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SBA Program Update
Michael Foutch Economic Development SpecialistU.S. Small Business Administration
Small business plays a vital role in Nebraska’s 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 Nebraska’s economy will continue to prosper only with the encouragement of entrepreneurship and access to capital.
How can the SBA help you with your business?
Small Business Administration
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Since October 1, we’ve helped Nebraska entrepreneurs
Get financing
Nearly $95 million through 285 federally-guaranteed 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
SBA Nebraska District Office
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Since October 1, we’ve 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
SBA Nebraska District Office
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What does the SBA look for?
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• 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 loanOr all available collateral if the loan can’t be fully secured
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
o Contract Loan Program is used to finance material, labor, and overhead needs for a specific contract or contracts.
o Seasonal Line of Credit Program is used to support buildup of inventory, accounts receivable or labor and materials above normal usage for seasonal inventory.
o Builders Line Program provides financing for small contractors or developers to construct or rehabilitate residential or commercial property.
o 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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If you’ve been turned down by a bank, these offer small loans for start-ups and existing business up to $50,000
• Community Development Resources (CDR)(402) 436-2387
• 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.
Microloan program
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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 you’ve 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
•Don’t let this be the end of the conversation!
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