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Indiana Small Business Resource



                                                                              SBA 100
                                                                              page 25
                                                                Counseling              8

                                                                Capital                 14

                                                                Contracting             26 • connect with us @
                                                                                                 P R

                                                                                                 Publishers of Small Business Resource

                                                                                                  Phone: 863-294-2812 • 800-274-2812
                                                                                                  Fax: 863-299-3909 •

                                                                                                  Joe Jensen         
                                                             2011-2012 INDIANA

    FEATURES                                                                                      English Small Business Resource Advertising
                                                                                                  Nicky Harvey
                                                                                                  Martha Theriault

    4         Introduction                            30    Disaster
                                                                                                  Kenna Rogers  

              4    Administrator’s Letter                   Knowing the types of assistance       Production
              6    Director’s Message                       available for recovery.               Diane Traylor     

    8         Counseling                              31    Advocacy and Ombudsman
                                                                                                  SBA’s Marketing Office:
              Getting help to start up, market and          Watching out for small business
                                                                                                  The Small Business Resource Guide is published
              manage your business.                         interests.                            under the direction of SBA’s Office of Marketing and
                                                                                                  Customer Service.
              8     SBA Resource Partners
              10    SBA’s Online Tools and Training   32    Additional Resources                  Director of Marketing
              11    Reaching Underserved                    Taking care of start up logistics.    Paula Panissidi
                    Communities                             36 Business Organization:                    
              12    Are You Right for Small                      Choosing your Structure
                                                                                                  Editorial Content
                    Business Ownership?
              13    Writing a Business Plan           37    Other Assitance

                                                                                                  Graphic Design

    14        Capital
                                                      38    Lender Listing                        Gary
              Financing options to start or grow
              your business.                                                                      SBA’s participation in this publication is not an
              14 SBA Business Loans                                                               endorsement of the views, opinions, products or
                                                                                                  services of the contractor or any advertiser or other
              16 What to Take to the Lender                                                       participant appearing herein. All SBA programs
              21 Small Business Investment                                                        and services are extended to the public on a
                   Company Program                                                                nondiscriminatory basis.
              21 Small Business Innovation
                   Research Program                                                               Printed in the United States of America
              22 Small Business Technology
                                                                                                  While every reasonable effort has been made
                   Transfer Program                                                               to ensure that the information contained herein
              22 Surety Bond Guarantee                                                            was accurate as of the date of publication, the
                   Program                                                                        information is subject to change without notice.
              23 SBA Loan Program Chart                                                           Neither the contractor, the federal government,
                                                                                                  or agents thereof shall be held liable for any
                                                                                                  damages arising from the use of or reliance on the
    25        Feature: Meet the SBA 100                                                           information contained in this publication.

                                                                                                  SBA Publication # MCS-0018
    26        Contracting
                                                       “Everything you need to know
                                                                                                  This publication is provided under SBA Contract
              Applying for Government                                                             # SBAHQ11C0005.
              26 How Government Contracting                about setting up, marketing
              27 SBA Contracting Programs                  and managing the revenue of
              29 Getting Started in Contracting            your business.   ”

2 — Small Business Resource   INDIANA                                                                                         Visit us online:
                                              The U.S. Small Business Administration

                                             F R O M T H E ADM I NI STRATOR
                  Over the past two years, I’ve                                Americans own or work for a small business,
                  met dozens of entrepreneurs                                  and two of every three new jobs are created by
                  who used the tools in this                                   small businesses.
                  guide – information on capital,
                  contracts, counseling, and more                              In addition to the great information in this
                  – to build their companies and                               guide, check out our online tools. For example,
                  create thousands of good jobs.                               at you can type in your zip
                  You can read similar success                                 code and a few details about yourself and your
                  stories in the back of this issue                            business, and you’ll immediately get information
                  as part of the SBA 100, which                                on SBA resources and contacts in your local
we rolled out in August.                                                       area. Also, you can quickly get local permit
                                                                               and licensing information for various types of
Since the credit crisis hit in 2008, the SBA has                               businesses at
supported over $50 billion in lending to small
businesses through programs like 7(a) and 504,                                 America’s small businesses are gearing
our top two loan programs. During that same                                    up to expand and hire once again. Our
time, SBA counselors have helped more than 2                                   commitment at SBA and throughout the Obama
million entrepreneurs and small business owners                                Administration is to make sure they have the
through networks such as our Small Business                                    tools they need to stay on that path. Please
Development Centers, Women’s Business                                          feel free to contact your local SBA office if you
Centers, and our SCORE volunteers. And,                                        have any questions. We stand ready to help in
we’ve helped deliver nearly $100 billion each                                  whatever way we can.
year in federal contracts into the hands of small
business owners.                                                               Warm regards,

Today, we continue to empower America’s job
creators with highly-targeted programs and
initiatives aimed at helping both Main Street                                  Karen G. Mills
small businesses and high-growth small firms.                                  Administrator
This work is crucial, because half of working                                  Small Business Administration

    About the SBA
    Your Small Business Resource
   Every year, the U.S. Small Business Administration and its nationwide   	    •	Contracting
   network of partners help millions of potential and current small        	    •	Disaster	Assistance
   business owners start, grow and succeed.                                	    •	Advocacy	and	the	Ombudsman

   Resources and programs targeting small businesses provide an            Visit SBA online at for 24/7 access to small business
   advantage necessary to help small businesses compete effectively in     news, information and training for entrepreneurs.
   the marketplace and strengthen the overall U.S. economy.
                                                                           All SBA programs and services are provided on a nondiscriminatory
   SBA offers help in the following areas:                                 basis.
   	 •	Counseling
   	 •	Capital

4 — Small Business Resource   INDIANA                                                                                   Visit us online:
                                                    Message From The District Director

SBA Staff Listing                                                               Rules For Success
                                                                                Like today’s small businesses, large corporate success stories
                                                                                started with only an entrepreneur and a dream.
General Information       Lead Lender Relations
317-226-7272              Specialist
                          Stacey Poynter

Supervisory Economic      317-226-7272 ext. 122     Welcome to the 2012 SBA Indiana Small Business Guide
Development Specialist
Joyce Able                                                           he U. S. Small Business           The SBA Indiana District Office is located
317-226-7272 ext. 110     Luann Lieurance
                                                                     Administration (SBA) is           at 8500 Keystone Crossing, Suite 400,      317-226-7272 ext. 114
                                    an agency of the Federal          Indianapolis, Indiana. Our telephone number
Lead Economic                                                        government. Our mission is        is 317-226-7272. We invite you to schedule
Development Specialist  Peter Smith                                  to assist entrepreneurs with      a visit with our Economic Development
Martin Anderson         317-226-7272 ext. 119
                                                    starting and growing for-profit businesses. The    Specialists, our Women’s Business Ownership
317-226-7272 ext. 111                             creation of successful small businesses leads to   representative, or our Veteran Business
                        Business Opportunity        more employment and ultimately to expansion        Owners representative during the hours of
Ronda Crouch            Specialist                  of our economy.                                    8:00 a.m. - 4:30 p.m. ET, Monday through
317-226-7272 ext. 112   Vernice Mathis
                                                                                                       Friday.    317-226-7272 ext. 115
                    There are numerous opportunities available
Connie Secrest Street                               to small businesses. SBA encourages business       While you are at the SBA office, you can pick
317-226-7272 ext. 118   Public Information          loans through its guaranty programs for            up schedules of business seminars conducted  Officer
                                                    financial institutions. Loan guarantees are        by SBA or our Resource Partners, business
                        Sharon Murff
Paul Wyatt              317-226-7272 ext. 123       available to new and expanding businesses for      magazines, and lists of financial institutions
317-226-7272 ext. 120        a wide variety of purposes including purchase      participating in SBA guaranty lending. These                                  or construction of a building, for working         materials can also be mailed. And much
                        District Director
                                                    capital, equipment purchase, exporting, and        of the information is available through our
                        G. Gail Gesell
                        317-226-7272 ext. 140       even for buying a business. Ask your lender        website:
                       about SBA guaranteed loans.
                                                                                                       If you have a business question, contact the
                                                    SBA Indiana can assist business owners             Indiana District Office of the U. S. Small
                                                    seeking to sell products or services to Federal    Business Administration.
                                                    agencies. Federal contracting specialists
                                                    can share marketing tips and help identify         Sincerely,
                                                    agencies seeking vendors. SBA can guarantee
                                                    Surety Bonds - Ancillary, Bid, Performance,
                                                    or Payment Bonds - that may be required for
                                                    government contracting.
                                                                                                       G. Gail Gesell
                                                    Business counseling is available from SBA      District Director of
                                                    Resource Partners. This counseling is provided SBA’s Indiana District Office
                                                    at no charge from SBA sponsored groups
                                                    across Indiana. Our Resource Partners are the
                                                    Indiana Small Business Development Center
                                                    Network, our two Women’s Business Centers,
                                                    and our SCORE volunteers.

6 — Small Business Resource   INDIANA                                                                                        Visit us online:
                                                                                                             The SBA helps business
                                                                                                             owners grow and expand
   Doing Business in Indiana                                                                                 their businesses every day.

THE INDIANA DISTRICT OFFICE                                  SERVICES AVAILABLE                            Assistance to businesses owned and
The Indiana District Office is responsible                   Financial assistance for new or existing      controlled by socially and economically
for the delivery of SBA’s many programs                      businesses through guaranteed loans           disadvantaged individuals through the
and services. The District Director is G.                    made by area bank and non-bank                Business Development Program.
Gail Gesell. The District Office is located                  lenders.
at 8500 Keystone Crossing, Suite 400,                                                                      A Women’s Business Ownership
Indianapolis, IN. Office hours are from                      Free counseling, advice and information       Representative is available to assist
8:00 a.m. - 4:30 p.m., Monday through                        on starting, better operating or expanding    women business owners.
Friday.                                                      a small business through SCORE, Indiana
                                                             Small Business Development Centers            Special loan programs are available for
                                                             (ISBDC) and Women’s Business Centers          businesses involved in international
                                                             (WBC). They also conduct training             trade.
                                                             events throughout the district - some
DISTRICT OFFICE                                              require a nominal registration fee.           A Veterans Affairs Officer is available to
For program, financing or general                                                                          assist veterans and spouses.
information, please contact 317-226-7272
or e-mail:

                                  SUCCESS STORY                                                             We Welcome Your
                                  2011 SBA Indiana Small Business Person of the Year                        Questions
                                  Rick McKeel, President                                                    For extra copies of this publication or
                                  New Carbon Company, Inc.                                                  questions please contact:

                                                                                                            Indiana District Office
                                                                                                            8500 Keystone Crossing, Suite 400
 Rick McKeel is President and CEO of New                     featuring waffle cone and Panini grill         Indianapolis, IN 46240
 Carbon Company, Inc. New Carbon sells                       sandwich makers used by national soft
 Golden Malted Pancake and Waffle Flour                      serve franchises, like Dairy Queen. He         Tel: 317-226-7272 Fax: 317-226-7259
 to contracted distributors who supply                       led the company in acquisition of a major
 the foodservice industry. The company                       competitor.                                    Website:
 also manufactures commercial waffle
 bakers which are provided to customers in                   Sales increased from $12 million in 1998 to
 exchange for the exclusive use of Golden                    $34 million in 2010. New Carbon employs
 Malted products in the waffle bakers.                       74 full-time and two part-time employees.

 McKeel joined the company in 1992. His                      In addition to selling products to
 accomplishments in sales and service                        distributors in all 50 states and Puerto
 led to his promotion to President/                          Rico, the company exports to 16 countries.
 CEO of New Carbon Company, Inc. in                          Assistance for exporting was provided
 2002. Under McKeel’s leadership the                         by the North Central Small Business
 company launched a new business model                       Development Center.

Visit us online:                                                                                          INDIANA Small Business Resource —   7
                   Getting Help to Start Up, Market and Manage Your Business
                                                                                             and resources that can help you succeed
                                                                                             as a business owner. In fiscal year
                                                                                             2010, SCORE served over 400,000
                                                                                             clients through individual counseling,
                                                                                             workshops and online sessions by
                                                                                             leveraging the expertise and experience
                                                                                             of nearly 14,000 business mentors.
                                                                                             For 24/7 access to advice and online
                                                                                             webinars on topics such as starting,
                                                                                             growing, marketing and e-commerce for
                                                                                             small business, visit SCORE online at
                                                                                    or call 1-800-624-0245 for
                                                                                             the office nearest you.

                                                                                             Indiana SCORE Counseling Locations

            very year, the U.S. Small
            Business Administration
                                               SCORE                                         Anderson SCORE Chapter
                                                  SCORE is a national network of                  2701 Enterprise Dr., Ste. 202
            and its nationwide network                                                            Anderson, IN 46013
            of resource partners help          nearly14,000 entrepreneurs, business
            millions of potential and          leaders and executives who volunteer as
existing small business owners start,          mentors to America’s small businesses.             Branch:
grow and succeed.                              SCORE has helped more than 8.5                     Muncie                765-288-6681
   Whether your target market is global        million entrepreneurs nationwide by
                                               leveraging decades of expertise from
                                                                                             Bloomington SCORE Chapter
or just your neighborhood, the SBA and                                                            216 W. Allen St., Ste. 133
its resource partners can help at every        seasoned business professionals to                 Bloomington, IN 47403
stage of turning your entrepreneurial          help entrepreneurs start businesses,               812-339-4770
dream into a thriving business.                grow companies and create jobs in local
   If you’re just starting, the SBA and        communities.                                  South East Indiana SCORE
                                                  With more than 370 offices                      c/o Chamber of Commerce
its resources can help you with loans                                                             500 Franklin St.
and business management skills. If             throughout the country, SCORE
                                               matches you with a mentor whose                    Columbus, IN 47201
you’re already in business, you can use                                                           812-379-4457
the SBA’s resources to help manage             personality, experience, and skills
and expand your business, obtain               are a good fit for your business needs.       Elkhart SCORE
government contracts, recover from             Whether you are a start-up business                418 S. Main St.
disaster, find foreign markets, and            or growing company, SCORE mentors                  Elkhart, IN 46516
make your voice heard in the federal           offer free and confidential advice. As             574-293-1531 ext. 115
government.                                    members of your community, SCORE
                                               mentors understand local business             Evansville SCORE
   You can access SBA information                                                                 318 Main St., Ste. 223
online 24 hours a day at www.sba.              licensing rules, economic conditions
                                                                                                  Evansville, IN 47708
gov or visit one of our local offices for      and lending standards. SCORE also                  812-426-6144
assistance.                                    offers local small business workshops
                                               at modest fees on popular topics such         Fort Wayne SCORE
                                               as increasing sales, managing cash flow
                                                                                                  110 W. Berry St., Ste. LL101
                                               and marketing your business.                       Fort Wayne, IN 46802

PARTNERS                                          You can count on SCORE as a trusted             260-422-2601
                                               resource to offer in-depth mentoring,              Branches:
   In addition to our district offices which   sound advice and guidance, and tools               Angola                260-665-3512
serve every state and territory, SBA                                                              Kendallville          260-349-0250
works with a variety of local resource
partners to meet your small business
needs. These professionals can help                                                      • You get to be your own boss.
with writing a formal business plan,             ON THE UPSIDE                           • Hard work and long hours directly benefit you,
locating sources of financial assistance,                                                  rather than increasing profits for someone else.
managing and expanding your business,            It’s true, there are a lot of
finding opportunities to sell your goods         reasons not to start your               • Earnings and growth potential are unlimited.
or services to the government, and               own business. But for the
                                                 right person, the advantages            • Running a business will provide endless
recovering from disaster. To find your
                                                                                           variety, challenges and opportunities to learn.
local district office or SBA resource            of business ownership far
partner, visit           outweigh the risks.

8 — Small Business Resource   INDIANA                                                                                    Visit us online:
Indianapolis SCORE                         more than 30 years. It has become one of    the generation of business revenues, job
     8500 Keystone Crossing, Ste. 401      the largest professional small business     creation and job retention. This return
     Indianapolis, IN 46240                management and technical assistance         on investment is demonstrated by fiscal
     317-226-7264                          networks in the nation. With nearly         2010 outcomes, where SBDCs:
                                           900 locations across the country, SBDCs       • Assisted more than 13,600
     Branches:                                                                             entrepreneurs to start new businesses
     Avon                   317-745-2400   offer free one-on-one expert business
                                           advice and low-cost training by qualified       – an estimated 37 new business starts
     Noblesville            317-776-6324                                                   per day.
     Lafayette              765-742-4041   small business professionals to existing
                                                                                         • Provided counseling services to over
     Johnson County         317-715-1555   and future entrepreneurs.                       107,000 emerging entrepreneurs and
                                              The SBDC program includes special            nearly 102,000 existing businesses.
Marion/Grant Co. SCORE                     focus areas such as, green business           • Provided training services to
     215 S. Adams St.                      technology, disaster recovery and               approximately 380,000 clients.
     Marion, IN 46952
                                           preparedness, import and export                The efficacy of the SBDC program
                                           assistance, veterans assistance,            has been validated by a nationwide
South Central Indiana SCORE                electronic commerce, technology transfer    impact study. Of the clients surveyed,
     4102 Charlestown Rd.                  and regulatory compliance. A number         more than 80 percent reported that the
     New Albany, IN 47150                  of SBDC networks have specialized           business assistance they received from
     812-246-4328                          programs or centers dedicated to these      the SBDC counselor was worthwhile.
                                           focus areas.                                Similarly, more than 50 percent reported
South Bend SCORE                              During the past thirty years, through
     401 E. Colfax Ave., Ste. 120
                                                                                       that SBDC guidance was beneficial in
                                           a unique mix of federal, state and          making the decision to start a business.
     South Bend, IN 46617
     574-282-4350 ext. 4                   private sector resources, the SBDC          More than 40 percent of long-term
                                           program has increased its return on         clients, those receiving 5 hours or more
                                           investment. Through federal grants,
SMALL BUSINESS                             SBDCs in every state and territory
                                                                                       of counseling, reported an increase
                                                                                       in sales and 38 percent reported an
DEVELOPMENT CENTERS                        provide the foundation for the economic     increase in profit margins.
  The Small Business Development           growth of small businesses. These small        For information on the SBDC
Center (SBDC) program has been vital       businesses, in turn, advance local and      program, visit
to SBA’s entrepreneurial outreach for      regional economic development through


Visit us online:                                                                    INDIANA Small Business Resource —   9
Indiana Regional Small Business              training, coaching, mentoring and            executives participating in high-level
Development Centers                          other assistance geared toward women,        training and peer-networking sessions
                                             particularly those who are socially and      led by professional instructors and local
South Central ISBDC                          economically disadvantaged. WBCs             economic development organizations.
    501 N. Morton St., Ste. 106              are located in nearly every state and        Post-training, social and economic
    Bloomington, IN 47404                    U.S. territory and are partially funded      impact results from responding
                                             through a cooperative agreement with         executives who attended the 2008 –
                                             the SBA.                                     2010 training classes indicate:
RADIUS Indiana                                                                              • More than half of participating
    1504 I St.
                                                To meet the needs of women
                                             entrepreneurs, WBCs offer services               businesses reported an increase in
    Bedford, IN 47421                                                                         revenue, with an average revenue of
    317-234-2082                             at convenient times and locations,
                                             including weekends. Most WBCs are              • Participating businesses averaged
Southwestern ISBDC                           located at non-profit host organizations         $2 million in revenue, with new
    318 Main St., Ste. 401                   that offer a wide variety of services in         cumulative financing of $7.2 million
    Evansville, IN 47708                     addition to the services provided by the         secured in 2010.
    812-425-7232                             WBC. Many of the WBCs also offer               • Nearly half of the participants secured
                                             training and counseling and provide              federal, state, local and tribal contracts
Northeast ISBDC                              materials in different languages in              with a cumulative total of $287
    Hobson Center                            order to meet the diverse needs of the           million.
    4312 Hobson Rd., Ste. B                                                                 • Approximately half of the participants
                                             communities they serve.                          have hired new workers, creating 275
    Fort Wayne, IN 46815                        WBCs often deliver their services
    260-481-0500                                                                              new jobs in 2010.
                                             through long term training or group            • All participants were introduced and
Northwest ISBDC                              counseling, both of which have shown to          trained on becoming SBA 8(a) certified
    Purdue Technology Center                 be effective. WBC training courses are           firms; nearly 25 percent of respondents
    9800 Connecticut Dr.                     often free or are offered at a small fee.        are currently certified as SBA 8(a)
                                             Some centers will also offer scholarships        firms, while other participants
    Crown Point, IN 46307                                                                     reported a focused intention on
    219-644-3513                             based on the client’s needs
                                                                                              applying to the 8(a) program.
                                                While most WBCs are physically              • Nearly 50 percent of participating
Central ISBDC                                located in one designated location, a            respondents were female executives
    9301 E. 59th St., Rm. 147                number of WBCs also provide courses              and 70 percent were minority business
    Indianapolis, IN 46216                   and counseling via the Internet, mobile          executives.
    317-233-7232                             classrooms and satellite locations.            • 85 percent of responding executives
                                                WBCs have a track record of success.          were Satisfied or Very Satisfied with
Hoosier Heartland-Kokomo Office              In fiscal year 2010, the WBC program             the overall training series and results.
    700 E. Firmin St., Ste. 106              counseled and trained more than                 To find out more about this executive-
    Kokomo, IN 46902                         160,000 clients, creating local economic     level training opportunity, please
    765-454-7922 or 866-961-7232 Toll-Free   growth and vitality. Of the WBC clients      visit for host cities,
                                             that have received 3 or more hours of        training schedules, and selection
Southeastern ISBDC                           counseling, 15 percent indicated that        criteria.
    3000 Technology Ave., Ste. N2225
                                             the services led to hiring new staff, 34
                                                                                          SBA’S ONLINE TOOLS AND
    New Albany, IN 47150
    812-952-9765                             percent indicated that the services led

                                             to an increased profit margin, and 47
East Central ISBDC                           percent indicated that the services led to
    345 S. High St., 2nd Fl.                 an increase in sales.                          SBA’s Small Business Training
    Muncie, IN 47308                            In addition, the WBC program has          Network is a virtual campus complete
    765-282-9950 or 866-596-7232 Toll-Free   taken a lead in preparing women              with free online courses, workshops,
                                             business owners to apply for the             podcasts, learning tools and business-
North Central ISBDC                          Women-Owned Small Business
    401 E. Colfax Ave., Ste. 120                                                          readiness assessments.
                                             (WOSB) Federal Contract program              Key Features of the Small Business
    South Bend, IN 46617                     that authorizes contracting officers to
    574-282-4350 or 866-596-7232 Toll-Free                                                Training Network:
                                             set aside certain federal contracts for        Training is available anytime and
West Central ISBDC                           eligible women-owned small businesses        anywhere—all you need is a computer
    ISU College of Business                  or economically disadvantaged women-         with Internet access.
    800 Sycamore St., Rm. 510                owned small businesses. For more               • More than 30 free online courses and
    Terre Haute, IN 47809                    information on the program, visit                workshops available.
    812-237-7676 or 866-508-7232 Toll-Free                              • Templates and samples to get your
                                                To find the nearest SBA WBC, visit            business planning underway.
Hoosier Heartland ISBDC                                         • Online, interactive assessment tools
    Burton D. Morgan Center for                                                               are featured and used to direct clients
    1201 W. State St.                        EMERGING LEADERS                                 to appropriate training.
                                                                                            Course topics include a financial
    West Lafayette, IN 47907                    SBA’s Emerging Leaders initiative         primer keyed around SBA’s loan-
    765-496-6491 or 866-961-7232 Toll-Free   is currently hosted in 27 markets            guarantee programs, a course on
                                             across the country using a national          exporting, and courses for veterans
                                             demonstrated research-based
WOMEN’S BUSINESS CENTERS                     curriculum that supports the growth
                                                                                          and women seeking federal
                                                                                          contracting opportunities, as well as
   The SBA’s Women Business                  and development of small firms that          an online library of podcasts, business
Center (WBC) program is a network            have substantial potential for expansion     publications, templates and articles.
of approximately 110 community-              and community impact. A competitive            Find these free resources at
based centers which provide business         selection process results in firm  

10 — Small Business Resource   INDIANA                                                                          Visit us online:
                                  REACHING UNDERSERVED COMMUNITIES
   SBA also offers a number of programs
specifically designed to meet the needs
                                            CENTER FOR FAITH-BASED AND                  district office loan payment deferrals,
                                                                                        interest rate reductions and other relief
in the underserved communities.             NEIGHORHOOD PARTNERSHIPS                    after they receive their activation orders.
                                               Faith-based and Neighborhood             In addition, the SBA offers special
WOMEN BUSINESS OWNERS                       Partnerships know their communities,
                                            and they have earned their people’s
                                                                                        low-interest-rate financing to small
                                                                                        businesses when an owner or essential
   Women entrepreneurs are changing         trust. Because of their credibility,        employee is called to active duty. The
the face of America’s economy. In the       they are uniquely positioned to build       Military Reservist Economic Injury
1970s, women owned less than five           awareness of programs that encourage        Disaster Loan Program (MREIDL)
percent of the nation’s businesses.         entrepreneurship, economic growth and       provides loans up to $2 million to eligible
   Today, they are majority owners          job creation.                               small businesses to cover operating costs
of about a third of the nation’s small         SBA is committed to reaching             that cannot be met due to the loss of an
businesses and are at least equal owners    out to faith based and community            essential employee called to active duty
of about half of all small businesses.      organizations that are eligible to          in the Reserves or National Guard.
SBA serves women entrepreneurs              participate in the agency’s programs by       Among the SBA’s unique services for
nationwide through its various programs     informing their congregants, members        veterans are: an Entrepreneurship Boot
and services, some of which are designed    and neighbors about SBA’s programs.         Camp for Veterans with Disabilities in
especially for women.                       In particular, many faith-based and         partnership with 6 top U.S. universities
   The SBA’s Office of Women’s Business     community non-profit organizations          (, a program
Ownership (OWBO) serves as an               can provide a local financing option        to reach women veteran-entrepreneurs
advocate for women-owned businesses.        for entrepreneurs by becoming SBA           ( , and a program for
OWBO oversees a nationwide network          Microloan Intermediaries. An SBA            Reserve Component family members
of 110 women’s business centers that        Microloan Intermediary often acts as        called Operation Endure and Grow
provide business training, counseling       a bank for entrepreneurs and small          (
and mentoring geared specifically to        businesses that might otherwise be            For more information about small
women, especially those who are socially    unable to find access to capital.           business lending programs for veteran
and economically disadvantaged. The                                                     business owners and Reserve or
program is a public-private partnership
with locally-based nonprofits.
                                            VETERANS AND RESERVISTS                     Guard members who are activated,

   Women’s Business Centers serve           BUSINESS DEVELOPMENT                        including Patriot Express, microloans,
                                                                                        and Advantage loans, see the section
a wide variety of geographic areas,           To ensure that veterans, service-         on Access to Capital. To learn more
population densities, and economic          disabled veterans and Reserve and           about the Veterans Business Outreach
environments, including urban,              National Guard member entrepreneurs         program or find the nearest SBA VBOC,
suburban, and rural. Local economies        receive special consideration in all of     visit the SBA Web site at
vary from depressed to thriving, and        SBA’s entrepreneurial programs and
range from metropolitan areas to            resources, the SBA has established
                                                                                        NATIVE AMERICAN BUSINESS
entire states. Each Women’s Business        an Office of Veterans Business
Center tailors its services to the needs    Development (OVBD). Each year,
of its individual community, but all        OVBD reaches thousands of veterans,         DEVELOPMENT
offer a variety of innovative programs,     Reserve Component members,                     The SBA Office of Native American
often including courses in different        transitioning service members and           Affairs (ONAA) ensures American
languages. They provide training in         others who are – or who want to             Indians, Alaska Natives and Native
finance, management, marketing, and         become – entrepreneurs and small            Hawaiians seeking to create, develop
the Internet, as well as access to all of   business owners. OVBD develops and          and expand small businesses have
the SBA’s financial and procurement         distributes informational materials for     full access to the necessary business
assistance programs.                        entrepreneurship such as the Veterans       development and expansion tools
                                            Business Resource Guide, VETGazette,        available through the agency’s
Fort Wayne Women’s Bureau, Women’s          and Getting Veterans Back to Work. In       entrepreneurial development, lending,
Enterprise                                  addition, there are 16 Veterans Business    and contracting programs. ONAA
     2417 Fairfield Ave.                    Outreach Centers strategically located      provides a network of training (including
     Fort Wayne, IN 46807                   throughout the country that provide         the online tool “Small Business
     260-424-7977                           both online and in-person training,         Primer: Strategies for Growth”) and
                                            counseling, mentoring, workshops,           counseling services and engages in
Business Ownership Initiative of Indiana    referrals, and more. Each of the SBA’s
and the Central Indiana Women’s                                                         numerous outreach activities, such as
Business Center                             68 District Offices also has a designated   tribal consultations, development and
     4755 Kingsway Dr., Ste. 314            veteran’s business development officer.     distribution of educational materials,
     Indianapolis, IN 46205                   The SBA offers special assistance for     attendance and participation in
     317-917-3266                           small businesses owned by activated         economic development events and
                                            Reserve and National Guard members.         assisting these small businesses with
                                            Any self-employed Reserve or Guard          SBA programs.
                                            member with an existing SBA loan can           More information is at
                                            request from their SBA lender or SBA

Visit us online:                                                                    INDIANA Small Business Resource —   11
     Most new business owners who
  succeed have planned for every phase
                                                      own shoulders. Strong motivation
                                                      will help you survive slowdowns and
                                                                                                HOME-BASED BUSINESSES
                                                      periods of burnout.                          Going to work used to mean
  of their success. Thomas Edison, the
                                                    • How will the business affect              traveling from home to a plant, store or
  great American inventor, once said,
                                                      your family? The first few years of       office. Today, many people do some or
  “Genius is 1 percent inspiration and                                                          all their work at home.
                                                      business start-up can be hard on
  99 percent perspiration.” That same
                                                      family life. It’s important for family
  philosophy also applies to starting a               members to know what to expect            Getting Started
  business.                                           and for you to be able to trust that         Before diving headfirst into a home-
     First, you’ll need to generate a little          they will support you during this         based business, you must know why
  bit of perspiration deciding whether                time. There also may be financial         you are doing it. To succeed, your
  you’re the right type of person to start            difficulties until the business becomes   business must be based on something
  your own business.                                  profitable, which could take months       greater than a desire to be your
                                                      or years. You may have to adjust to a     own boss. You must plan and make
  IS ENTREPRENEURSHIP FOR                             lower standard of living or put family
                                                      assets at risk.
                                                                                                improvements and adjustments along
                                                                                                the road.
  YOU?                                              Once you’ve answered those                     Working under the same roof where
     There is simply no way to eliminate          questions, you should consider what           your family lives may not prove to be
  all the risks associated with starting          type of business you want to start.           as easy as it seems. One suggestion is
  a small business, but you can improve           Businesses can include franchises,            to set up a separate office in your home
  your chances of success with good               at-home businesses, online businesses,        to create a professional environment.
  planning, preparation, and insight.             brick-and-mortar stores or any                Ask yourself these questions:
  Start by evaluating your strengths              combination of those.                           • Can I switch from home
                                                                                                    responsibilities to business work
  and weaknesses as a potential owner                                                               easily?
  and manager of a small business.                FRANCHISING                                     • Do I have the self-discipline to
  Carefully consider each of the following                                                          maintain schedules while at home?
                                                     There are more than 3,000 business           • Can I deal with the isolation of
                                                  franchises. The challenge is to decide            working from home?
    • Are you a self-starter? It will be
      entirely up to you to develop projects,     on one that both interests you and is
      organize your time, and follow              a good investment. Many franchising           Legal Requirements
      through on details.                         experts suggest that you comparison              A home-based business is subject to
    • How well do you get along with              shop by looking at multiple franchise         many of the same laws and regulations
      different personalities? Business           opportunities before deciding on the          affecting other businesses.
      owners need to develop working              one that’s right for you.                     Some general areas include:
      relationships with a variety of                Some of the things you should                • Zoning regulations. If your business
      people including customers, vendors,        look at when evaluating a franchise:              operates in violation of them, you
      staff, bankers, employees, and              historical profitability, effective               could be fined or shut down.
      professionals such as lawyers,                                                              • Product restrictions. Certain
                                                  financial management and other
      accountants, or consultants. Can                                                              products cannot be produced in the
                                                  controls, a good image, integrity and             home. Most states outlaw home
      you deal with a demanding client,           commitment, and a successful industry.
      an unreliable vendor, or a cranky                                                             production of fireworks, drugs,
                                                     In the simplest form of franchising,           poisons, explosives, sanitary or
      receptionist if your business interests
                                                  while you own the business, its                   medical products and toys. Some
      demand it?
    • How good are you at making                  operation is governed by the terms of             states also prohibit home-based
      decisions? Small business owners are        the franchise agreement. For many,                businesses from making food, drink
      required to make decisions constantly       this is the chief benefit for franchising.        or clothing.
      – often quickly, independently, and         You are able to capitalize on a business         Be sure to consult an attorney and
      under pressure.                             format, trade name, trademark and/            your local and state departments
    • Do you have the physical and                or support system provided by the             of state, labor and health to find
      emotional stamina to run a                  franchisor. But you operate as an             out which laws and regulations will
      business? Business ownership can            independent contractor with the ability       affect your business. Additionally,
      be exciting, but it’s also a lot of work.   to make a profit or sustain a loss            check on registration and accounting
      Can you face six or seven 12–hour           commensurate with your ownership.             requirements needed to open your
      workdays every week?                           If you are concerned about starting        home-based business. You may need
    • How well do you plan and                    an independent business venture, then         a work certificate or license from the
      organize? Research indicates that
                                                  franchising may be an option for you.         state. Your business name may need
      poor planning is responsible for most
      business failures. Good organization
                                                  Remember that hard work, dedication           to be registered with the state. A
      — of financials, inventory, schedules,      and sacrifice are key elements in             separate business telephone and bank
      and production — can help you avoid         the success of any business venture,          account are good business practices.
      many pitfalls.                              including a franchise.                           Also remember, if you have
    • Is your drive strong enough?                   For more information visit                 employees you are responsible for
      Running a business can wear you                           withholding income and social-
      down emotionally. Some business                                                           security taxes, and for complying with
      owners burn out quickly from having                                                       minimum wage and employee health
      to carry all the responsibility for the                                                   and safety laws.
      success of their business on their

12 — Small Business Resource   INDIANA                                                                               Visit us online:

      After you’ve thought about what                                                                                               •
   type of business you want, the
   next step is to develop a business
   plan. Think of the business plan
   as a roadmap with milestones
   for the business. It begins as a
   pre-assessment tool to determine
   profitability and market share, then
   expands as an in-business assessment
   tool to determine success, obtain
   financing and determine repayment
   ability, among other factors.
      Creating a comprehensive business
   plan can be a long process, and you
   need good advice. The SBA and its
   resource partners, including Small
   Business Development Centers,
   Women’s Business Centers, Veterans
   Business Outreach Centers, and
   SCORE, have the expertise to help you
   craft a winning business plan. SBA
   also offers online templates to get you    Marketing                                      Provide projected income statements,
   started.                                    • Discuss the products and services
                                                                                             and balance sheets for a two-year
      In general, a good business plan           your company will offer.
   contains:                                   • Identify customer demand for your
                                                                                         •   Discuss your break-even point.
                                                 products and services.
   Introduction                                                                          •   Explain your personal balance sheet
                                               • Identify your market, its size and
      • Give a detailed description of the                                                   and method of compensation.
        business and its goals.                                                          •   Discuss who will maintain your
                                               • Explain how your products and
      • Discuss ownership of the business                                                    accounting records and how they will
                                                 services will be advertised and
        and its legal structure.                                                             be kept.
      • List the skills and experience you                                               •   Provide “what if” statements
                                               • Explain your pricing strategy.
        bring to the business.                                                               addressing alternative approaches to
      • Discuss the advantages you and your   Financial Management                           potential problems.
        business have over competitors.        • Develop an expected return on
                                                 investment and monthly cash flow for
                                                                                         • Explain how the business will be
                                                 the first year.
                                                                                           managed day-to-day.
                                                                                         • Discuss hiring and personnel
                                                                                         • Discuss insurance, lease or rent
                                                                                           agreements, and issues pertinent to
                                                                                           your business.
                                                                                         • Account for the equipment necessary
                                                                                           to produce your goods or services.
                                                                                         • Account for production and delivery
                                                                                           of products and services.

                                                                                        Concluding Statement
                                                                                           Summarize your business goals
                                                                                        and objectives and express your
                                                                                        commitment to the success of your
                                                                                        business. Once you have completed
                                                                                        your business plan, review it with
                                                                                        a friend or business associate and
                                                                                        professional business counselor
                                                                                        like SCORE, WBC or SBDC
                                                                                        representatives, SBA district office
                                                                                        business development specialists
                                                                                        or veterans business development
                                                                                           Remember, the business plan is a
                                                                                        flexible document that should change
                                                                                        as your business grows.

Visit us online:                                                                     INDIANA Small Business Resource —   13
                               Financing Options to Start or Grow Your Business
                                                                                              The SBA guaranty reduces the
                                                                                           lender’s risk of borrower non-payment.
                                                                                           If the borrower defaults, the lender
                                                                                           can request SBA to pay the lender that
                                                                                           percentage of the outstanding balance
                                                                                           guaranteed by SBA. This allows the
                                                                                           lender to recover a portion from SBA of
                                                                                           what it lent if the borrower can’t make
                                                                                           the payments. The borrower is still
                                                                                           obligated for the full amount.
                                                                                              To qualify for an SBA loan, a small
                                                                                           business must meet the lender’s
                                                                                           criteria and the 7(a) requirements. In
                                                                                           addition, the lender must certify that it
                                                                                           would not provide this loan under the

                                                                                           proposed terms and conditions unless
                                                                                           it can obtain an SBA guaranty. If the
              any entrepreneurs need         resources will be needed to accomplish
                                                                                           SBA is going to provide a lender with
              financial resources to start   the desired business purpose including
                                                                                           a guaranty, the applicant must be
              or expand a small business     the associated costs, the applicants’         eligible and creditworthy and the loan
              themselves and must            contribution, use of loan proceeds,           structured under conditions acceptable
              combine what they have         collateral, and, most important, an           to SBA.
with other sources of financing. These       explanation of how the business will
sources can include family and friends,      be able to repay the loan in a timely         Percentage of Guaranties and Loan
venture-capital financing, and business      manner.                                       Maximums
loans.                                          The lender will analyze the                   The SBA only guarantees a portion of
   This section of the Small Business        application to see if it meets the lender’s   any particular loan so each loan will also
Resource guide discusses SBA’s primary       criteria and SBA’s requirements. SBA          have an unguaranteed portion, giving
business loan and equity financing           will look to the lender to do much, if not    the lender a certain amount of exposure
programs. These are: the 7(a) Loan           all, of the analysis before it provides       and risk on each loan. The percentage
Program, the Certified Development           its guaranty on the lender’s loan. In         SBA guarantees depends on either the
Company or 504 Loan Program, the             the case of microlenders SBA loans            dollar amount or the program the lender
Microloan Program and the Small              these intermediaries funds at favorable       uses to obtain its guaranty. For loans of
Business Investment Company                  rates to re-lend to businesses with           $150,000 or less the SBA may guaranty
Program. The distinguishing features         financing needs up to $50,000. The            as much as 85 percent and for loans
for these programs are the total dollar      SBA’s business loan programs provide a        over $150,000 the SBA can provide a
amounts that can be borrowed, the type       key source of financing for viable small      guaranty of up to 75 percent.
of lenders who can provide these loans,      businesses that have real potential              The maximum 7(a) loan amount
the uses for the loan proceeds, and the      but cannot qualify for ong-term, stable       is $5 million. (Loans made under
terms placed on the borrower.                financing.                                    the SBAExpress program, which is
   Note: The SBA does not offer grants                                                     discussed later in this section, have a 50
to individual business owners to start or
grow a business.                             7(a) LOAN PROGRAM                             percent guaranty.)
                                                The 7(a) Loan program is the SBA’s         Interest Rates and Fees
SBA BUSINESS LOANS                           primary business loan program. It
                                             is the agency’s most frequently used
                                                                                             The actual interest rate for a 7(a)
                                                                                           loan guaranteed by SBA is negotiated
   If you are contemplating a business       non-disaster financial assistance             between the applicant and lender and
loan, familiarize yourself with the          program because of its flexibility in         subject to SBA maximums. Both fixed
SBA’s business loan programs to see          loan structure, variety of loan proceed       and variable interest rate structures
if they may be a viable option. Keep         uses, and availability. The program has       are available. The maximum rate is
in mind the dollar amount you seek to        broad eligibility requirements and credit     comprised of two parts, a base rate and
borrow and how you want to use the           criteria to accommodate a wide range of       an allowable spread. There are three
loan proceeds. The three principal           financing needs.                              acceptable base rates (Wall Street
players in most of these programs are           The business loans that SBA                Journal Prime*, London Interbank One
the applicant small business, the lender     guarantees do not come from the               Month Prime plus 3 percent, and an
and the SBA. SBA guarantees a portion        agency, but rather from banks and other       SBA Peg Rate). Lenders are allowed
of the loan (except for Microloans).         approved lenders. The loans are funded        to add an additional spread to the base
The business should have its business        by these organizations, and they make         rate to arrive at the final rate. For
plan prepared before it applies for a        the decisions to approve or not approve       loans with maturities of less than seven
loan. This plan should explain what          the applicants’ requests.                     years, the maximum spread will be no

14 — Small Business Resource   INDIANA                                                                          Visit us online:
more than 2.25 percent. For loans with        charge the borrower a prepayment fee            The SBA also cannot loan guaranties
maturities of seven years or more, the        if the loan has a maturity of 15 or more      to non-profit businesses, private clubs
maximum spread will be 2.75 percent.          years and is pre-paid during the first        that limit membership on a basis
The spread on loans under $50,000             three years.                                  other than capacity, businesses that
and loans processed through Express                                                         promote a religion, businesses owned by
procedures may be higher.                     Collateral                                    individuals incarcerated or on probation
   Loans guaranteed by SBA are                   The SBA expects every 7(a) loan to         or parole, municipalities, and situations
assessed a guaranty fee. This fee is          be fully secured, but the SBA will not        where the business or its owners
based on the loan’s maturity and the          decline a request to guaranty a loan if       previously failed to repay a federal loan
dollar amount guaranteed, not the             the only unfavorable factor is insufficient   or federally assisted financing.
total loan amount. The guaranty fee is        collateral, provided all available
generally paid by the borrower and can        collateral is offered. What these two         Use of Proceeds
be included in the loan proceeds.             policies mean is that every SBA loan             The third eligibility factor is use of
   On any loan with a maturity of one         is to be secured by all available assets      proceeds. 7(a) proceeds can be used
year or less, the fee is just 0.25 percent    (both business and personal) until the        to: purchase machinery; equipment;
of the guaranteed portion of the loan.        recovery value equals the loan amount         fixtures; supplies; make leasehold
On loans with maturities of more than         or until all assets have been pledged         improvements; as well as land and/or
one year, the normal guaranty fee is 2        to the extent that they are reasonably        buildings that will be occupied by the
percent of the SBA guaranteed portion         available. Personal guaranties are            business borrower.
on loans up to $150,000; 3 percent on         required from all the principal owners of     Proceeds can also be used to:
loans over $150,000 but not more than         the business. Liens on personal assets of       • Expand or renovate facilities;
$700,000; and 3.5 percent on loans over       the principals may be required.                 • Acquire machinery, equipment,
$700,000. There is also an additional                                                           furniture, fixtures and leasehold
fee of 0.25 percent on any guaranteed         Eligibility                                       improvements;
                                                 7(a) loan eligibility is based on four       • Finance receivables and augment
portion over $1 million.                                                                        working capital;
* All references to the prime rate refer      different factors. The first is size, as
                                              all loan recipients must be classified          • Finance seasonal lines of credit;
to the base rate in effect on the first                                                       • Acquire businesses;
                                              as “small” by SBA. The basic size
business day of the month the loan                                                            • Start up businesses;
                                              standards are outlined below. A more
application is received by SBA.                                                               • Construct commercial buildings; and
                                              in-depth listing of standards can be
                                                                                              • Refinance existing debt under certain
7(a) Loan Maturities                          found at                        conditions.
  SBA loan programs are generally             SBA Size Standards:                              SBA 7(a) loan proceeds cannot be used
intended to encourage longer term small         • Manufacturing — from 500 to no more       for the purpose of making investments.
business financing, but actual loan               than 1,500 employees                      SBA proceeds cannot be used to
maturities are based on the ability to          • Wholesaling — No more than 100            provide funds to any of the owners
repay, the purpose of the loan proceeds         • Services — from $4.5 million to no        of the business except for ordinary
and the useful life of the assets financed.       more than $35.5 million in average        compensation for actual services
However, maximum loan maturities                  annual receipts                           provided.
have been established: 25 years for real        • Retailing — from $7 million to no more
estate; up to 10 years for equipment              than $35.5 million in average annual      Miscellaneous Factors
(depending on the useful life of the            • General construction — from $7
                                                                                               The fourth factor involves a variety
equipment); and generally up to seven             million to no more than $33.5 million     of requirements such as SBA’s credit
years for working capital. Short-term             in average annual receipts                elsewhere test and utilization of
loans and revolving lines of credit are         • Agriculture — from $750,000 to no         personal assets requirements, where the
also available through the SBA to help            more than $17.5 million in average        business and its principal owners must
small businesses meet their short-term            annual receipts                           use their own resources before getting a
and cyclical working capital needs.             There is also an alternate size             loan guaranteed by SBA. It also includes
                                              standard that is based on a net worth         SBA’s anti-discrimination rules and
Structure                                     ($15 million or less) and average net         restrictions on lending to agricultural
   Most 7(a) loans are repaid with            income ($5 million or less). This new         enterprises because there are other
monthly payments of principal and             alternate makes more businesses eligible      agencies of the federal government with
interest. For fixed-rate loans the            for SBA loans and applies to all SBA          programs to fund such businesses.
payments stay the same, whereas               non-disaster loan programs.
                                                                                            Generally, SBA loans must meet the
for variable rate loans the lender can                                                      following criteria:
re-establish the payment amount               Nature of Business                              • Every loan must be for a sound
when the interest rates change or at             The second eligibility factor is based         business purpose;
other intervals, as negotiated with           on the nature of the business and the           • There must be sufficient invested
the borrower. Applicants can request          process by which it generates income or           equity in the business so it can operate

that the lender establish the loan with       the customers it serves. The SBA has              on a sound financial basis;
interest-only payments during the             general prohibitions against providing          • There must be a potential for long-
                                                                                                term success;
start-up and expansion phases (when           financial assistance to businesses              • The owners must be of good character
eligible) to allow the business time to       involved in such activities as lending,           and reputation; and
generate income before it starts making       speculating, passive investment,                • All loans must be so sound as to
full loan payments. Balloon payments          pyramid sales, loan packaging,                    reasonably assure repayment.
or call provisions are not allowed on any     presenting live performances of a               For more information, go to
7(a) loan. The lender may not charge a        prurient sexual nature, businesses  
prepayment penalty if the loan is paid        involved in gambling and any illegal
off before maturity, but the SBA will         activity.

Visit us online:                                                                        INDIANA Small Business Resource —   15
 What To Take To The Lender                                                                    SPECIAL PURPOSE 7(a) LOAN
    Documentation requirements may                  For the Standard, Certified and            PROGRAMS
  vary; contact your lender for the             Preferred methods, the applicant                  The 7(a) program is the most flexible
  information you must supply.                  fills out SBA Form 4, and the lender           of SBA’s lending programs. The agency
  Common requirements include the               completes SBA Form 4-1. When                   has created several variations to the
  following:                                    requests for guarantees are processed          basic 7(a) program to address the
     • Purpose of the loan                      using Express or Advantage methods,            particular financing need of certain
     • History of the business                  the applicant uses more of the regular         small businesses. These special purpose
     • Financial statements for three years     forms of the lender and just has a few         programs are not necessarily for all
       (existing businesses)
     • Schedule of term debts (existing         federal forms to complete. When SBA            businesses but may be very useful
       businesses)                              receives a request that is processed           to some small businesses. They are
     • Aging of accounts receivable and         through Standard or Certified                  generally governed by the same rules,
       payable (existing businesses)            Lender Program procedures, it either           regulations, fees, interest rates, etc. as
     • Projected opening-day balance sheet      reanalyzes or reviews the lender’s             the regular 7(a) loan guaranty. Lenders
       (new businesses)                         eligibility and credit analysis before         can advise you of any variations.
     • Lease details
     • Amount of investment in the business
                                                deciding to approve or reject. For
       by the owner(s)                          requests processed through Preferred           SBAExpress
     • Projections of income, expenses and      Lender Program or Express programs,               The SBAExpress guaranty is available
       cash flow as well as an explanation of   the lender is delegated the authority to       to lenders as a way to obtain a guaranty
       the assumptions used to develop these    make the credit decision without SBA’s         on smaller loans up to $350,000. (Note:
       projections                              concurrences, which helps expedite the         Through September 27, 2011,
     • Personal financial statements on the     processing time.                               this has increased to $1 million.)
       principal owners
     • Resume(s) of the principal owners and        In guaranteeing the loan, the SBA          The program authorizes selected,
       managers.                                assures the lender that, in the event the      experienced lenders to use mostly their
                                                borrower does not repay the loan, the          own forms, analysis and procedures
  How the 7(a) Program Works                    government will reimburse the lending          to process, service and liquidate SBA-
     Applicants submit their loan               institution for a portion of its loss. By      guaranteed loans. The SBA guarantees
  application to a lender for the initial       providing this guaranty, the SBA is            up to 50 percent of an SBAExpress loan.
  review. The lender will generally             able to help tens of thousands of small        Loans under $25,000 do not require
  review the credit merits of the request       businesses every year get financing            collateral. The use of loan proceeds is
  before deciding if they will make the         they might not otherwise obtain.               the same as for any basic 7(a) loan. Like
  loan themselves or if they will need an           After SBA approval, the lender             most 7(a) loans, maturities are usually
  SBA guaranty. If a guaranty is needed,        is notified that its loan has been             five to seven years for working capital
  the lender will also review eligibility.      guaranteed. The lender then will               and up to 25 years for real estate or
  The applicant should be prepared to           work with the applicant to make sure           equipment. Revolving lines of credit are
  complete some additional documents            the terms and conditions are met               allowed for a maximum of seven years.
  before the lender sends the request           before closing the loan, disbursing the
  for guaranty to the SBA. Applicants           funds, and assuming responsibility
  who feel they need more help with the
                                                                                               Patriot Express and Other Lending
                                                for collection and general servicing.          Programs For Veterans
  process should contact their local SBA        The borrower makes monthly loan
  district office or one of SBA’s resource                                                        The Patriot Express pilot loan
                                                payments directly to the lender. As with       initiative is for veterans and members
  partners for assistance.                      any loan, the borrower is responsible for
     There are several ways a lender                                                           of the military community wanting to
                                                repaying the full amount of the loan in        establish or expand a small business.
  can apply for a 7(a) guaranty from
                                                a timely manner.                               Eligible military community members
  SBA. The main differences between
  these methods are related to the                                                             include:
  documentation which the lender                What the SBA Looks for:                          • Veterans;
                                                  • Ability to repay the loan on time from       • Service-disabled veterans;
  provides, the amount of review which
                                                    the projected operating cash flow;           • Active-duty servicemembers eligible
  SBA conducts, the amount of the loan            • Owners and operators who are of good
  and the lender responsibilities in case                                                          for the military’s Transition Assistance
                                                    character;                                     Program;
  the loan defaults and the business’             • Feasible business plan;
  assets must be liquidated. The methods                                                         • Reservists and National Guard
                                                  • Management expertise and                       members;
  are                                               commitment necessary for success;
     • Standard 7(a) Guaranty                                                                    • Current spouses of any of the above,
                                                  • Sufficient funds, including the SBA            including any servicemember;
     • Certified Lender Program                     guaranteed loan, to operate the
     • Preferred Lender Program                                                                  • The widowed spouse of a
                                                    business on a sound financial basis            servicemember or veteran who died
     • Rural Lender Advantage                       (for new businesses, this includes the
     • SBA Express                                                                                 during service or of a service-connected
                                                    resources to meet start-up expenses            disability.
     • Patriot Express                              and the initial operating phase);
     • Export Express                                                                            The Patriot Express loan is offered
                                                  • Adequate equity invested in the
     • Small Loan Advantage                         business; and
                                                                                               by SBA’s nationwide network of
     • Community Advantage                        • Sufficient collateral to secure the loan   private lenders and features the fastest
                                                    or all available collateral if the loan    turnaround time for loan approvals.
                                                    cannot be fully secured.                   Loans are available up to $500,000 and
                                                                                               qualify for SBA’s maximum guaranty of

16 — Small Business Resource   INDIANA                                                                              Visit us online:
85 percent for loans of $150,000 or less      Reservist Economic Injury Disaster            More information on both programs is
and 75 percent for loans over $150,000        Loan program (MREIDL) to help cover         available at
up to $500,000. For loans above               operating costs due to the loss of an
$350,000, lenders are required to accept      essential employee called to active duty.   CAPLines
all available collateral.                                                                    The CAPLines program is designed
   The Patriot Express loan can be used       Advantage Loans                             to help small businesses meet their
for most business purposes, including            In early 2011, SBA rolled out two        short-term and cyclical working
start-up, expansion, equipment                Advantage loan initiatives aimed            capital needs. The programs can
purchases, working capital, and               at helping entrepreneurs and small          be used to finance seasonal working
                                                                                          capital needs; finance the direct costs
inventory or business-occupied real-          business owners in underserved
                                                                                          of performing certain construction,
estate purchases.                             communities gain access to capital.         service and supply contracts; finance the
   Patriot Express loans feature SBA’s        Both offer a streamlined loan application   direct cost associated with commercial
lowest interest rates for business loans,     process and the regular 7(a) loan           and residential construction; finance
generally 2.25 percent to 4.75 percent        guarantee for loans under $250,000.         operating capital by obtaining advances
over prime depending upon the size               The Small Loan Advantage program         against existing inventory and accounts
and maturity of the loan. Your local          is available to lenders participating in    receivable; and consolidate short-term
SBA district office will have a listing of    the Preferred Lenders Program. SBA          debt. SBA provides up to an 85 percent
Patriot Express lenders in your area.         lenders who are not participating in the    guarantee. There are five distinct loan
More information is available at              Preferred Lenders Program can contact       programs under the CAPLine umbrella:                   their local district office to apply.         • The Contract Loan Program is used
                                                                                              to finance material and labor needs
   Self-employed Reserve or Guard                The Community Advantage pilot
                                                                                              for a specific contract or contracts.
members with an existing SBA loan can         program opens up 7(a) lending to                Proceeds can be disbursed before the
request from their SBA lender or SBA          mission-focused, community-based                work begins. If used for one contract,
district office, loan payment deferrals,      lenders – such as Community                     it is generally not revolving; if used
interest rate reductions and other relief     Development Financial Institutions              for more than one contract at a time,
after they receive their activation orders.   (CDFIs), Certified Development                  it can be revolving. The loan maturity
The SBA also offers special low-interest-     Companies (CDCs), and microlenders              is usually based on the length of the
rate financing of up to $2 million when       – who provide technical assistance              contract, but no more than five years.
an owner or essential employee is called      and economic development support in             Contract payment must be sent directly
to active duty through the Military           underserved markets.                            to the lender.

Visit us online:                                                                      INDIANA Small Business Resource —   17
  • The Seasonal Line of Credit Program         single transactions or revolving lines          How to Apply
    is used to support buildup of inventory,    of credit. The maximum dollar amount                A small business exporter seeking a
    accounts receivable or labor and            of an export line of credit under this          guaranteed EWCP loan must apply to a
    materials above normal usage for            program is $5 million. SBA guarantees
    seasonal inventory. The business
                                                up to 90 percent of a loan amount or
    must have been in business for a            $ 4.5 million, whichever is less. Loan
    period of 12 months and must have a                                                         International Trade Loan Program
                                                maturities are generally for a term of 12          The SBA’s International Trade Loan
    definite established seasonal pattern.
                                                months. The guaranty can be reissued
    The loan may be used over again                                                             program (ITL) helps small businesses
                                                for an additional 12 months through a
    after a “clean-up” period of 30 days                                                        engaged or preparing to engage in
    to finance activity for a new season.
                                                new application process. The guaranty
                                                fee the SBA charges is 0.25 percent of          international trade as well as small
    These also may have a maturity of up                                                        businesses adversely affected by
    to five years. The business may not         the guaranteed amount of the loan for
                                                the initial 12 months. The borrower             competition from imports. This program
    have another seasonal line of credit
                                                negotiates the interest rate and all other      allows for a maximum loan amount of
    outstanding but may have other lines
    for non-seasonal working capital needs.     fees with the lender. The program offers        $5 million. The international trade
  • The Builders Line Program provides          flexible terms, low fees and a quick            loan provides an SBA guarantee up
    financing for small contractors or          processing time. For information, see           to $ 4.5 million for a term loan used
    developers to construct or rehabilitate                        for the acquisition, construction,
    residential or commercial property.                                                         renovation, modernization, improvement
    Loan maturity is generally three            Eligibility of Exporter                         or expansion of long-term fixed assets
    years but can be extended up to               You must have a business operating            or the refinancing of an existing loan
    five years, if necessary, to facilitate     history of at least one year – not              used for these same purposes. It may
    sale of the property. Proceeds are          necessarily in exporting. The SBA may           also be used for working capital or in
    used solely for direct expenses of
                                                waive this requirement if you have              conjunction with any SBA working
    acquisition, immediate construction
    and/or significant rehabilitation           sufficient export trade experience or           capital loans, including the EWCP. The
    of the residential or commercial            other managerial experience.                    SBA guaranty fee and interest rates are
    structures. The purchase of the land                                                        the same as for any standard 7(a) loans.
    can be included if it does not exceed 20    Eligibility of Foreign Buyers
    percent of the loan proceeds. Up to 5         The foreign buyer must be a                   Eligibility of Exporter
    percent of the proceeds can be used for     creditworthy entity and the methods of            • Applicants must meet the same
    physical improvements that benefit the      payment must be acceptable to the SBA               eligibility requirements for a 7(a) loan.
    property.                                   and the export lender.                            • Applicant must establish that the loan
  • The Small Asset-Based Line is a                                                                 will significantly expand or develop
    revolving line of credit (up to $200,000)   Use of EWCP Proceeds                                an export market, or the applicant
    that provides short term working              • To acquire inventory for export or to be        has been adversely affected by import
    capital. These lines are generally              used to manufacture goods for export.           competition, and, in addition, the
    used by businesses that provide credit        • To pay the manufacturing costs of               applicant must show that upgrading
    to their customers. Disbursements               goods for export.                               equipment or facilities will improve its
    are based on the size of a borrower’s         • To purchase goods or services for               competitive position.
    accounts receivable and/or inventory.           export.                                       • If eligibility is based on entering or
    Repayment comes from the collection           • To support standby letters of credit            expanding export sales, the applicant
    of accounts receivable or sale of               related to export transactions.                 must submit a one or two page
    inventory. It does require periodic           • For pre-shipment working capital                international business plan, including
    servicing and monitoring of the                 directly related to export orders.              sufficient information to reasonably
    collateral for which the lender can           • For post-shipment foreign accounts              support the likelihood of expanded
    charge up to two percent annually to            receivable financing.                           export sales.
    the borrower.
  • The Standard Asset-Based Line is
                                                Ineligible Use of Proceeds                      Use of Proceeds
    similar to the Small Asset-Based Line,                                                        • For facilities or equipment, including
                                                  • To support the applicant’s domestic
    but for loan amounts over $200,000.                                                             purchasing land and building(s);
    It does require stricter servicing and                                                          building new facilities; renovating,
                                                  • To acquire fixed assets or capital goods
    monitoring and the lender may pass                                                              improving, or expanding existing
                                                    for the applicant’s business.
    these costs along to the borrower.                                                              facilities; purchasing or reconditioning
                                                  • To support a sale where the exporter is
                                                    not taking title to the goods.                  machinery, equipment and fixtures;

EXPORT ASSISTANCE                                 • To acquire, equip, or rent commercial
                                                    space overseas.
                                                                                                    and making other improvements that
                                                                                                    will be used within the United States
  The SBA has several programs that               • To serve as a warranty letter of credit.        for producing goods or services.
help existing small businesses wanting                                                            • Refinancing a facility/building is also
to export goods and services. A brief           Collateral Requirements                             permissible if the original loan on the
description of each can be found below.                                                             property could have been refinanced
                                                  • Collateral for the manufacturing sector
                                                                                                    under regular 7(a).
                                                    typically consists of a first lien on all
Export Working Capital Program                      export-related inventory and export
  The SBA’s Export Working Capital                  related accounts receivable.                Collateral Requirements
program (EWCP) assists lenders in                 • Collateral for the service sector           See pg. 15 for collateral requirements.
meeting the needs of exporters seeking              typically consists of assignment of
short-term export working capital.                  proceeds of export-related contracts
This program enables U.S. exporters                 or purchase orders and a first lien on
to obtain loans to fund their direct                export-related accounts receivable.
export costs. The EWCP supports                   • Other collateral may be required.

18 — Small Business Resource   INDIANA                                                                                Visit us online:
How to Apply                                  necessarily in exporting. The SBA may              for export related purposes;
   A small business exporter seeking a        waive this requirement if you have               • Provide term loans and other financing
                                              sufficient export trade experience or              to enable small business concerns,
guaranteed loan must apply to an SBA                                                             including small business export
participating lender. Call your local SBA     other managerial experience.
                                                                                                 trading companies to develop foreign
District Office for a list of participating                                                      markets; and
                                              Eligibility of Foreign Buyers
lenders.                                                                                       • Acquire, construct, renovate,
                                                The foreign buyer must be a                      modernize, improve or expand
                                              creditworthy entity and the methods of
Export Express                                payment must be acceptable to the SBA
                                                                                                 production facilities or equipment to be
   The Export Express program is                                                                 used in the U.S. in the production of
                                              and the export lender.                             goods or services to be exported from
designed to help SBA meet the export
                                                                                                 the U.S.
financing needs of small businesses. It       Use of Proceeds
is subject to the same loan processing,        • Finance standby letters of credit used      Ineligible Use of Proceeds
making, closing, servicing, and                  for either bid or performance bonds;          Proceeds may not be used to finance
liquidation requirements as well as the        • Finance export development activities       overseas operations, other than those
same maturity terms, interest rates, and         such as export marketing and
                                                                                             strictly associated with the marketing
applicable fees as for other SBA loans           promotional activities, participation
                                                                                             and/or distribution of products/services
except as noted below. The total Export          in foreign trade shows, translation of
                                                 product literature for foreign markets,     exported from the U.S.
Express loan cannot exceed $500,000.
SBA guarantees 90 percent for loans              and other activities designed to initiate
                                                 or expand the applicant’s export of its     How to Apply
of $350,000 and under and 75 percent                                                           The application process is the same for
                                                 products/services from the U.S.;
for loans greater than $350,000 up to          • Provide transaction-specific financing      the SBAExpress, except the applicant
the maximum of $500,000. SBA allows              for overseas orders;                        must demonstrate that loan proceeds
participating lenders to make their own        • Provide revolving lines of credit for       will enable it to enter a new export
credit decisions. SBA provides a quick           export purposes, the terms of which         market or expand an existing export
processing time, less than 36 hours.             must not exceed seven years. In             market. The applicant must submit to
                                                 some instances, as a normal course
                                                                                             the lender a plan that includes projected
Eligibility of Exporter                          of business, the borrower may use
                                                                                             export sales for the upcoming year as
  You must have a business operating             portions of revolving lines of credit for
                                                 domestic purposes, but no less than 70      well as the dollar volume of export sales
history of at least one year – not
                                                 percent of the revolving line to be used    for the previous year.

Visit us online:                                                                         INDIANA Small Business Resource —   19
U.S. Export Assistance Center                 production. Projects eligible for up to        SBA INDIANA CERTIFIED DEVELOPMENT
(USEAC)                                       $5.5 million under one of these two            COMPANIES
   U.S. Export Assistance Centers are         requirements do not have to meet the              CDCs can lend throughout Indiana
                                              job creation or retention requirement, so
a network of facilities around the U.S.                                                      Business Development Corporation
                                              long as the CDC portfolio average is at
staffed by SBA, U.S. Department of                                                              218 W. Washington St., 10th Fl.
                                              least $65,000.
Commerce and the Export-Import Bank             • Eligible project costs are limited
                                                                                                South Bend, IN 46601
of the U.S. to provide trade promotion                                                          574-288-5758
                                                  to long-term, fixed assets such as
and export-finance assistance for small           land and building (occupied by the
businesses in a single location. The                                                         Capital Access Corporation-Kentucky
                                                  borrower) and substantial machinery
                                                                                                401 W. Main St., Ste. 2010
USEACs also work closely with other               and equipment. Working capital is not
                                                                                                Louisville, KY 40202
federal, state and local international            an eligible use of proceeds.
trade organizations. To find the nearest        • Most borrowers are required to make
USEAC, go to                  an injection (borrower contribution)
                                                                                             Community Development Corporation
                                                  of just 10 percent which allows
                                                                                             of Northeast Indiana
John O’Gara                                       the business to conserve valuable
                                                                                                200 E. Berry St., Ste. 320
    Regional Manager,                             operating capital. A further injection
                                                                                                Fort Wayne, IN 46802
    International Trade Programs                  of 5 percent is needed if the business
    U.S. Export Assistance Center                 is a start-up or new (less than 2
                                                  years old), and a further injection of 5
    8109 E. Jefferson Ave., Ste. 110                                                         County Corp Development
    Detroit, MI 48214                             percent is also required if the primary
                                                                                                130 W. Second St., Ste. 1420
    313-226-3670 • 313-226-3657 Fax               collateral will be a single purpose
                                                                                                Dayton, OH 45402                            building.
                                                • Two-tiered project financing: A lender
                                                  finances approximately 50 percent of
CERTIFIED DEVELOPMENT                             the project cost and receives a first
                                                                                             Horizon Certified Development Company
                                                                                                1776 Mentor Ave.
COMPANY LOAN PROGRAM                              lien on the project assets (but no SBA
                                                  guaranty); A CDC (backed by a 100
                                                                                                Cincinnati, OH 45212
(504 LOANS)                                       percent SBA-guaranteed debenture)

   The 504 Loan program is an economic            finances up to 40 percent of the project
                                                                                             Indiana Statewide Certified Development
development program that supports                 costs secured with a junior lien. The
American small business growth and                borrower provides the balance of the
                                                                                                4181 E. 96th St., Ste. 200
                                                  project costs.
helps communities through business                                                              Indianapolis, IN 46240
                                                • Fixed interest rate on SBA loan. SBA
expansion and job creation. This SBA                                                            317-844-9810
                                                  guarantees the debenture 100 percent.
program provides long-term, fixed-                Debentures are sold in pools monthly
rate, subordinate mortgage financing                                                         Premier Capital Corporation
                                                  to private investors. This low, fixed
for acquisition and/or renovation of                                                            151 N. Delaware St., Ste. 175
                                                  rate is then passed on to the borrower
capital assets including land, buildings                                                        Indianapolis, IN 46204
                                                  and establishes the basis for the loan
and equipment. Some refinancing is                                                              317-974-0504
also permitted. Most for-profit small           • All project-related costs can be
businesses are eligible for this program.                                                    Regional Development Company
                                                  financed, including acquisition (land
                                                                                                1757 Thornapple Cir.
The types of businesses excluded from             and building, land and construction of
                                                                                                Valparaiso, IN 46385
7(a) loans (listed previously) are also           building, renovations, machinery and
excluded from the 504 loan program.               equipment) and soft costs, such as title
   Loans are provided through Certified           insurance and appraisals. Some closing
                                                                                             Small Business Growth Corporation
Development Companies. CDCs work                  costs may be financed.
                                                                                                2401 W. White Oaks Dr.
with banks and other lenders to make            • Collateral is typically a subordinate
                                                                                                Springfield, IL 62704
loans in first position on reasonable             lien on the assets financed; allows
terms, helping lenders retain growing             other assets to be free of liens and
customers and provide Community                   available to secure other needed
                                                                                             West Central Partnership, Inc.
Redevelopment Act credit.                         financing.
                                                                                                915 W. Market St., Ste. C
                                                • Long-term real estate loans are up to
   The SBA 504 loan is distinguished                                                            Lima, OH 45801
                                                  20-year term, heavy equipment 10- or
from the SBA 7(a) loan program in these           20-year term and are self-amortizing.
                                              Businesses that receive 504 loans are:
The maximum debenture, or long-term
loan, is:
                                                • Small — net worth under $15 million,       MICROLOAN PROGRAM
                                                  net profit after taxes under $5 million,      The Microloan program provides
  • $5 million for businesses that create a
                                                  or meet other SBA size standards.          small loans ranging from under $500
    certain number of jobs or improve the
    local economy;                              • Organized for-profit.                      to $50,000 to women, low-income,
  • $5 million for businesses that meet a       • Most types of business — retail,           minority, veteran, and other small
    specific public policy goal, including        service, wholesale or manufacturing.
                                                                                             business owners through a network
    veterans; and                                The SBA’s 504 certified development
                                                                                             of approximately 160 intermediaries
  • $5.5 million for manufacturers and        companies serve their communities by
                                              financing business expansion needs.            nationwide. Under this program, the
    energy public policy projects.
                                              Their professional staffs work directly        SBA makes funds available to nonprofit
  Recent additions to the program allow
                                              with borrowers to tailor a financing           intermediaries that, in turn, make the
$5.5 million for each project that reduces
                                              package that meets program guidelines          small loans directly to entrepreneurs,
the borrower’s energy consumption by
at least 10 percent; and $5.5 million for     and the credit capacity of the borrower’s      including veterans. Proceeds can be
each project that generates renewable         business. For information, visit               used for typical business purposes such
energy fuels, such as biodiesel or ethanol                               as working capital, or the purchase of

20 — Small Business Resource   INDIANA                                                                              Visit us online:
furniture, fixtures, machinery, supplies,          program provides funding for a broad               in the U.S. or be a for-profit business
equipment, and inventory. Microloans               range of industries. Some SBICs invest             concern that is at least 51 percent
may not be used for the purchase of real           in a particular field or industry while            owned and controlled by another
estate. Interest rates are negotiated              others invest more generally. For more             for-profit business concern that is at
                                                   information, visit                least 51 percent owned and controlled
between the borrower and the
                                                                                                      by one or more individuals who are
intermediary. The maximum term for a                                                                  citizens of, or permanent resident
microloan is 7 years.
   The program also provides business
                                                   SMALL BUSINESS                                     aliens in, the U.S.

                                                   INNOVATION RESEARCH
                                                                                                    • Be for-profit.
based training and technical assistance                                                             • Principal researcher must be employed

to microborrowers and potential                                                                       by the small business.
microborrowers to help them be                                                                      • Company size cannot exceed 500
successful at starting or growing their              The Small Business Innovation                    employees.
businesses. Such training and technical            Research (SBIR) program encourages                For more information on the SBIR
assistance may include general business            small businesses to advance their               Program visit
education, assistance with business                technical potential from funds
planning industry-specific training,               committed by federal agencies with large        Participating Agencies
and other types of training support.               extramural research and development               Each year, the following eleven
Entrepreneurs and small business                   budgets. The SBIR program serves                federal departments and agencies are
owners interested in small amounts                 to fund the critical startup and                required to reserve 2.5 percent of their
of business financing should contact               development stages for a technology and         extramural R&D funds for award to
the nearest SBA District Office for                encourages commercialization of the             small businesses through the SBIR
information about the nearest Microloan            technology, product or service. In turn,        program: Departments of Agriculture;
Program Intermediary Lender or go to               this stimulates the U.S. economy.               Commerce; Defense; Education; Energy; microloans.
                                                                                                   Health and Human Services; Homeland
                                                   SBIR Requirements
SBA INDIANA MICROLOAN PROGRAM                                                                      Security; Transportation; Environmental
                                                      Small businesses must meet the
                                                                                                   Protection Agency; National Aeronautics
                                                   following eligibility criteria to participate
Flagship Enterprise                                                                                and Space Administration; and National
                                                   in the SBIR program.
     2701 Enterprise Dr.                             • Be 51 percent owned and controlled by
                                                                                                   Science Foundation.
     Anderson, IN                                      one or more individuals who are U.S.
     765-622-0800                                      citizens or permanent resident aliens
     Serves: Delaware, Grant, Hamilton, Hancock,
     Henry, Madison, Marion, Rush, Shelby and
     Tipton counties.

The SEED Corp.
     501 N. Morton St., Ste. 100
     Bloomington, IN
     Serves: Bartholomew, Brown, Decatur,
     Greene, Jackson, Jennings, Lawrence,
     Monroe, Morgan and Owen counties.

   There are a variety of alternatives to
bank financing for small businesses. The
Small Business Investment Company
(SBIC) program fills the gap between
the availability of private capital and
the needs of small businesses for growth
capital. Licensed and regulated by the
SBA, SBICs are privately owned and
managed investment funds that make
capital available to qualifying U.S.
small businesses at attractive rates.
The funds raise private capital and
can receive SBA-guaranteed leverage
up to 3x private capital paid-in, with
a leverage ceiling of $150 million per
SBIC and $225 million for two or more
licenses under common control. Licensed
SBICs are for-profit investment firms
whose incentive is to share in the
success of a small business. The SBIC

Visit us online:                                                                              INDIANA Small Business Resource —   21
SMALL BUSINESS                                  Participating Agencies
                                                   Each year the following five Federal
                                                                                           SBA SURETY BOND GUARANTEE
TECHNOLOGY TRANSFER                             departments and agencies are required         Participating surety companies that work
                                                                                              with Indiana businesses include:
PROGRAM                                         by STTR to reserve 0.3 percent of their
                                                extramural R&D funds for award to          A.I. King Insurance Agency, Inc.
   The Small Business Technology                small business/nonprofit research             8604 Allisonville Rd., Ste. 210
Transfer (STTR) program reserves                institution partnerships: Department          Indianapolis, IN 46250
a specific percentage of federal R&D            of Defense; Department of Energy;             317-841-6004
funding for award to small business and         Department of Health and Human                Contact: Al King
non-profit research institution partners.       Services; National Aeronautics and
Central to the program is expansion of          Space Administration; and National         Construction Capital Incorporated (CCI)
the public/private sector partnership to                                                      1710 N. Douglas Dr., Ste. 110
                                                Science Foundation.
include the joint venture opportunities                                                       Golden Valley, MN 55422
for small business and the nation’s
premier nonprofit research institutions.        SURETY BOND GUARANTEE                         Contact: Donald Zalk

Small business has long been where
innovation and innovators thrive, but
                                                PROGRAM                                    Costin-Hubert Insurance, Inc.
                                                                                              7202 N. Shadeland Ave., Ste. 222
                                                   The Surety Bond Guarantee program
the risk and expense of conducting                                                            Indianapolis, IN 46250-2031
                                                is a public-private partnership between       317-570-7072
serious R&D efforts can be beyond
                                                the federal government and surety             Contact: Cheryl Begle
the means of many small businesses.
                                                companies to provide small businesses
Non-profit research laboratories
                                                with the bonding assistance necessary      Fletcher Place Insurance
are also instrumental in developing                                                           P.O. Box 1062
                                                for them to compete for public and
high-tech innovations, but frequently                                                         Indianapolis, IN 46206
                                                private contracting and subcontracting
innovation is confined to the theoretical.                                                    317-523-0607
                                                opportunities. The guarantee provides
STTR combines the strengths of both                                                           Contact: Bob West
                                                all incentive for sureties to bond small
entities by introducing entrepreneurial
                                                businesses that would otherwise be         Gregory Wright Insurance
skills to high-tech research efforts.
                                                unable to obtain bonding. The program         2255 Fox Hill Dr.
The technologies and products are
                                                is aimed at small businesses that lack        Indianapolis, IN 46228
transferred from the laboratory to the
                                                the working capital or performance            317-908-4899
marketplace. The small business profits                                                       Contact: Greg Wright
                                                track record necessary to secure bonding
from the commercialization, which, in
                                                on a reasonable basis through regular
turn, stimulates the U.S. economy.                                                         J.M. Wilson Corporation
                                                commercial channels.                          650 E. Carmel Dr.
STTR Requirements                                  Through this program, the SBA              Carmel, IN 46082
   Small businesses must meet the               guarantees bid, payment, performance          317-571-7700 or 800-538-4796
following eligibility criteria to participate   and ancillary bonds issued by surety          Contact: Steve Kuykendall or Robyn
in the STTR program.                            companies for individual contracts and        Shepherd
  • Be 51 percent owned and controlled by       subcontracts up to $2 million. The
    one or more individuals who are U.S.        SBA reimburses sureties between 70         Keith Mathews Agency
                                                and 90 percent of losses sustained if a       8766 South St., Ste. 210
    citizens or permanent resident aliens
                                                                                              Fishers, IN 46038
    in the U.S.                                 contractor defaults on the contract.          317-841-9988
  • Be for-profit.                                 The SBA has two program options            Contact: Keith Mathews
  • Principal researcher need not be            available, the Prior Approval Program
    employed by the small business.             (Plan A) and the Preferred Surety Bond     Pillar Group Risk Management
  • Company size cannot exceed 500
                                                Program (Plan B). In the Prior Approval       301 Pennsylvania Pkwy., Ste. 100
    employees. (No size limit for nonprofit                                                   Indianapolis, IN 46280
    research institution).
                                                Program, SBA guarantees 90 percent
                                                of surety’s paid losses and expenses on       317-853-3702
The nonprofit research institution                                                            Contact: Jason McEldowney
partner must also meet certain                  bonded contracts up to $100,000, and on
eligibility criteria:                           bonded contracts greater than $100,000     Rahvy R. Murray Agency
  • Be located in the United States and be      that are awarded to socially and              5460 Lafayette Rd., Ste. C
    one of the following:                       economically disadvantaged concerns,          Indianapolis, IN 46254
  • Nonprofit college or university.            HUBZone contractors, and veterans, and        317-536-1550
  • Domestic nonprofit research                 service-disabled veteran owned small          Contact: Rahvy Murray
    organization.                               businesses. All other bonds guaranteed
  • Federally funded R&D center.                in the Plan A Program receive an 80
                                                percent guarantee. Sureties must obtain
                                                SBA’s prior approval for each bond
                                                guarantee issued. Under Plan B, SBA
                                                guarantees 70 percent, but sureties may
                                                issue, monitor and service bonds without
                                                SBA’s prior approval.

22 — Small Business Resource   INDIANA                                                                            Visit us online:
                                  U.S. Small Business Administration Loan Programs, Page A
                                    Information accurate as of 12/01/2011 • All SBA programs and services are provided on a nondiscriminatory basis.

                                                                7(a) Loan Program
    Program              Maximum                Use of                                    Maximum                                     Who Qualifies                   Benefit to
                          Amount              Proceeds                Maturity          Interest Rate            Structure                                           Borrowers
Standard 7(a): $5 million to any Expansion/renovation; Depends on use of               SBA sets a           Term loan with one      Must be for-profit        Business able to
Applicant applies one business,        new construction,        proceeds and ability   maximum rate         payment of principal    and meet SBA size         obtain financing which
for business loan including affiliates purchase land or         to repay. Generally    for both variable    and interest (P&I)      standards; show           otherwise would not be
to lender; Lender                      buildings; purchase      working capital and    and fixed rate       each month. Interest    good character,           provided due to term,
applies to SBA                         equipment,               machinery &            loans (discuss       variable or fixed       credit, management,       collateral, equity, and/or
for guaranty of                        fixtures, lease-hold     equipment loans        with lender or       as negotiated with      and ability to repay;     time in business. Fixed
their proposed                         improvements;            have 5-10 years;       local SBA District   lender. Cannot be       must be an eligible       maturity; No balloons;
loan if they                           working capital;         real estate is up      Office for current   revolving. SBA          type of business,         No prepayment penalty
determine it is                        inventory, business      to 25 years. Term      information).        charges a Guaranty      use proceeds for          if maturity under 15
necessary. Loan                        acquisition, start-ups negotiated with                               Fee **                  eligible purpose, and     years. Establish or
from lender, not                       and refinancing under lender.                                                                demonstrate that          re-affirm business
SBA.                                   certain conditions                                                                           credit is not otherwise   relationship with a
                                       (discuss with lender).                                                                       available.                lender.
 International     Same as             Acquire, renovate,        Same as               Same as              Same as Standard        Same as Standard          Same as Standard
 Trade: Long term Standard 7(a).       modernize facilities      Standard 7(a).        Standard 7(a).       7(a). Maximum SBA       7(a) plus businesses      7(a) plus long-term
 financing to help                     or equipment used in                                                 guaranty amount for     must be engaged or        financing for fixed
 businesses                            making products or                                                   working capital is $4   preparing to engage       assets used
 engaged in                            services to be exported,                                             million.                in international          to produce products
 exporting or                          plus permanent working                                                                       trade or adversely        or services for export.
 adversely                             capital and refinance                                                                        affected by
 impacted by                           debt not structured with                                                                     competition from
 imports.                              reasonable terms.                                                                            imports.

Export Working Same as                Short-term,               Generally one year,    Established          Short term revolving    Same as Standard          Same as Standard
Capital Program: Standard 7(a).       working-capital for       but can be up to       by lender. No        line of credit based    7(a) plus must            7(a) plus provides
Single transaction                    exporters. Can be         3 years to match       SBA established      on borrowing            have been in              working capital to
or Revolving                          single transaction or     a single transaction   maximums.            base or export          business for at           American Exporters
Working Capital                       revolving. Standby        cycle.                                      purchase orders.        least one year and        to perform on export
lines of credit for                   Letters of Credit for                                                 Monthly interest        preparing to engage       transactions and/
exporters.                            export purposes.                                                      payments; principal     in or increase            or finance export
                                                                                                            payments based on       international trade.      receivables. Ability to
                                                                                                            collection of foreign                             finance standby letters
                                                                                                            receivables.                                      of credit for export
CAPLines:          Same as            Finances: seasonal      Up to 10 years.          Same as              Revolving line of       Same as Standard          Same as Standard 7(a)
Four different     Standard 7(a).     working capital needs,                           Standard 7(a).       credit with monthly     7(a) plus a               plus provides revolving
Revolving Lines                       direct cost to                                                        interest and            business that needs       working capital not
of Credit,                            perform assignable                                                    principal payments      the specialized           otherwise available
a/k/a Seasonal,                       contracts, construction                                               based on when the       proceeds this             to perform on an
Contract Builders,                    costs of structure for                                                business receives       program offers.           assignable contract, to
Working Capital                       resale, or advances                                                   the cash for doing                                cover seasonal needs,
                                      against existing                                                      the activity the loan                             to build or renovate
                                      inventory and                                                         proceeds financed.                                personal or commercial
                                      receivables.                                                                                                            space, and to obtain
                                                                                                                                                              funds against existing
                                                                                                                                                              current assets. Also
                                                                                                                                                              structured to meet
                                                                                                                                                              business needs.
SBAExpress: $350,000.                 Same as a Standard        Same as Standard Loans $350,000             Same as Standard Same as                          Same as Standard
Lender approves                       7(a) or may be used       7(a) for term loans, or less:               7(a) except lender Standard 7(a).                 7(a) plus Streamlined
the loan.                             for a revolving working   Revolving lines of Prime + 6.5%.            has more leeway to                                process; Easy-to-use
                                      capital line of credit.   credit up to 7 years.                       structure repayment                               line of credit and allows
                                                                                      Loans over            under their own                                   for a revolving feature
                                                                                      $50,000:              rules.                                            which Standard 7(a)
                                                                                      Prime + 4.5%.                                                           does not.

   ** The SBA charges the lender a guaranty fee based on the loan’s maturity and the dollar amount which is initially guaranteed.
     The lender can pass this expense to the borrower and loan proceeds can be used to reimburse the lender.
     The following chart explains the Agency’s guaranty fee charges

Visit us online:                                                                                                           INDIANA Small Business Resource —         23
U.S. Small Business Administration Loan Programs, Page B                                                                                                                                  Information accurate as of 12/01/2011

                                                                                     7(a) Loans, continued
                        Maximum                        Use of                                                       Maximum                                                                           Benefit to
   Program               Amount                       Proceeds                           Maturity                 Interest Rate                    Structure                  Who Qualifies           Borrowers
Export Express: $500,000.                      Same as SBA Express Same as                                        Same as                       Same as                      Same as SBA          Same as SBA
Lender approves                                plus can be used     SBA Express.                                  SBA Express.                  SBA Express.                 express plus loan Express plus provides
the loan.                                      for Standby Letters                                                                                                           proceeds must be lenders with a higher
                                               of Credit for Export                                                                                                          used to support      percentage guaranty
                                               Purposes. Debt                                                                                                                export development which can encourage
                                               Refinance is not                                                                                                              activity.            them to make more
                                               allowed.                                                                                                                                           loans to finance export
                                                                                                                                                                                                  development activities
                                                                                                                                                                                                  of small businesses.
                                                                                                                                                                                                  Standby Letters
                                                                                                                                                                                                  of Credit are also
Patriot Express: $500,000.                      Same as                             Same as                        Same as                      Same as                      Same as Standard Same as SBA
Lender approves                                 Standard 7(a).                      Standard 7(a).                 Standard 7(a).               SBA Express.                 7(a) plus must be    Express plus provides
the loan.                                                                                                                                                                    owned & controlled lenders with a higher
                                                                                                                                                                             by one or more of    percentage of guaranty
                                                                                                                                                                             the following groups which can encourage
                                                                                                                                                                             equaling at least    them to make more
                                                                                                                                                                             51% total ownership: loans to qualified
                                                                                                                                                                             veteran, active-duty businesses.
                                                                                                                                                                             military, reservist
                                                                                                                                                                             or National Guard
                                                                                                                                                                             member or spouse of
                                                                                                                                                                             any of these groups,
                                                                                                                                                                             or widowed spouse
                                                                                                                                                                             of service member
                                                                                                                                                                             or veteran who died
                                                                                                                                                                             during service or of
                                                                                                                                                                             service connected
Community         $250,000.                    Same as Standard 7(a) Same as                                      Same as                      Allows mission-                Loan eligibility                Borrowers in
Advantage:                                     except cannot be used Standard 7(a).                               Standard 7(a)                oriented lenders               requirements are                underserved markets
Alternative                                    to refinance loans                                                 except allowable             focused on                     same as for                     get more choices on
Lenders assisting                              made by or guaranteed                                              “Spread” is + 4%             economic                       Standard 7(a) loans,            the types of lenders
businesses                                     by the Dept. of                                                    over the base                development                    but the business                who can provide
located in areas                               Agriculture or loans                                               rate.                        in underserved                 should be located               them financing if their
with high needs.                               by SBA Micro-Lenders                                                                            markets to apply for           in an underserved               financing needs an
                                               using their SBA                                                                                 7(a) guaranty on               market .                        SBA guaranty and the
                                               intermediary loan.                                                                              loan they propose to                                           technical assistance
                                                                                                                                               make to an eligible                                            needs of the applicant
                                                                                                                                               small business.                                                are assessed by the

                                                                                        Non 7(a) Loans
504 Loans:        SBA portion up to            For the acquisition of Either 10 or 20 year                        Check with local Financing from                            For profit businesses            Fees under 3 percent;
Fixed Asset       $5.0 million.                long-term fixed-assets, term on the SBA/                           SBA District        1. The CDC                             that do not exceed               long-term fixed rate;
Project Financing                              refinancing long term CDC portion.                                 Office for current     Certified                           $15.0 million in                 low down payment;
provided from                                  fixed asset debt under                                             information.           Development                         tangible net worth               full amortization; no
three sources.                                 certain conditions, and                                                                   Company                             and do not have an               balloons.
                                               working capital on a                                                                   2. Third Party                         average net income
                                               limited basis.                                                                            Lenders                             over $5 million for the
                                                                                                                                      3. Applicant                           past 2 years.
 Micro-Loans          $50,000 total            Furniture, fixtures,               Shortest term                   Check with local Loans through                              Same as 7(a) – plus             Direct loans from
                      to one small             supplies, inventory,               possible, not to                SBA District Office non- profit lending                     loans can be made               nonprofit intermediary
                      business                 equipment, and                     exceed 6 years.                 for locations of    organizations;                          to non-profit day               lenders; Fixed-rate
                      borrower.                working capital.                                                   locally available technical assistance                      care businesses.                financing; Very
                                                                                                                  intermediary        also provided.                                                          small loan amounts;
                                                                                                                  lenders and then                                                                            Technical assistance
                                                                                                                  check with them.                                                                            available.
                                Gross Size of Loan                                                               Fees                                                                                     Notes
7(a) Guaranty                   Loans of $150,000 or less (See Note 1)........................ ........2% of guaranteed portion, Lender is authorized to retain..............Maturities that exceed 12 months
                                $150,001 to $700,000 ...................................................... ......3% of guaranteed portion.................................................................Maturities that exceed 12 months
Fee Reference                   $700,001 to $5,000,000 (See Note 2) ............................ ......3.5% of guaranteed portion up to $1,000,000 PLUS 3.75% of.....Maturities that exceed 12 months
    Chart                                                                                                         the guaranteed portion over $1,000,000
                                Short Term Loans – up to $5 million ......................................0.25% of the guaranteed portion .....................................................Maturities of 12 months or less
NOTE 1: The guaranty fee on a $100,000 loan with an 85% guaranty would be 2% of $85,000 or $1,700, of which the lender would retain $425.
NOTE 2: The guaranty fee on a $2,000,000 loan with a 75% guaranty ($1.5 million guaranteed portion) would be, 3.5% of $1,000,000 ($35,000) PLUS 3.75% of $500,000 ($18,750), for a total of $53,750

24 — Small Business Resource         INDIANA                                                                                                                                                          Visit us online:
The U.S. Small Business Administration provides           The SBA 100 isn’t just businesses that have received
small businesses with the tools and the resources         SBA loans. In 1985, Qualcomm was a small
they need to grow and create jobs. This includes          company proving R&D to the federal government,
access to capital, opportunities in government            but not for long. In 1989, the company received
contracting, and counseling and training—otherwise        funding from the Small Business Innovation
known as the “Three C’s” of capital, contracting, and     Research (SBIR) program to hire engineers and begin
counseling. Since its inception in 1953, the SBA has      developing microchips. This funding gave them
used the Three C’s to help millions of businesses,        the freedom to innovate, explore, and transition
from shops on Main Street to high-growth, high-           from contract research to consumer applications. In
impact firms.                                             twenty years, Qualcomm has gone from 35 people
                                                          to a global workforce of 16,000 employees. The chip
In August, 2011, the SBA announced the SBA 100.           department initially funded by the SBIR program
These one hundred businesses all used SBA products        now makes up two-thirds of the company’s revenue.
to grow, and since then, each one has created at least
one hundred jobs—no small feat for a small business.      There are also businesses that have benefited
You can find them at                     from SBA’s support for small business contracting.
                                                          Missouri’s World Wide Technology (WWT) enrolled
The SBA 100 is a cross section of the diverse array       in SBA’s 8(a) Business Development program in
of businesses that stand to benefit from SBA              1992. The 8(a) program gave the company the
products. Some of the businesses in the SBA 100           tools it needed to compete for and win government
have grown to become household names. Others              contracts. Now, WWT has over 1,300 employees in
may not be familiar, but they are still cornerstones      48 states and six countries, and its sales exceed
of their communities and drivers of job creation.         $68 million.
There are businesses in a variety of industries, from
construction, to food and beverage, to manufacturing.     The fact is, the SBA has something to offer, no
There are Main Street businesses—the shops and            matter what kind of support you need or what kind
restaurants that we visit every day—as well as high-      of business you own. Whether you’re just starting
growth, high-impact firms that are transforming our       out, or you have been in business for decades, the
economy. Each business received SBA support, in           SBA can help you take your business to the next
the form of capital, contracting, or counseling, before   level. If you own a restaurant on Main Street, you
going on to create at least 100 jobs.                     can get a loan to expand. If you own a high-growth
                                                          firm, you can get the investment capital you need. If
A few businesses in the SBA 100 worked with               you are looking to get into government contracting,
the SBA decades ago. For example, Columbia                SBA can help you get started. And for every
Sportswear used an SBA loan in 1970 to increase           business, SBA counselors are standing by to help you
its production capacity. At the time, it had forty        along the way.
employees. Today Columbia Sportswear has over
3,000 employees and generates over $1 billion dollars     This Resource Guide is a great place to learn
in revenue. Hard work and a little help from the          more. In here, you can find details on all of SBA’s
SBA has made Columbia Sportswear into a global            programs, from loans and capital, to contracting and
leader in outdoor apparel.                                counseling. You can also find SBA online at
                                                 SBA recently revamped its website,
Meanwhile, one of the youngest companies in the           making the information and resources you need
SBA 100 is the Boathouse at Rockett’s Landing in          much easier to find. Meanwhile, the SBA online

Richmond, Virginia. Owner Kevin Healy got an SBA          Community, which you can find at
7(a) loan in 2009 to renovate an old power plant on, puts the advice of thousands
the James River to open up his second restaurant.         of small business owners like you at your fingertips.
He said the process was “quick, easy and painless         You can also visit to find your
and done within approximately 60 days.” His               SBA district office or local resource partner.
business has been growing steadily for the past two
years, and the Boathouse at Rockett’s Landing now         Thanks for reading, and we’ll see you soon.
employs over 100 people.

Visit us online:                                                       INDIANA Small Business Resource —   25
                                         Applying for Government Contracts
                                                                                           from at least two responsible small
                                                                                           businesses, and if awards will be made
                                                                                           at fair market prices, the acquisition
                                                                                           is reserved for exclusively for small
                                                                                           business. Reasonable expectations of
                                                                                           small business competition may be
                                                                                           evaluated using past acquisition history
                                                                                           of an item or similar items.
                                                                                              There are several exceptions and
                                                                                           unique rules for specific kinds of small
                                                                                           businesses and industries. For R&D
                                                                                           small business set-asides, there must be
                                                                                           reasonable expectation of obtaining from
   The U.S. government is the largest        The business with the best proposal in
                                                                                           small businesses the best scientific and
single purchaser of goods and services       terms of technical content, price and
                                                                                           technological sources consistent with the
in the world, buying everything from         other factors generally wins the contract.
                                                                                           demands of the proposed acquisition.
armored tanks to paper clips. Every
                                             Types of Contracts                            For small business set-asides other
year, the federal government awards
                                                Firm fixed price contracts place the       than for construction services, any
more than $500 billion in contracts, and
                                             responsibility for the costs and risk of      business proposing to furnish a product
a significant share of those contracts are
                                             loss on the contractor. Firm fixed price      that it did not itself manufacture must
specifically allotted to small businesses.
                                             contracts do not permit any adjustment        furnish the product of a small business
   The SBA works with agencies
                                             on the basis of the contractor’s costs        manufacturer unless the SBA has
to award at least 23 percent of all                                                        granted either a waiver or exception to
prime government contracts to small          during the performance of the contract.
                                             This type of contract is used in all sealed   this requirement. In industries where
businesses, with specific statutory goals                                                  the SBA finds that there are no small
for small disadvantaged businesses,          bid and some negotiated procurements.
                                                Cost reimbursement contracts provide       business manufacturers, it may issue
businesses that are women-owned                                                            a waiver to the non-manufacturer rule.
or service-disabled veteran-owned,           for the payment of allowable costs
                                             incurred by the contractor, to the extent     Waivers permit small businesses to
or businesses that are located in                                                          provide any domestic firm’s product.
historically underutilized business zones    stated in the contract. The contract
(HUBZone).                                   establishes a ceiling price, above which
                                             a contractor may not exceed without the
   The agency ensures that small                                                              Subcontracting opportunities are
businesses have access to long-lasting       approval of the contracting officer. Cost
                                                                                           a great resource for small businesses,
development opportunities, which             reimbursement contracts are used in
                                                                                           especially to those not ready to bid as
means working with small businesses          research contracts that have commercial
                                                                                           prime contractors. Experience gained
to help them stay competitive, as            applicability.
                                                                                           from subcontracting with a federal
well as encouraging federal agencies            Some contracts do not fit neatly
                                                                                           prime contractor can better prepare
to award more contracts to small             into these two categories, such as
                                                                                           businesses to bid for prime contracts.
businesses. The SBA features outreach        time and material contracts (prices for
                                                                                              Current regulations stipulate for
programs, matchmaking events, and            hourly wages are fixed but the hours
                                                                                           contracts offering subcontracting
online training opportunities; and helps     are estimated) and letter contracts
                                                                                           opportunities over $650,000 for goods
agencies identify opportunities for small    (authorizes a contractor to begin work
                                                                                           and services, or $1.5 million for
businesses.                                  on an urgent requirement).
                                                                                           construction, large business prime
                                             Small Business Set-Asides                     contractors must offer maximum
HOW GOVERNMENT                                  A “set-aside” for small businesses         practicable subcontracting opportunities
                                                                                           to small businesses. Large business
CONTRACTING WORKS                            reserves an acquisition exclusively for
                                             small business participation. There           prime contractors must submit a
Sealed bidding vs. Negotiation               are two ways in which set-asides can          subcontracting plan describing how they
   There are two methods the                 be determined. First, if an acquisition       will successfully subcontract to small
government uses to purchase goods            of goods or services has an anticipated       businesses.
and services, sealed bidding and             dollar value of at least $3,000 but not          To find subcontracting opportunities,
negotiation. The first method, sealed        exceeding $150,000, it is automatically       a list of Federal prime contractors is
bidding, involves issuing an invitation      reserved for small businesses. The            available through SBA’s Subcontracting
for bid by a procuring agency. Under         acquisition will be set aside only if the     Directory at and www.
the sealed bidding method, a contract        contracting officer determines there Research the list of prime
is usually awarded to the lowest priced      are two or more responsible small             contractors and determine which are
bidder that can meet the quantity,           businesses that are competitive in            best suited for your business. Develop
quality and delivery requirements of         terms of market prices, quality and           a marketing strategy, and then contact
the procurement. The second method,          delivery. Second, if an acquisition of        the Small Business Liaison Officer
negotiation, involves issuing a request      goods or services is more than $150,000,      listed for each prime to schedule an
for proposal or request for quotation.       and if it’s likely offers will be obtained    appointment.

26 — Small Business Resource   INDIANA                                                                         Visit us online:
                                                                                                   in a primary residence at a place for
                                                                                                   at least 180 days, or as a currently
  What You Should Know About Your Business                                                         registered voter, and with intent to live
                                                                                                   there indefinitely.
      To be eligible to bid on a federal        3. Do you fall under a specific                  SBA is responsible for:
   contract, you must know your                                                                  • Determining whether or not individual
                                                                                                   concerns are qualified HUBZone small
   business. Answer the following three            Under the umbrella of “small
                                                                                                   business concerns;
   questions:                                   business,” SBA has outlined several              • Maintaining a list of qualified
   1. Are you a small business?                 specific certifications that businesses            HUBZone small business concerns
      Is your small business:                   may fall under. These certifications are           for use by acquisition agencies in
      • Organized for profit?                   divided into two categories:                       awarding contracts under the program;
      • Located in the U.S.?                    SBA-Certified and Self-Certified.                • Adjudicating protests and appeals
      • Operated primarily within the U.S.         The SBA-Certified Programs were                 of eligibility to receive HUBZone
        or making a significant contribution    created to assist specific businesses              contracts.
        to the U.S. economy through             in securing federal contracts and                For additional information, visit
        payment of taxes or use of American     therefore can only be issued by SBA  
        products, materials, or labor?          administrators. For the Self-Certified
      • Independently owned and operated?       Programs, you can determine for
      • Not dominant in the field of            yourself if your business meets the            8(a) BUSINESS DEVELOPMENT
        operation in which it is bidding for
        government contracts?
                                                requirements by referring to the
                                                Federal Acquisition Regulations (FAR).
      • A sole proprietorship, partnership,                                                       The 8(a) Business Development
                                                   Just as Congress has given
        corporation, or any other legal form?                                                  program is a nine year program
                                                federal agencies a goal of procuring
      If the first six criteria apply to your                                                  established to assist eligible socially and
                                                23 percent of federal contracts from
   business, ask yourself the second                                                           economically disadvantaged individuals
                                                small businesses, so too must federal
   important question to find out if                                                           develop and grow their businesses.
                                                agencies meet specific contracting goals
   your business meets size standard
                                                for other categories of small firms.           Business development assistance
                                                These goals are:                               includes one-to-one counseling, training
   2. What is the size standard for your
                                                  • 5 percent of contracts go to Small         workshops, and other management and
                                                    Disadvantaged Businesses                   technical guidance. There is a statutory
      Size standards are used to                  • 5 percent go to Women-Owned Small
   determine whether a business is small                                                       requirement that small disadvantaged
                                                    Businesses                                 business concerns be awarded not less
   or “other than small.” Size standards          • 3 percent go to Service-Disabled
   vary depending upon the industry. To                                                        than 5 percent of the total value of all
                                                    Veteran-Owned Small Businesses
   determine the size standard for your           • 3 percent go to HUBZone Small              prime contract awards. All firms that
   business, you will need a NAICS code.            Businesses                                 become eligible for SBA’s 8(a) business
   Every federal agency uses these codes           Federal agencies have a strong              development assistance are also
   when considering your business. To           incentive to fulfill these contracting         considered small disadvantaged business
   determine your NAICS code, go to             goals. You should apply for those              concerns for federal contracting.               SBA-Certified and Self-Certified               To be eligible for the 8(a) Business
      Some SBA programs require their           programs for which you qualify to take         Development program, a business must
   own unique size standards. To find out       advantage of contracting opportunities.        meet the following criteria:
   more about these requirements and                                                             • It must be a small business by SBA
   other size standard information, go to                                                          size standards;                                                                             • It must be owned (at least 51 percent)
                                                                                                   by one or more individuals who

SBA CONTRACTING                                 (except those that are tribally-owned)
                                                must meet the following criteria:
                                                                                                   qualify as socially and economically
                                                                                                   disadvantaged, and who are US
PROGRAMS                                         •        It must be a small business by
                                                SBA size standards
                                                                                                   citizens of good character;
                                                                                                 • It must be controlled, managed, and
HUBZONE                                            • It must be owned and controlled at            operated by one or more individuals
                                                                                                   who qualify as disadvantaged, and;
   The HUBZone program helps small                   least 51 percent by U.S. citizens, or a
                                                     Community Development Corporation,          • It must demonstrate potential for
businesses located in distressed urban                                                             success (generally by being in business
                                                     an agricultural cooperative, or an
and rural communities, known as                      Indian tribe                                  for at least two full years) before
Historically Underutilized Business                                                                applying.
                                                   • Its principal office must be located
Zones, gain access to federal set-aside              within a “Historically Underutilized         Socially disadvantaged individuals
contracts and sole source contracts, as              Business Zone,” which includes lands      are those who have been subjected to
well as a price evaluation preference                considered “Indian Country” and           racial or ethnic prejudice or cultural
in full and open contract competitions.              military facilities closed by the Base    bias because of their identity as a
There is a statutory requirement that                Realignment and Closure Act               member of a group without regard
HUBZone small business concerns be                 • At least 35 percent of its employees      to their individual capabilities. The
                                                     must reside in a HUBZone.                 following individuals are presumed
awarded not less than 3 percent of the
                                                     Existing businesses that choose to        to be socially disadvantaged: Black
total value of all prime contract awards.            move to qualified areas are eligible
The HUBZone program also establishes                                                           Americans, Native Americans, Alaska
                                                     to apply for certification. To fulfill
preference for award of federal contracts                                                      Natives or Native Hawaiians, Hispanic
                                                     the requirement that 35 percent of
to small businesses in these areas. To               a HUBZone firm’s employees reside
                                                                                               Americans, Asian Pacific Americans,
qualify for the program, a business                  in a HUBZone, employees must live         and Subcontinent Asian Americans. An

Visit us online:                                                                           INDIANA Small Business Resource —   27
                                                                                          WOMEN-OWNED SMALL
                                                                                          BUSINESS FEDERAL CONTRACT
                                                                                             On October 7, 2010, the SBA
                                                                                          published a final rule effective February
                                                                                          4, 2011, aimed at expanding federal
                                                                                          contracting opportunities for women-
                                                                                          owned small businesses. The Women-
                                                                                          Owned Small Business Federal Contract
                                                                                          program authorizes contracting officers
                                                                                          to set aside certain federal contracts for
                                                                                          eligible women-owned businesses and
                                                                                          economically disadvantaged women-
                                                                                          owned small businesses.
                                                                                             To be eligible, a firm must be at least
                                                                                          51 percent owned or controlled by one
individual who is not a member of one of     establish a subcontracting goal for SDBs     or more women. The women must be
these groups must establish individual       in their Subcontracting Plans.               U.S. citizens. The firm must be “small”
social disadvantage by a preponderance          Firms self-certify as SDB without         in its primary industry in accordance
of evidence. Economically disadvantaged      submitting any application to SBA;           with SBA’s size standards for that
individuals are socially disadvantaged       however, firms approved by SBA into          industry. To be deemed “economically
individuals whose ability to compete         the 8(a) Business Development program        disadvantaged” its owners must
in the free-enterprise system has been       are automatically certified as an SDB.       demonstrate economic disadvantage in
impaired due to diminished capital           To self-certify, firms should update their   accordance with the requirements set
and credit opportunities as compared         CCR profiles and update their ORCA           forth in the final rule. For additional
to others in the same or similar             profiles, making sure that both profiles
line of business who are not socially                                                     information, visit www.sba.govwosb.
                                             reflect their SDB status.
   Firms owned by Alaska Native
Corporations, Indian Tribes, Native          SERVICE-DISABLED VETERAN-                     2011 SBA Indiana Small
Hawaiian Organizations, and                  OWNED SMALL BUSINESS                          Business Week Award
Community Development Corporations              The Service-Disabled Veteran-
can also apply to the SBA for 8(a)           Owned Small Business (SDVOSB)                 Winners
business development assistance.             program has a federal government-wide
   So that approved firms can obtain         goal of awarding at least 3 percent           Indiana Small Business Person
training, counseling, and business           of prime and subcontracting dollars           of the Year
development assistance, SBA designates       to Service-Disabled Veteran-Owned                 Rick McKeel
a staff person at a local SBA District       Small Businesses each year. Large                 New Carbon Company, Inc.
Office, geographically near the business.    prime contractors must also establish a           South Bend, IN
SBA is responsible for                       subcontracting goal for Veteran-
  • Determining whether a business           Owned Small Businesses in their               Indiana Small Business Exporter
    qualifies for the 8(a) Business
                                             Subcontracting Plans. These                   of the Year
    Development program
  • Determining whether a business           subcontracting goals are reviewed at              Lee Milazzo
    continues to qualify, during the nine-   time of proposal by both the contracting          PERM Machine & Tool Company, Inc.
    year term.                               officer and SBA prior to the award of a           St. John, IN
  • Approving Mentor/Protégé agreements      contract.
    between 8(a) firms and large                The SDVOSB Protest is administered         Women in Business Champion
    businesses.                              by SBA to ensure that only businesses             Jennifer Sturges
  For additional information, visit          owned by service-disabled veterans
                                                                                               Greensburg, IN                              receive contracts reserved exclusively
                                             for them. When a business’s SDVOSB
                                                                                           Financial Services Champion
SMALL DISADVANTAGED                          self-certification is challenged, SBA
                                                                                               Dawn DeRidder
BUSINESS                                     determines if the business meets
                                             the status, ownership, and control                M&I Bank
   A Small Disadvantaged Business            requirements.                                     Indianapolis, IN
(SDB) is defined as a small business            To determine your eligibility,
that is at least 51 percent owned and        contact your local veterans business          2011 SBA Indiana MED Week
controlled by one or more individuals        development officer, visit the                Minority Small Business Person
who are socially and economically            various program websites, or contact          of the Year and Region V Winner
disadvantaged.                               SBA’s Office of Veterans Business                 Clyde D. Harris II
   There is a federal government-wide        Development at                  Diverse Staffing Services, Inc.
goal of awarding at least 5 percent of                                                         Indianapolis, IN
prime contracting dollars to SDBs each
year. Large prime contractors must also

28 — Small Business Resource   INDIANA                                                                            Visit us online:
  Once you have identified the                       database for prospective vendors. The             of government. Businesses interested in
important information regarding your                 CCR is at                            becoming GSA schedule contractors
business, it is time to start the process of          After completing registration, you will          should review the information available
procuring a government contract.                   be asked to enter your small business               at
   1. Identify your DUNS (Data Universal           profile information through the SBA                 8. Make Sure Your Business is
   Numbering System) number                        Supplemental Page. The information                  Financially Sound
   To register your business, obtain a DUNS        will be displayed in the Dynamic Small              This critical step is absolutely necessary
   number used to identify and track               Business Search.                                    to make sure that your business is
   millions of businesses. You can obtain             Creating a profile in CCR and keeping            financially prepared for the journey
                                                                                                       ahead. Even if you are able to obtain a
   your free DUNS number when                      it current ensures your firm has access
   registering with the CCR (Central                                                                   government contract, you will not be
                                                   to federal contracting opportunities.
   Contractor Registration) at                                                             receiving all of the money at once. It
                                                   Entering your small business profile,               helps to have a clear plan of how your
   or by contacting Dun & Bradstreet at            including your business information and                                                                                        business will stage the benefits of the
                                                   key word description, allows contracting            contract.
   2. Identify your EIN                            officers, prime contractors, and buyers
   (Employer Identification Number)                                                                    9. Search FedBizOpps for contracting
                                                   from state and local governments to                 opportunities
   An EIN, otherwise known as a federal tax
                                                   learn about your company.                           Federal Business Opportunities, or
   identification number, is generally
                                                     6. Use ORCA (Online Representations               FedBizOpps, is an online service operated
   required of all businesses. For more
                                                     and Certifications Application)                   by the federal government that
   information, go to                   Prospective contractors must complete
   3. Identify your NAICS (North American                                                              announces available business
                                                     (electronically or through submission of          opportunities. FedBizOpps helps identify
   Industry Classification) codes                    paperwork), representations and
   The NAICS codes are used to classify the                                                            the needs of federal agencies and
                                                     certifications for small business size and        available contracting opportunities. To
   industry a particular business occupies.          program status as part of the process
   You will need at least one NAICS code to                                                            begin searching for contracting
                                                     that registers your business for federal          opportunities, go to
   complete your registration, but be sure to        contracting opportunities. To make this
   list as many as apply. You may also add                                                             10. Marketing Your Business
                                                     process easier for everyone involved, the         Registering your business is not enough
   or change NAICS codes at any time. To             government developed ORCA, where
   find NAICS code, visit                                                                              to obtain a federal contract: you will need
                                                     generally, businesses can complete all of         to market your business to attract federal                    the paperwork online. To begin this
   4. Identify your SIC (Standard Industrial                                                           agencies. Tips for good marketing are:
                                                     process, first register your firm in CCR,         • Determine which federal agencies
   Classification) codes                             then go to
   The SIC codes are four-digit numbers                                                                  buy your product or service, and
                                                     7. Register with the GSA Schedule                   get to know them
   that are used to classify the industry a          The GSA (Government Services
   particular business occupies. While                                                                 • Identify the contracting procedures of
                                                     Administration) Multiple Award Schedule             those agencies
   NAICS codes have largely replaced SIC             (aka Federal Supply Schedule) is used by
   codes, you will still need to provide your                                                          • Focus on opportunities in your
                                                     GSA to establish long-term, government              niche and prioritize
   SIC code. SIC codes can be found at               wide contracts with commercial firms.                                                              Although not required, you may
                                                     Once these contracts are established,
   5. Register with the CCR (Central                                                               want to obtain a PSC (Product Services
                                                     government agencies can order the
   Contractor Registration)                          supplies and services they need directly
                                                                                                   Code) and/or a FSC (Federal Supply
   The CCR is an online government                   from the firms through the use of an          Classification). These codes provide
   maintained database of companies                  online shopping tool. Becoming a GSA          additional information about the
   wanting to do business with the federal           schedule contractor increases your            services and products your business
   government. Agencies search the                   opportunity for contracts across all levels   offers.

      The following federal procurement                business.                                        government. To find a PTAC in your
    resources may also be of assistance:             • PCRs (Procurement Center                         state, go to
       • The Certificates of Competency                Representatives) and CMRs                   •    Department of Defense (The DoD is
         program allows a small business, that         (Commercial Marketing                            the largest purchaser of goods from
         is the apparent successful offeror,           Representatives): PCRs work to                   small businesses):
         to appeal a contracting officer’s non-        increase the small business share      
         responsibility determination that it is       of federal procurement awards.              •    Office of Federal Procurement Policy:
         unable to fulfill the requirements of         CMRs offer many services to small      
         a specific government contract. The           businesses, including counseling on         •    Acquisition Forecast:
         SBA will conduct a detailed review            how to obtain subcontracts. To find a  
         of the firm’s technical and financial         PCR or CMR near you, go to                       _forecasts/index.html
         capabilities to perform on the                           •    Federal Supply Schedule (FSS):
         contract. If the business demonstrates      • PTACs (Procurement Technical           
         the capability to perform, the SBA            Assistance Centers): PTACs                  •    GSA Center for Acquisition
         issues a Certificate of Competency            provide assistance to businesses                 Excellence:
         to the contracting officer, requiring         that want to sell products and                   content/103487
         award of that contract to the small           services to federal, state, and/or local

Visit us online:                                                                                  INDIANA Small Business Resource —   29
                                  Knowing the Types of Assistance Available for Recovery

                         he Disaster Assistance             Military Reservist Economic Injury          The page provides links to resources
                         Program is SBA’s largest       Disaster Loans (MREIDLs) are working         to help you put together your own
                         direct loan program, and       capital loans for small businesses           emergency plan, preparedness tips,
                         the only form of SBA           adversely affected when an essential         and fact sheets about SBA recovery
                         assistance not limited to      employee is called up to active duty         assistance for homeowners, renters,
           small businesses. SBA is responsible         by the National Guard or Reserves.           businesses of all sizes and private,
           for providing affordable, timely and         An “essential employee” is defined           nonprofit organizations.
           accessible financial assistance to           as an individual (whether or not the            Additionally, to help small businesses
           homeowners, renters, businesses of all       owner of the small business) whose           with their preparedness planning, SBA
           sizes and private, nonprofit organizations   managerial or technical skill is critical    has teamed up with Agility Recovery
           following declared disasters. By law,        to the successfully daily operation          Solutions to offer business continuity
           governmental units and agricultural          of the business. The loan limit is $2        strategies for entrepreneurs via their
           enterprises are ineligible.                  million, and the funds may be used to        “PrepareMyBusiness” website. In
              The SBA offers two types of disaster      pay necessary operating expenses as          addition to offering practical disaster
              loans—Physical and Economic Injury        they mature until operations return to       preparedness tips, Agility is the co-host
              Disaster Loans.                           normal after the essential employee is       (with SBA) of a monthly disaster
               Home Physical Disaster Loans up          released from active military duty. The      planning webinar for business owners.
              to $200,000 are available to eligible     MREIDLs cannot be used to replace lost       Previous webinar topics have included
           homeowners to repair or replace to           profits.                                     discussions on crisis communications,
           its pre-disaster condition damaged or            For all disaster loans, SBA can only     testing your recovery plan, and using
           destroyed real estate not fully covered      approve loans to applicants having a         social media to enhance business
           by insurance. Renters and homeowners         credit history acceptable to SBA and         recovery. Visit
           alike may borrow up to $40,000 to repair     who also show the ability to repay the       to get the schedule for future webinars,
           or replace clothing, furniture, cars,        loans. The loan terms are established        view archived webinars, and for more
           appliances, etc., that was damaged or        in accordance with the borrower’s            disaster planning tips.
                                                        repayment ability. The law gives SBA
           destroyed in the disaster.                                                                   As small businesses are leading
                                                        several powerful tools to make disaster
               Business Physical Disaster Loans up                                                   America’s economic recovery, many of
                                                        loans affordable: low-interest rates
           to $2 million are available to qualified                                                  them are investing time and money
                                                        (around 4 percent), long-terms (up to
           businesses or private, nonprofit                                                          into their plans to grow and create
                                                        30 years), and refinancing of prior liens
           organizations of any size to help            (in some cases). As required by law,         jobs. Developing a strong disaster
           restore or replace damaged real estate,      the interest rate for each loan is based     preparedness plan should be a critical
           inventory, machinery, equipment and          on SBA’s determination of whether the        and integral piece of those efforts.
           other business assets to its pre-disaster    applicant has credit available elsewhere     Planning for a disaster is the best way of
           condition.                                   (the ability to borrow or use their own      limiting its effects.
               The SBA can also lend additional         resources to recover after the disaster).
           funds to homeowners and businesses               More information on all of SBA’s         Additional Resources
           to help with the cost of making              disaster assistance programs, including         The SBA has partnered with the
           improvements that protect, prevent           information for military reservists, is      American Red Cross to increase
           or minimize the same type of disaster        available at           awareness in the business community
           damage from occurring again.                                                              about the Red Cross Ready Rating™
               Economic Injury Disaster Loans           Disaster Preparedness                        program. Ready Rating
           (EIDLs) are working capital loans               For small businesses, surviving a         ( ™ is a free, self-
           available to qualified small businesses,     disaster doesn’t begin with clearing the     paced, web-based membership program
           private nonprofit organizations of all       debris and returning to work.                that helps a business measure its ability
           sizes and small agricultural cooperatives       With proper planning, surviving           to deal with emergencies, and gives
           that suffered financial losses because       begins long before the disaster strikes—     customized feedback on how to improve
           of the disaster, regardless of physical      or before active-duty orders are received.   those efforts.

           damage. The SBA can loan up to $2            Your planning should include insurance          Additional information on developing
           million to provide the necessary working     coverage, emergency power, protection        an emergency plan is available at the
           capital to help small businesses pay fixed   of company records, fire safety, medical     federal government’s preparedness
           debts, payroll, accounts payable and         emergencies, taking care of your             website
           other bills that could have been covered     employees and continuity planning –             The Institute for Business and Home
           had the disaster not occurred. The loan      how your business will continue during       Safety ( ) has useful
           is not intended to replace lost sales or     and after the emergency or disaster.         tips on protecting your home or business.
           profits. The combined limit for economic        Starting is as easy as clicking on the
           injury and physical damage assistance        disaster preparedness page of SBA’s
           for businesses is $2 million.                website at

           30 — Small Business Resource   INDIANA                                                                         Visit us online:
                                  Watching out for small business interests

OFFICE OF ADVOCACY                         nonprofit organizations), and consider
                                           regulatory alternatives that minimize
                                                                                      owners, nonprofit organizations and
                                                                                      small government entities. Comments
   The SBA’s Office of Advocacy, the       the economic burden on small entities.     are forwarded to federal agencies for
“small business watchdog” of the             Advocacy’s mission is enhanced by        review, and in some cases fines may

                                                                                                                                         ADVOCACY AND OMBUDSMAN
government, examines the role and          a team of regional advocates, located      be lowered or eliminated and decisions
status of small business in the economy    in the SBA’s 10 regions. They are          changed in favor of the small business
and independently represents the           Advocacy’s direct link to small business   owners. Each year the National
views of small business to federal         owners, state and local government         Ombudsman files a report with the
agencies, Congress, the President and      entities, and organizations that           U.S. Congress on the responsiveness
federal appellate courts as friends        support the interests of small entities.   of federal agencies regarding their
of the court. Advocacy compiles and        The regional advocates help identify       actions of regulatory and compliance
interprets statistics on small business    regulatory concerns of small business      enforcement on small businesses.
and is the primary entity within the       by monitoring the impact of federal and       To request help, send the National
federal government to disseminate small    state policies at the grassroots level.    Ombudsman a complete Federal Agency
business data.                               Learn more about the Office of           Comment Form. You may do this
   Headed by the Chief Counsel for         Advocacy at          by fax at 202-481-5719; online at the
Advocacy, the office also funds outside                                               Ombudsman’s Web page:
                                           OFFICE OF THE NATIONAL
research of small business issues                                           ; or by mail at
and produces numerous publications                                                    409 Third Street S.W., Mail Code 2120,
to inform policy makers about the
important role of small business
                                           OMBUDSMAN                                  Washington, DC 20416.
                                              If excessive fines, penalties or           The Ombudsman also coordinates
in the economy and the impact of                                                      10 Regional Regulatory Fairness
                                           unfair regulatory enforcement by
government policies on small business.                                                Boards which meet regularly to receive
                                           federal agencies are problems for your
In addition, the office monitors federal                                              comments about federal regulations
                                           small business, you have a voice in
agency compliance with the Regulatory                                                 affecting small businesses.
                                           Washington, D.C., through the SBA’s
Flexibility Act – the law that requires                                                  Learn more about the National
                                           Office of the National Ombudsman.
agencies to analyze the impact of their                                               Ombudsman from the Web site above or
                                              The Ombudsman receives
proposed regulations on small entities                                                call 888-REG-FAIR.
                                           comments regarding federal regulatory
(including small businesses, small
                                           enforcement from small business
governmental jurisdictions and small

Visit us online:                                                                 INDIANA Small Business Resource —   31
                ADDITIONAL RESOURCES     Taking care of start up logistics
                                                                                            Business Interruption – While
                                                                                         property insurance may pay enough
                                                                                         to replace damaged or destroyed
                                                                                         equipment or buildings, how will you
                                                                                         pay costs such as taxes, utilities and
                                                                                         other continuing expenses during the
                                                                                         period between when the damage occurs
                                                                                         and when the property is replaced?
                                                                                         Business Interruption (or “business
                                                                                         income”) insurance can provide sufficient
                                                                                         funds to pay your fixed expenses during
                                                                                         a period of time when your business is
                                                                                         not operational.

                                                                                            “Key Man” – If you (and/or any
                                                                                         other individual) are so critical to
         ven if you are running a           name. For more information, contact the      the operation of your business that it
         small home-based business,         county clerk’s office in the county where    cannot continue in the event of your
         you will have to comply with       your business is based. If you are a         illness or death, you should consider
         many of the local, state, and      corporation, you’ll need to check with the   “key man” insurance. This type of
         federal regulations. Avoid the     state.                                       policy is frequently required by banks
temptation to ignore regulatory details.    State Information Center                     or government loan programs. It also
Doing so may avert some red tape in the        317-233-0800 or 800-45-STATE              can be used to provide continuity in
short term, but could be an obstacle as                                                  operations during a period of ownership
your business grows. Taking the time        BUSINESS INSURANCE                           transition caused by the death,
to research the applicable regulations is      Like home insurance, business             incapacitation or absence due to a Title
as important as knowing your market.        insurance protects your business against     10 military activation of an owner or
Bear in mind that regulations vary by       fire, theft and other losses. Contact your   other “key” employee.
industry. If you’re in the food-service     insurance agent or broker. It is prudent        Automobile – It is obvious that
business, for example, you will have to     for any business to purchase a number        a vehicle owned by your business
deal with the health department. If you     of basic types of insurance. Some types      should be insured for both liability and
use chemical solvents, you will have        of coverage are required by law, other       replacement purposes. What is less
environmental compliances to meet.          simply make good business sense. The         obvious is that you may need special
Carefully investigate the regulations       types of insurance listed below are          insurance (called “non-owned automobile
that affect your industry. Being out of     among the most commonly used and are         coverage”) if you use your personal
compliance could leave you unprotected      merely a starting point for evaluating       vehicle on company business. This
legally, lead to expensive penalties and    the needs of your business.                  policy covers the business’ liability for
jeopardize your business.                      Liability Insurance – Businesses          any damage which may result for such
                                            may incur various forms of liability in      usage.
BUSINESS LICENSES                           conducting their normal activities. One         Officer and Director – Under most
                                                                                         state laws, officers and directors of a
  There are many types of licenses, both    of the most common types is product
                                            liability, which may be incurred when        corporation may become personally
state and local as well as professional.                                                 liable for their actions on behalf of the
Depending on what you do and where          a customer suffers harm from using
                                            the business product. There are many         company. This type of policy covers this
you plan to operate, your business may                                                   liability.
be required to have various state and/      other types of liability, which are
                                            frequently related to specific industries.      Home Office – If you are establishing
or municipal licenses, certificates or                                                   an office in your home, it is a good idea
permits.                                    Liability law is constantly changing.
                                            An analysis of your liability insurance      to contact your homeowners’ insurance
  Licenses are typically administered by                                                 company to update your policy to include
a variety of state and local departments.   needs by a competent professional is
                                            vital in determining an adequate and         coverage for office equipment. This
Consult your state or local government                                                   coverage is not automatically included in
for assistance. For additional              appropriate level of protection for your
                                            business.                                    a standard homeowner’s policy.
information, contact:
State Information Center                       Property – There are many different
    317-233-0800 or 800-45-STATE            types of property insurance and levels
                                            of coverage available. It is important
                                                                                         TAXES                                                          Taxes are an important and complex
                                            to determine the property you need
                                                                                         aspect of owning and operating a
FICTITIOUS BUSINESS NAME                    to insure for the continuation of your
                                            business and the level of insurance you      successful business. Your accountant,
  Registering your business name, after     need to replace or rebuild. You must also    payroll person, or tax advisor may be
doing a search to make sure that it is      understand the terms of the insurance,       very knowledgeable, but there are still
not already in use, protects you from       including any limitations or waivers of      many facets of tax law that you should
others who might want to use the same       coverage.                                    know. The Internal Revenue Service is a
                                                                                         great source for tax information.

32 — Small Business Resource   INDIANA                                                                       Visit us online:
Small Business/Self-Employed Tax              sales tax issues, contact your state’s       partnership earnings on his individual
Center:         government or call:                          Form 1040 based on the information
index.html                                    Indiana Department of Revenue                from the K-1 filed with the Form 1065.
  When you are running a business, you           800-457-8283                                Corporation: You must file a Federal
don’t need to be a tax expert. However,                            Corporation Income Tax return (Form
you do need some tax basics. IRS Small                                                     1120). You will also be required to report
Business/Self-Employed Tax Center
gives you the information you need to
                                              FEDERAL INCOME TAX                           your earnings from the corporation
                                                                                           including salary and other income such
                                                 Like the state income tax, the method
stay tax compliant so your business can                                                    as dividends on your personal federal
                                              of paying federal income taxes depends
thrive.                                                                                    income tax return (Form 1040).
                                              upon your legal form of business.
Small Business Forms and Publications
                                                 Sole Proprietorship: You must file,,id=
                                              IRS Federal Form Schedule C along            FEDERAL PAYROLL TAX
                                              with your personal Federal Income              Federal Withholding Tax: Any
  Download multiple small business and        Tax return (Form 1040) and any other
self-employed forms and publications.                                                      business employing a person must
                                              applicable forms pertaining to gains or      register with the IRS and acquire an
                                              losses in your business activity.            EIN and pay federal withholding tax at
FEDERAL PAYROLL TAX                              Partnership: You must file a Federal      least quarterly. File Form SS-4 with the
(EIN NUMBERS)                                 Partnership return (Form 1065). This
                                              is merely informational to show gross
                                                                                           IRS to obtain your number and required
  An Employer Identification Number                                                        tax forms. Call 800-829-3676 or
                                              and net earnings of profit and loss. Also,   800-829-1040 if you have questions.
(EIN),also known as a Federal Employer        each partner must report his share of
Identification Number (FEIN) , is used
to identify a business entity. Generally,
businesses need an EIN to pay federal
withholding tax..
  You may apply for an EIN in various
ways, one of which is to apply online.,,id=
102767,00.html. This is a free service
offered by the Internal Revenue Service.
Call 800-829 1040 if you have questions.
You must check with your state to
determine if you need a state number or
  More information can be found at or contact the local office at:
IRS Indiana District Office
     800-829-3676 for Forms
     606-292-5467 for number assignments

   Every employee must pay Social
Security and Medicare coverage. If you
are self-employed, your contributions are

                                                                                                                                               ADDITIONAL RESOURCES
made through the self-employment tax.
   The IRS has publications, counselors
and workshops available to help you sort
it out. For more information, contact the
IRS at 800-829-1040 or

   If you plan to sell products, you will
need a Sales Tax Exemption Certificate.
It allows you to purchase inventory, or
materials, which will become part of the
product you sell, from suppliers without
paying taxes. It requires you to charge
sales tax to your customers, which you
are responsible for remitting to the
state. You will have to pay penalties if
it is found that you should have been
taxing your products and now owe back
taxes to the state. For information on

Visit us online:                                                                       INDIANA Small Business Resource —   33
IRS WEB PRODUCTS FOR                              possible to leave and return to a specific
                                                  point within the lesson. Users also have
                                                                                                          periodic payments towards, and/or file
                                                                                                          quarterly reports about payroll taxes
SMALL BUSINESSES                                  access to a list of useful online references            and other mandatory deductions. You
  For the most timely and up-to-date              that enhance the learning experience by                 may contact these government agencies
tax information, go to               allowing them to view references and                    for information, assistance and forms.
businesses/small/index.html.                      the video lessons simultaneously.                       Social Security Administration
                                                    Tax Calendar for Small Businesses
VIRTUAL SMALL BUSINESS                            and Self-Employed (Publication 1518)

WORKSHOP                                ,,id=
                                                                                                          Social Security’s Business Services                        The Tax Calendar for Small                            Online
  The Virtual Small Business Tax                                                                            The Social Security Administration
                                                  Businesses and Self-Employed contains
Workshop is the first of a series of video                                                                now provides free electronic services
                                                  useful information on general business
products designed exclusively for small                                                                   online at
                                                  taxes, IRS and SSA customer assistance,                 employer/. Once registered for Business
business taxpayers. This workshop helps           electronic filing and paying options,
business owners understand federal tax                                                                    Services Online, business owners or
                                                  retirement plans, business publications                 their authorized representative can:
obligations. The Virtual Small Business           and forms, common tax filing dates, and                   • file W-2s online; and
Workshop is available on CD                       federal legal holidays.                                   • verify Social Security Numbers,,id=                                                                   through the Social Security Number
101169,00.html and online if you         SOCIAL SECURITY CARDS                                       Verification Service, used for all
                                                                                                              employees prior to preparing and
are unable to attend a workshop in                   All employees must have a social                         submitting Forms W-2.
person. Small business workshops are              security card. It must be signed by its                 Federal Withholding
designed to help the small business               owner, and you should always ask to                        U.S. Internal Revenue Service
owner understand and fulfill their                see and personally record the social                       800-829-1040
federal tax responsibilities. Workshops           security number. Failure to do so may            
are sponsored and presented by IRS                cause your employee to lose benefits and
partners who are federal tax specialists.         considerable trouble for yourself in back               Health Insurance
   Workshop topics vary from a general            tracking to uncover the error.                            Compare plans in your area at
overview of taxes to more specific topics            Each payday, your employees must
such as recordkeeping and retirement              receive a statement from you telling
plans. Although most are free, some               them what deductions were made
                                                                                                          Employee Insurance
                                                                                                            If you hire employees you may be
workshops have fees associated with               and how many dollars were taken out
                                                                                                          required to provide unemployment or
them. Fees for a workshop are charged             for each legal purpose. This can be                     workers’ compensation insurance. For
by the sponsoring organization, not the           presented in a variety of ways, including               forms and information call:
IRS.                                              on the check as a detachable portion                    Indiana Department of Workforce
   The IRS’s Virtual Small Business               or in the form of an envelope with the                  Development
Tax Workshop is an interactive                    items printed and spaces for dollar                        800-437-9136
resource to help small business owners            deductions to be filled in.
learn about their federal tax rights                                                                      Unemployment Insurance
                                                  EMPLOYEE CONSIDERATIONS
and responsibilities. This educational                                                                       Indiana Department of Workforce
product, available online and on CD
,, consists of nine stand-alone lessons           Taxes                                                      10 N. Senate Ave.
                                                                                                             Indianapolis, IN 46204
that can be selected and viewed in any              If you have any employees, including
                                                                                                             317-232-7436 or 800-891-6499
sequence. A bookmark feature makes it             officers of a corporation but not the sole       
                                                  proprietor or partners, you must make
                                                                                                          Workers’ Compensation Insurance
                                                                                                             317-233-3910 or 800-824-2667

                                                                                                          WORKPLACE DISABILITY
                                                                                                            Americans with Disabilities (ADA):
                                                                                                          For assistance with the ADA, call
                                                                                                          800-669-3362 or visit

                                                                                                          U.S. CITIZENSHIP AND
                                              • Faster, better search capabilities
                                                                                                          IMMIGRATION SERVICES
                                              • SBA Direct to customize your search                         The Federal Immigration Reform and
                                                                                                          Control Act of 1986 requires employers
                                              • SBA Community for news and information                    to verify employment eligibility of
  Go to SBA’s new website today,                                                                          new employees. The law obligates
  featuring:                                  Some pages may change URLs on the upgraded site. Please
                                              consult or your local SBA district office for   an employer to process Employment
                                              assistance.                                                 Eligibility Verification Form I-9. The

34 — Small Business Resource   INDIANA                                                                                          Visit us online:
U.S. Citizenship and Immigration
Services Office of Business Liaison offers
                                             SAFETY & HEALTH                             coding to identify items they receive and
                                                                                         ship. There are several companies that
a selection of information bulletins and     REGULATIONS                                 can assist businesses with bar-coding
live assistance through the Employer           All businesses with employees             needs. You may want to talk with an
Hotline. For forms call 800-870-3676, for    are required to comply with state           SBDC, SCORE or WBC counselor for
the Employer Hotline call 800-357-2099.      and federal regulations regarding           more information.
                                             the protection of employees. The
E-Verify: Employment Eligibility             Occupational Safety and Health              Federal Registration of Trademarks
Verification                                 Administration outlines specific health     and Copyrights
   E-Verify, operated by the Department      and safety standards adopted by the           Trademarks or service markets are
of Homeland Security in partnership          U.S. Department of Labor.                   words, phrases, symbols, designs or
with the Social Security Administration,     Indiana OSHA (Department of Labor)          combinations thereof that identify
is the best--and quickest--way for              317-232-2693                             and distinguish the source of goods.
employers to determine the employment                                                    Trademarks may be registered at both
eligibility of new hires. It is a safe,      BUILDING CODES, PERMITS                     the state and federal level. To register a
simple, and secure Internet-based
system that electronically verifies the
                                             AND ZONING                                  federal trademark, contact:
                                                                                         U.S. Patent and Trademark Office:
Social Security number and employment          It is important to consider zoning           P.O. Box 1450
eligibility information reported on Form     regulations when choosing a site for your      Alexandria, VA 22313-1450
I-9. E-Verify is voluntary in most states    business. You may not be permitted to          800-786-9199
and there is no charge to use it.            conduct business out of your home or 
   If you are an employer or employee        engage in industrial activity in a retail
                                             district. Contact the business license      Trademark Information Hotline
and would like more information about                                                       703-308-9000
the E-Verify program, please visit           office in the city or town where the or contact our          business is located.
Customer Support staff: 1-888-464-4218                                                   STATE REGISTRATION OF A
Monday – Friday 8 am – 5 pm.                 BAR CODING                                  TRADEMARK
E-mail:                       Many stores require bar coding on           Trademarks and service marks may
                                             packaged products. Many industrial          be registered in a state.
                                             and manufacturing companies use bar

Visit us online:                                                                     INDIANA Small Business Resource —   35
Secretary of State,                          U.S. Patent and Trademark Office. For         Exporting
Business Services Division                   more information, contact the:                 For information on regulations
    302 W. Washington St., Rm. E018          U.S. Patent and Trademark Office
    Indianapolis, IN 46204                      800-786-9199 •
                                                                                           concerning international trade, contact:
                                                                                           International Trade Programs
                                                                                              U.S. Export Assistance Center
Caution: Federally registered                Copyrights                                       8109 E. Jefferson Ave., Ste. 110
trademarks may conflict with and               Copyrights protect original works of           Detroit, MI 48214
supersede state registered business and      authorship including literary, dramatic,         313-226-3670 • 313-226-3657 Fax
product names.                               musical and artistic, and certain other
                                             intellectual works. Copyright does
Patents                                      not protect facts, ideas and systems,         U.S. Commercial Service
  A patent is the grant of a property        although it may protect the way these            U.S. Department of Commerce
right to the inventor by the U.S. Patent     things are expressed. For general                Indianapolis U.S. Export Assistance Center
and Trademark Office. It provides the        information contact:                             11405 N. Pennsylvania St., Ste. 106
owner with the right to exclude others       U.S. Copyright Office                            Carmel, IN 46032
from making, using, offering for sale or        U.S. Library of Congress                      317-582-2300 • 317-582-2301 Fax
                                                James Madison Memorial Building     
selling the patented item in the United
States.                                         Washington, DC 20559
  Additional information is provided in         202-707-9100 - Order Line
the publications, General Information           202-707-3000 - Information Line
Concerning Patents and other
publications distributed through the

Choosing Your Business Structure
   There are many forms of legal             relatively little regulation and are fairly   from those of the individual(s) forming
structure you may choose for your            easy to establish. A formal partnership       the corporation. It’s the most complex
business. Each legal structure offers        agreement is recommended to address           form of business organization and is
organizational options with different        potential conflicts such as: who will be      comprised of shareholders, directors
tax and liability issues. We suggest you     responsible for performing each task;         and officers. Since the corporation
research each legal structure thoroughly     what, if any, consultation is needed          is a separate legal entity in its own
and consult a tax accountant and/or          between partners before major decisions,      right it can own assets, borrow money
attorney prior to making your decision.      and what happens when a partner               and perform business functions
   The most common organizational            dies. Under a general partnership each        without directly involving the owners.
structures are sole proprietorships,         partner is liable for all debts of the        Corporations are subject to more
general and limited partnerships, “C”        business. Profits are taxed as income to      government regulation and offer the
and “S” corporations and limited liability   the partners based on their ownership         owners the advantage of limited liability,
companies.                                   percentage.                                   but not total protection from lawsuits.
   Each structure offers unique tax and
liability benefits. If you’re uncertain      Limited Partnership                           Subchapter “S” Corporation
which business format is right for you,         Like a general partnership, a                Subchapter “S” references a special
you may want to discuss options with a       limited partnership is established by         part of the Internal Revenue Code that
business counselor or attorney.              an agreement between two or more              permits a corporation to be taxed as a
                                             persons. However, there are two types         partnership or sole proprietorship, with
                                                                                           profits taxed at the individual, rather
Sole Proprietorship                          of partners.
                                                                                           than the corporate rate. A business
   One person operating a business as          • A general partner has greater control
                                                 in some aspects of the partnership.       must meet certain requirements for
an individual is a sole proprietorship.                                                    Subchapter “S” status. Contact the IRS
                                                 For example, only a general partner
It’s the most common form of business            can decide to dissolve the partnership.   for more information.
organization. Profits are taxed as               General partners have no limits on the
income to the owner personally. The              dividends they can receive from profit    LLCs and LLPs
personal tax rate is usually lower than          so they incur unlimited liability.
                                                                                              The limited liability company is
the corporate tax rate. The owner              • Limited partners can only receive
                                                 a share of profits based on the           a relatively new business form. It
has complete control of the business,                                                      combines selected corporate and
                                                 proportional amount on their
but faces unlimited liability for its                                                      partnership characteristics while
                                                 investment, and liability is similarly
debts. There is very little government           limited in proportion to their            still maintaining status as a legal
regulation or reporting required with            investment.                               entity distinct from its owners. As a
this business structure.                                                                   separate entity it can acquire assets,
                                             “C” Corporation                               incur liabilities and conduct business.
General Partnership                             A “C” corporation is a legal entity        It limits liability for the owners. The
   A partnership exists when two             created under state law by the filing of      limited liability partnership is similar
or more persons join together in             articles of incorporation. A corporation      to the LLC, but it is for professional
the operation and management of a            is a separate entity having its own           organizations.
business. Partnerships are subject to        rights, privileges and liabilities, apart

36 — Small Business Resource   INDIANA                                                                            Visit us online:
                                                                                                                   REGISTER A BUSINESS
                                                                                                                     Indiana Dept. of Revenue

                                                                                                                   RETAIL MERCHANTS CERTIFICATE
                                                                                                                     Indiana Dept. of Revenue

                                                                                                                   SALES TAX
                                                                                                                     Indiana Dept. of Revenue

                                                                                                                   SOCIAL SECURITY ADMINISTRATION

                                                                                                                   STATE INFORMATION CENTER
                                                                                                                     317-233-0800 or 800-457-8283

                                                                                                                   STATE WITHHOLDING
                                                                                                                     Indiana Dept. of Revenue

                                                                                                                   TRADEMARK AVAILABILITY SEARCH
                                                                                                                     Secretary of State

                                                                                                                   TRADEMARK REGISTRATION
                                                                                                                     Secretary of State
 Other Sources of                          COPYRIGHT INFORMATION                FEDERAL TRADEMARKS                   Tradename Registration
                                             Library of Congress                  800-768-9199                       County Recorder
 Assistance                                  202-707-3000                                                            See local listing
                                                                                FRAUD COMPLAINTS
   312-353-8614                            INFORMATION                            877-382-4357                       Dept. of Labor
                                             Indiana Dept. of Revenue                                                317-232-6805
 ATTORNEY GENERAL – GREG ZOELLER             317-615-2662                       GRANTS
   State of Indiana                                                                        WAGE & HOUR DIVISION
   317-232-6201                            CORPORATIONS DIVISION                                                    Dept. of Labor
                                             Secretary of State                 INDIANA STATE LIBRARY               866-487-9243
 BETTER BUSINESS BUREAU                      317-232-6576                         317-232-3675
   317-488-2200 general number                                                    for general information          ZONING REGULATIONS
                                           DEPT. OF LABOR - INDIANA                                                  State Information Center
 BUSINESS INQUIRES & COMPLAINTS              317-232-2655 general number        INTERNAL REVENUE SERVICE             317-233-0800 or 800-457-8283
   Better Business Bureau                                                         800-829-4933
   317-488-2222                            DISASTER OFFICE              
                                             Small Business Administration
 BUSINESS NAME REGISTRATION                  800-359-2227                       IRS BUSINESS/SPECIALTY TAX LINE
   (corporations)                                                                 Internal Revenue Service
   Secretary of State                                                             800-829-4933
   317-232-6576                            EMPLOYER IDENTIFICATION NUMBER
                                           (EIN)                                LICENSES & PERMITS

                                                                                                                                                                  OTHER ASSISTANCE
 BUSINESS NAME REGISTRATION                   Indiana Dept. of Revenue             State Information Center
                                              317-233-4015                         317-233-0800 or 800-457-8283
   317-233-0800 or 800-457-8283            INTERNAL REVENUE SERVICE             NAME AVAILABILITY LINE
   Also file with County Recorder            800-829-4933                         Secretary of State
   (sole proprietorships & partnerships)                          317-232-6576
   County Recorder
                                           (EPA)                                FEMA
 CENSUS STATISTICS/DATA CENTER               800-621-8431                         800-427-2354
   Indiana State Library
   317-232-3733                            EQUAL EMPLOYMENT OPPORTUNITY         OCCUPATIONAL SAFETY & HEALTH
                                           COMMISSION (EEOC)                    ADMINISTRATION (OSHA)
 CODE ENFORCEMENT/BLDG. INSPECTORS           317-226-7212                         317-226-7290
   Dept of Homeland Security
   317-232-1407                            FEDERAL INFORMATION CENTER           PROPERTY TAX
                                             800-333-4636 or 800-688-9889       DEPT OF LOCAL GOVERNMENT FINANCE
                                             Both numbers go to Fed Info Line     317-232-3777

Visit us online:                                                                                     INDIANA Small Business Resource —        37
                       S BA IN DI ANA L END ER S
                        New and Active                         FIRST CHATHAM BANK               NATIONAL BANK OF INDIANAPOLIS
                        Participating Lenders ~                FIRST FARMERS BANK AND           NEWTEK SMALL BUS. FINANCE, INC.
                        Fiscal Year 2011                         TRUST                          NORTH SALEM STATE BANK
                                                               FIRST FEDERAL SAVINGS BANK
                          1ST SOURCE BANK                                                       OLD NATIONAL BANK
                          AMERIANA BANK                                                         PARK VIEW SAVINGS BANK
                                                               FIRST FINANCIAL BANK N.A. (IN)
                          AMERICAN BUSINESS LENDING                                             PEOPLES BANK SB
                                                               FIRST FINANCIAL BANK N.A. (OH)
                           INC.                                                                 PNC BANK, N.A.
                                                               FIRST HARRISON BANK
                          AMERICAN NATIONAL BANK                                                PROVIDENCE BANK, LLC
                                                               FIRST INTERCONTINENTAL BANK
                          AMERICAN SAVINGS, FSB                                                 REGIONS BANK
                                                               FIRST MERCHANTS BANK N.A.
                          BANK OF GENEVA                                                        RIDGESTONE BANK
                                                               FIRST NATIONAL BANK
                          BANK OF INDIANA N.A.                                                  SALIN BANK & TRUST COMPANY
                                                               FIRST SECURITY BANK -
                          BLOOMFIELD STATE BANK                  OWENSBORO                      SCB BANK
                          BRANCH BANK & TRUST                  FIRST WESTERN SBLC, INC.         SOUTH CENTRAL BANK N.A.
                                                               FIRST-CITIZENS BANK & TRUST      SQUARE 1 BANK
                          BUSEY BANK
                                                               FREEDOM BANK                     STAR FINANCIAL BANK
                          CELTIC BANK CORPORATION
                                                               GERMAN AMERICAN BANK             STATE BANK & TRUST CO. (OH)
                          CENTIER BANK
                                                               GRABILL BANK                     STATE BANK OF LIZTON
                          CENTRA CREDIT UNION
                                                               HARRIS N.A.                      STEARNS BK N.A.
                                                               HEARTLAND COMMUNITY BANK         STOCK YARDS BANK & TRUST CO.
                          CHASE BANK N.A.
                                                               HOME BANK, SB                    SUPERIOR FINANCIAL GROUP, LLC
                          CIT SMALL BUS. LENDING CORP
                                                               HORIZON BANK N.A.                THE GARRETT STATE BANK
                          CITIZENS FINANCIAL BANK
                                                               INDIANA BANK AND TRUST           THE HUNTINGTON NATIONAL BANK
                          CITIZENS NATL BANK – PARIS             COMPANY                        THE RIDDELL NATIONAL BANK
                          COMMUNITY 1ST BANK -                 INDIANA BUSINESS BANK
                           INDIANA                                                              THREE RIVERS FEDERAL

                                                               JACKSON COUNTY BANK                CREDIT UNION
                          COMMUNITY STATE BANK
                                                               KEYBANK N.A.                     U.S. BANK N.A.
                          EVANSVILLE TEACHERS FCU
                                                               LA PORTE SAVINGS BANK            VISION ONE CU
                          FCN BANK N.A.
                                                               LAFAYETTE COMMUNITY BANK         WAYNE BANK AND TRUST CO.
                          FARMERS AND MERCHANTS
                            BANK                               LAKE CITY BANK                   WELLS FARGO BANK N.A.
                          FARMERS BANK FRANKFORT               LEGENCE BANK                     WEST END BANK, S.B.
                          FARMERS STATE BANK                   LIVE OAK BANKING COMPANY         WGE FEDERAL CREDIT UNION
                          FIFTH THIRD BANK                     M&I MARSHALL & ILSLEY BANK       WILSON & MUIR BANK &
                                                                                                 TRUST CO.
                          FIRST CAPITAL BANK (FIRST            MARKLEBANK
                            COLORADO)                          MUTUALBANK

                      38 — Small Business Resource   INDIANA                                                      Visit us online:

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