SCORE Luncheon Remarks

11:45 A.M., Friday, November 13, 2009
Oak Hill Country Club

SBA UPDATE
Overview of Our Programs & Services

Victoria Reynolds
Deputy District Director
Buffalo District SBA

 

Financial Assistance

            7(a) Guaranty Loans
            504 Loans
            SBIC Program
            Surety Bonds
            Microloan Program

Technical Assistance

            SCORE
            Small Business Development Centers (SBDC)
            Women’s Business Centers (WBC)
            US Export Assistance Centers (USEAC)
            Procurement Technical Assistance Center (PTAC)

Government Contracting

            8(a) Program
            HubZone

Advocacy

            Your voice in government
            Principal resource for small business statistics and business trends
            Monitors regulatory and policy proposals of more than 20 federal agencies for impact on small business

Disaster Assistance

            Direct loans from the SBA for:
            Uninsured losses on real estate and property for homeowners and renters
            Uninsured losses on business real estate and property
            Economic injury for businesses (working capital)
            Military Reservists called to active duty

SBA Financing Programs

SBA Guaranty Loans

The SBA Guarantees loans made through commercial lenders to small businesses…

7(a) Program - guarantied loans made through participating Lender’s

504 Program – economic development loans tied to job creation/retention where SBA provides subordinate financing to a bank for the purchase of fixed assets only

What is a 7(a) Guaranty?

            Inducement to a Lender to make a loan that they might not otherwise be able to make because the loan request does not meet the Banks credit criteria

            In the event the Borrower is unable to pay the loan back, the SBA pays the bank back a percentage of the money they are owed based on the amount guarantied (50%, 75%, or 85%)

Types of 7(a) Loans

What can the Money be used for?

            Real estate; purchase, construction, or renovation
            Machinery & Equipment
            Furniture & Fixtures
            Inventory
            W/C
            Some Debt refinancing*

Business Need vs. Individual Need

Terms

Interest Rates

Fees

Eligibility Requirements

Why Banks come to us?

            Credit…Something about the loan request  doesn’t meet their credit guidelines
            Collateral
            Equity
            Type of business
            Startup, no history
            Cash flow, need the extended maturity
            Maturity
            Legal Lending Limits

What do we look for?

            The same credit issues banks look at:
            Cash flow; historical performance or projections
            Management ability & Character (Credit)
            Equity
            Collateral

What is the Benefit of an SBA Loan?

            Borrower obtains a loan they would otherwise not obtain
            An SBA Guaranty may permit your lender to provide a longer maturity

But remember:

“ We don’t make bad loans good, we make good loans better ”