Back to Course

Small Business Administration 101

0% Complete
0/0 Steps
Lesson 1 of 1
In Progress

SBA 101

Collin Gabriel September 7, 2022

LC (00:18):

Hello, and thank you for joining me today. As we discuss the us small business administration or SBA, my name is LC and I’m an outreach and marketing specialist for the us small business administration Heartland district office.

LC (00:38):

The SBAs mission is to help small businesses start grow, expand, and recover. State will gain a general understanding of the SBA network, how to access resources and the SBA programs available. The SBAs mission is very cleared. We are the only federal agency specifically dedicated to small business. We achieve this mission through four major areas of focus, education SP’s entrepreneurial development programs provide counseling and training to entrepreneurs, access to capital SP guarantees support loans to small businesses that may have challenges obtaining credit. SBAs charged with helping federal government meet contracting goals to small businesses. Lastly, advocacy, the SBA weighs in on and testifies on behalf of the us businesses regarding regulation impacts. We also conduct economic research and perform regional outreach.

LC (01:34):

We highly recommend business owners start their educational journey on SBA dot GOs. Here. They will find critical information regarding our various programs and activities, but also valuable tools like the learning platform here. They can gain access to videos, templates, including financials and business planning along with helpful guidance for each phase of business, whether that is starting out or scaling up. We understand that there is a lot of information on the SBA do site. If you are having a difficult time finding what you are looking for, or if you’re someone who prefers a more personal interaction, you can always reach out for guidance to your local SBA district office or to a local partner. Our success in achieving our mission is achieved through close partnerships and collaborations with local organizations, community advocates, and technical assistance providers. Small business owners can find their closest resource partners by clicking on the local assistance tab on and simply putting in their zip code. The list will populate in order of distance, starting with the nearest district office and will include resource partners, micro lenders, and 5 0 4 lenders. There are 68 SBA district offices and over 1400 resource partners across the country. So help is always near resource partners are truly our boots on the ground. They are there to provide free one-on-one business counseling and free or low cost courses in training based small business owners with access to capital networking events and opportunities to navigate government contracting and to provide a source of mentorship.

LC (03:12):

The SBA provides updates, shares new programs and highlights resources or current initiatives and activities through its various newsletters. You can sign up for the national SBA newsletter on to access the SBA Portland district office newsletter, which includes information specific to Oregon and Southern Washington. You can go to as many business owners know access to capital can make a major difference in the success and growth of a small business. The SBA has several programs to assist obtaining capital. Some of these programs can be accessed through for slash lender match. This easy use tool allows owners to put in their personal information, how much money they need and what money will be used for this information is then sent to SBA qualified lenders, both locally and nationwide lenders that are interested can then reach out. Within two business days. SBA provides capital to small for profit companies in three ways through loan guarantee programs through grants and other awards, and for very fast growing companies in equity investment,

LC (04:30):

Our loan guarantee programs are administered through third party lenders and can provide funds for a variety of business needs. FBA loan are flexible in their use and are there for a variety of purposes like purchasing inventory, working capital expenses like payroll, or to purchase a new building or heavy machinery. These loans are specifically designed for business owners that may be perceived as risky by traditional lenders due to their credit history, lack of assets that could be used as collateral are smaller. Capital infusions, SBA loans are administered through third party institutions and SBA backs or guarantees a portion of the loan, meaning that if the borrower should default on the loan, the SBA can back up to 90% of the funds vote to the lender by reducing the risk lenders can comfortably make more deals and more small businesses have additional opportunities to get the capital they need. This particularly affects those individuals and regions that have historically been both socially and economically disadvantaged, creating stronger communities through economic stability. It is important to note that the SBA only directly processes and funds E D or economic injury disaster loan E D loans were created for businesses and residences that have experienced damage closure and revenue decrease due to natural disaster like fires, flooding, and pandemics. This is also one of the only times that the SB has the ability to fund nonprofits and residential homes.

LC (05:59):

Micro loans are administered through nonprofit organizations and nonprofit community development, funding, institutions, or CDFIs. These lending institutions are locally focused and primarily oriented to financial inclusion and economic development of low income communities. Micro loans have been developed to assist with funding amounts between $550,000. These funds can be used to start businesses, small projects, or to assist in growth opportunities. Micro loans were designed to help business owners increase their credit scores and credit limits over time. So they can position themselves to achieve their dreams. Micro lenders also provide business guidance and assist system loan process and paperwork. SBA seven a loans have a maximum loan amount of $5 million maturity of 10 to 25 years and can be used for nearly any business purpose, making them one of the most popular SBA loan guarantee programs. Some examples for how an owner may use a seven a is to purchase real estate equipment inventory, working capital. In some cases it can be used for refinancing business debt seven a can even be used in purchasing in existing business. 5 0 4 loans are used for major fixed assets with a useful life of at least 10 years. This is a long term fixed street mortgage loan for purchasing of land or existing buildings, construction of new buildings, energy efficient upgrades, and items such as heavy equipment. The maximum loan amount is 5 million or 5.5 million for manufacturers with a maturity of up to 25 years. In many cases, the borrower will only need 10% down

LC (07:42):

Because SBA loan guarantee programs were designed to give a hand up to those who are struggling in order to qualify for an SBA guaranteed loan. The borrower showed that they would not be able to obtain credit else there with reasonable terms.

Speaker 2 (08:04):

The SBA has really been a critical partner for me, uh, throughout growing my company, be that, uh, advice one-on-ones with individuals in the, in the banking industry or SBA that has been able to add counsel to my program, uh, or specifically even loan products that we’ve been able to access to help ourselves grow Cova would not be in the current position. We are now had we not had access and, uh, uh, firm support from SBA to help us.

LC (08:45):

The SV also provides funding through various grant and award programs. The state trade expansion program for step helps small businesses overcome obstacles to exporting by providing grants to cover costs associated with entering and expanding into international markets. These grants can be anywhere from a hundred thousand to 2 million.

Speaker 3 (09:09):

The SBA has been helpful given our business model of licensing around the world. We, uh, attend many different trade shows and the step grants within the state of Oregon has been really helpful for helping us with travel, getting us to some of the different trade shows and to assist us when we’re there. It’s actually great to meet other people that have been assisted by the SBA as well.

LC (09:33):

There is $4 billion dedicated to small business, innovative research, or S B I R and small business technology transfer or TTR. There are 11 federal agencies that participate in these two grant programs by allocating at least 3.2% of their annual budget to fund small businesses through research and development, federal projects involving technological and innovation needs for profit businesses with under 500 employees can receive funding in three different phases, including research development and commercialization of their projects.

LC (10:12):

Government contracting can be highly lucrative for many small businesses. The United States government is the largest purchaser of goods and services in the world spending over 500 billion each year. Some small business owners may shy away from government contracting because they’re unaware that the government may have a need for the product or service they are offering. But there are endless possibilities that stripes from pens and office supplies, food services, project management, construction to tanks and weapon systems and everything in between the SP insured that at least 23%, all government contracts are provided to small businesses. And we assist with certifications that allow for contract set asides to small businesses whose ownership is held by underrepresented groups. We also oversee a highly effective mentorship program that allows small businesses to work with experienced government contractors to help propel them into success. Certifications can be granted to companies with at least 51% ownership from the following groups, w O S B or women owned small businesses, eight a or economically, and socially disadvantaged individuals like those in the bipo community and potentially the LGBTQ plus community hub zone or historically underutilized business zones and SD V OS B or service disabled veteran owns small business.

LC (11:39):

These notifications allow for small businesses to compete for government contracts by setting goals that 22% of all federal contract dollars are going to these underrepresented groups. Some contracts are even reserved or set aside for certified businesses. The mentor protege program benefits the small business through joint ventures, mentoring, training, management, technical assistance, and access to tools and resources. The purpose of the mentor protege program or N PPP is to provide small business development assistance and enhance the ability of these small business proteges to successfully compete for federal contract, the protege pairs with a mentor company that has experience and success in contracting to access this developmental assistance and build capacity to grow and compete on contracts. In order to obtain a mentor, the small business must self certify a small under a NA code or the north American industry classification system, which is the industry or scope of work they perform.

LC (12:44):

And in which they are seeking the MPP, they may seek a mentor protege agreement or MPA and a secondary mix code in which it has done business before SB sure, D bonds allow for small businesses to compete for larger contracts, generating growth, new jobs, and contributions to our nation’s economy. Bonding is required for all government contracts and for many private contracts, too. SB surety bonds, lower working capital requirements on a million dollar contract. It is not uncommon for a bond company on the open market to require for a business to have 10% or a hundred thousand in liquid cash. Meaning money in the bank in authorized SB bond agent can reduce that to just 5% or $50,000. SBA also allows for more flexibility in what qualifies as liquid cash, allowing unused portions of business lines of credit to count toward cash requirements, SB surety, bonds increase bond capacity. In many instances, the SBA can almost double bond capacity in the open market. If you had 50,000 in the bank and 50,000 untouched on a business line of credit, that would only count as 50,000 and you would qualify for up to 500,000 in bonding. The SBA would see that as a total of $100,000 in liquid cash. And you could bond for up to 2 million by increasing bond capacity. Small businesses can now compete for larger contracts, which will quickly propel them forward.

LC (14:27):

The overall takeaway is that the SBA is here to provide resources and guidance to small businesses. To help them start grow, expand, and recover. We do this through our various educational resources, which include the website, newsletters, webinars, and training, and our 1400 resource partners across the country. The SBA assists small businesses with gaining access to the capital they need through various low guarantee programs, grants, and awards, equity investments, and contract bonding. Lastly, the SBA makes sure that there are opportunities for small businesses to compete in federal contracts, by setting goals for all federal agencies and by overseeing certifications and through actions of advocacy. If you have further questions about the SBA or any of our SBA programs, please feel free to reach out to us at the SBA Portland district office. Our phone number is (503) 326-2682. You can also send an email to P DX help If you would like to get in touch with me directly, you can reach out to me at Ashley, a S H L E Y dot lamb, Beth L a M B E T H. Thank you for joining me today. I hope the rest of your day is absolutely beautiful.