ࡱ> l5( b/ 0DArialngsp0kLxhv 0( 0DWingdingsp0kLxhv 0( 0 ` .  @n?" dd@  @@`` 2#     "# ! 0AA@8wʚ;ʚ;g4kdkdv 0^ppp@ <4dddd` 0Ldi <4!d!d 0L80___PPT10 /SBA OVERVIEW 0fCHARLOTTE JOHNSON ECONOMIC DEVELOPMENT SPECIALIST SMALL BUSINESS ADMINISTRATION 404-331-0100 EXT. 405gPgMYTHS (SBA has GRANTS or FREE money to start or run small businesses SBA makes direct loans SBA is there to pull my business out of the ditch I should wait to apply until I really need the money My personal credit will not be an issueFINANCING BASICS ((Poor management is cited most frequently as the reason BUSINESSES FAIL, inadequate financing is a close second. Whether you are starting a business or expanding, sufficient capital is essential. But it is not enough to simply have sufficient financing; knowledge is required to manage it well. APPLYING FOR A LOAN`You must prepare a Business Plan You must have sufficient collateral. List real property and other assets to be pledged to secure the loan. You must know the 5 C s of Credit &The 5 C s of CreditCAPACITY to repay is the most critical of the five factors. Lenders want to know how you intend to repay the loan. Lender will consider the cash flow from the business as the repayment. Payment history of credit relationships  personal and commercial. & ,5 C s of Credit (cont) CAPITAL is the money you personally have invested in the business and is an indication of what you will lose should the business fail. If you have a significant personal investment in the business you will do everything in your power to make the business successful.5 C s (cont)COLLATERAL or guarantees are additional forms of security you can provide. If you cannot repay the loan, the bank wants to know there is a second source of repayment. Both business and personal assets can be used as sources of collateral for a loan. 5 C s (cont)CONDITIONS focus on the intended purpose of the loan. Will the money be used for working capital or additional equipment, or inventory? Local economic climate conditions both within your industry and in other industries that could affect your business. 5 C s (cont)*CHARACTER is the personal impression you make on the potential lender. Are you trustworthy to repay the loan? Your educational background and experience in the business industry will be reviewed. Quality of your references and background and experience of your employees will also be considered. What is the Role of SBA@SBA provides guarantee against loss to the Lender Enables lender to make loans they would not otherwise make. Two primary loan guarantee programs  7(a) and 504 7(a)ZEligible For Profit Business Operate legally Small business must meet the size standard * R R  Ineligible Real Estate Investment Investment Speculation Non-profits Lending Institutions Businesses involved in activities of a prurient nature.PTerms and ConditionsAmounts Guarantees of between 75% and 85% Maximum guarantee of $1 Million to a maximum of $2 Million Maturity  up to 25 years&wwTerms and ConditionsxInterest Rates Determined by lender Fixed or adjustable Capped by law between 2.25 and 2.75 above the Wall Street Prime&jjQualifying FactorsCollateral Requirements Pledge business assets Personal guarantee Credit Requirements Adequate working capital Reasonable equity injection  expect 30% for new business Repayment ability from Cash Flow Management and Technical ExperienceHZ*ZZ ZUSE OF PROCEEDSVWorking Capital Equipment Inventory Real Estate Re-finance under certain circumstancesAlso under 7(a)pLow Documentation  One page application. Maximum loan amount is $150,000. 36 Hour response time. Pre-Qualification  Must use an Intermediary. Maximum loan amount is $250,000. SBA Express Loan ProgramMaximum loan amount $350,000 Allows revolving loans up to 7 years 36 hour turnaround time Loans $25,000 or less do not need collateral.  504 LoansFix asset loans Up to 20 years Max of 10-20% cash injection from borrower 50% of funds from private lending institution Up to 40% from an SBA Certified Development Company Lender has senior position SBA guarantees the 40%   504 cont.Allows a business to purchase land, acquire or construct buildings and acquire equipment and fixtures Must create 1 job for every $50,000 loaned on the 504 portion Must be classified as small (business net worth under $7 million & net profits under $2.5 million) ( " 504 cont.Owner must occupy 51% of an existing building or 80% of the newly constructed space. Investment properties such as apartments and strip shopping centers are not eligible Debt refinance is not allowed*$ Micro-LoanspBetween $500 to $35,000 Three micro lenders in State of Georgia Interest rate may be a little higher than bank!SURETY BOND PROGRAMSBA guarantees Bid, Performance, Payment and Ancillary Bonds issued by surety companies for construction, service and supply contracts and reimburses the sureties a percentage of the losses sustained if the contract defaults. SBA s guarantee provides the incentive necessary for sureties to issue bonds to contractors who could not otherwise compete in the contracting industry. }}# 8(a) Program (8(a) Program is NOT A CONTRACTING PROGAM 8(a) participants can receive 8(a) Sole Source contracts (up to $3 Million for Goods and Services and up to $5 Million for Manufacturing) without competing with any other small business. Participation time in Program is for a total of 9 yearsZ$ 8(a) cont.=The Applicant concern must be at least 51% owned and controlled by a Socially and Economically Disadvantaged Individual. Socially Disadvantaged Individuals: subjected to racial prejudice because of membership in a presumed Ethnic Groups, which include Black Americans; Hispanics; Native Americans; Asian Americans@z|"%  8(a) cont. Preponderance of Evidence: If individual is not a member of a presumed ethnic group, social disadvantaged status can be claimed based on the information submitted being of an amount that is sufficient enough to convince the processor that it is more likely to be true than not to be true.!&! 8(a) cont.NEconomically Disadvantaged Individuals Personal Net Worth is not greater than $250,000 at entry into the Program and not greater than $750,000 during Program participation. Also, an individual s Adjusted Gross income on Personal Tax Return cannot exceed $200,000 during Program participation.  (( (" 8(a) cont.xMust have operated business for at least two years or can meet the 2 year Waiver Requirements 2-Year Waiver Requirement  focus is on the background experience of owner since the business does not yet have an established track record. Must have adequate managerial experience and expertise in field of the business. J^ZZQZZ^R)# 8(a) cont/Must be a U.S. Citizen Must be a small businessTechnical Assistance|Small Business Development Centers SCORE Women Economic Development Agency - Atlanta Cobb Micro-enterprise - Kennesaw }Z}'SBA Georgia District Office www.sba.gov((( 3 THANK YOU!! 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Micro-LoansSURETY BOND PROGRAM8(a) Program 8(a) cont. 8(a) cont. 8(a) cont. 8(a) cont. 8(a) contTechnical Assistance(SBA Georgia District Office www.sba.gov  Fonts UsedDesign Template Slide Titles!_ Fred RegeFred Rege  !"#$%&'()*+,-./0123456789:;<=>?@ABCDEFGHIJKLMNOPQRSTUVWXYZ[\]^_`bcdefghijklmnopqrstuvwxyz{|}~Root EntrydO)Current UserSummaryInformation(ahZPowerPoint Document(8DocumentSummaryInformation8