward to working with the new administrator to accomplish this during the next four years."-- Nydia M. Velázquez, D-N.Y. House Small Business Committee Chairwoman
“Advantages: In general venture capitalists help small companies grow, and that bodes well for her.
"She is not a career politician. By nature the Small Business Administration exists to assist small businesses, and not all politicians can relate to the small business owner.
"Obama likes ‘green energy,’ and by picking Mills she may have a good understanding of the nuances of this field.
"Venture capitalists by very nature are risk takers, and it is an extremely competitive business. This administration may need to take some risks to help this very important component of the economy.
"Disadvantage: Most small businesses are ‘mom and pop’ and will never get venture capital nor want it. She may have a hard time relating to these truly ‘small’ businesses.”-- Scott Testa, a consultant who teaches marketing at St. Joseph’s University in Philadelphia
So, What do you think of the SBA and Obama's choice?
I think we received a pretty good signal that the importance of the US Department of Commerce would be elevated in an Obama administration with the selection of Governor Richardson as its new Secretary. But now that Gov. Richardson has withdrawn, we must look to the new appointment for Commerce Secretary and to some others that Obama tapped for business leadership positions.
In late December the President-elect nominated a venture capitalist to head-up the Small Business Administration. Obama tapped Karen Gordon Mills, president of MMP Group, a private equity investment firm in Brunswick, Maine, to lead the SBA.
Several business media sites have asked small business experts and advocates for their thoughts on the Mills appointment:
"Hopefully, as a Harvard Business School graduate, Ms. Mills will demand more accountability from SBA programs.
"This department has been more fluff than action and according to our surveys has not served small businesses well. By this we mean that 47 percent of respondents said they had not been successful in obtaining help or viable options from the SBA in the past.
"For the average, successful small business, the SBA offers little in the way of viable information or support. The hoped-for emphasis of the Obama administration on the middle class, in which most small business managers fit, may change this lack of focus and follow-through." -- Donald Mazzella, publisher of Small Business Digest.
“We look forward to working together with Administrator Mills. In these difficult economic times, it is more important than ever for the SBA to refine, restructure and implement programs that will help America’s small business owners do what they do best – grow their businesses and create jobs, and thus help guide America out of this economic downturn.
"We hope that the administrator will begin to focus the agency’s efforts toward our established businesses, helping them with the technical assistance they need to grow, rather than focusing on starting businesses. Since 2001, the SBA has undergone a 27 percent budget cut, hampering it from providing the very programs that will help our economy the most.
"Her challenges are our challenges, and working together we can make a difference.”-- Barbara Kasoff, President and Co-Founder of Women Impacting Public Policy
“President-elect Obama's decision to name an SBA administrator so early in the transition is a good sign for small businesses. This appointment shows that his economic team recognizes the key role that small firms play in job creation and the need to take quick steps to revitalize the agency's role in spurring growth."
“Through budgets cuts and mismanagement during the last eight years, the SBA has become nothing more than a shell of the agency it used to be. Reversing this course is essential, and I look forward to working with the new administrator to accomplish this during the next four years."-- Nydia M. Velázquez, D-N.Y. House Small Business Committee Chairwoman
“Advantages: In general venture capitalists help small companies grow, and that bodes well for her.
"She is not a career politician. By nature the Small Business Administration exists to assist small businesses, and not all politicians can relate to the small business owner.
"Obama likes ‘green energy,’ and by picking Mills she may have a good understanding of the nuances of this field.
"Venture capitalists by very nature are risk takers, and it is an extremely competitive business. This administration may need to take some risks to help this very important component of the economy.
"Disadvantage: Most small businesses are ‘mom and pop’ and will never get venture capital nor want it. She may have a hard time relating to these truly ‘small’ businesses.”-- Scott Testa, a consultant who teaches marketing at St. Joseph’s University in Philadelphia
So, What do you think of the SBA and Obama's choice?
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