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Small Business Development Center in Maryland

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					 U.S. SMALL BUSINESS
   ADMINISTRATION

SBA Programs and Services

   Stephen D. Umberger
      District Director
  Baltimore District Office
           WHAT IS SBA ?


• Small Federal Government Agency
• Established by Congress in 1953
• Aid, counsel and assist small business
  owners start, operate, and expand their
  businesses
• Provide access to capital, counseling and
  training, and increase federal
  procurement opportunities
BALTIMORE DISTRICT OFFICE


• Serves Maryland’s Small Business
  Communities, with the exception of
  Montgomery and Prince George’s
  Counties
• District Office Staff and our
  Resource Partner Network Provide
  Direct Access to all SBA Programs
  and Services
      ACCESS TO CAPITAL


• SBA 7(a) Guarantee Loan Program

• SBA 504 Loan Program

• SBA Export Financing
7(a) GUARANTEE PROGRAM


• Small Business Benefits
• Capital Not Otherwise Available on
  Conventional Terms
• Support Start-Ups
• Longer Terms, Lower Monthly
  Payments
           MAIN REASONS
         LENDERS USE SBA

•   Reduce the Banks Risk
•   Start-Up/ Emerging Small Business
•   Collateral Shortfall
•   Guaranteed Recovery for
    Participating Lenders
        PURPOSE OF LOAN
• Construction and/or Purchase Land
  and Building
• Expansion or Conversion of Existing
  Facilities
• Purchase Machinery & Equipment,
  Supplies, Materials, or Inventory
• Working Capital
• Short Term Asset Based Lines of
  Credit
• Refinance Existing Debt Under
  Certain Conditions
   MAXIMUM LOAN AMOUNTS

• Maximum Loan Amount $2.0 Million
• SBA Guaranty Maximum $1.5 Million

• SBA Guaranty Percentages:
• Loan of $150,000 or Less - 85%
• Loan of $150,000 or More - 75%

• SBAExpress Program: Maximum Loan
  $350,000 with a 50% Guaranty
     NATIONAL PRODUCTION



       National 7(a) Loan Statistics

• FY 05: 95,900 Loans for $15.2 Billion

• FY 06: 97,291 Loans for $14.5 Billion
    MARYLAND PRODUCTION


        Baltimore District Office
          7(a) Loan Statistics

• FY 05: 1,090 Loans for $198.3 Million

• FY 06: 1,122 Loans for $198.9 Million
         MARYLAND: FY2006

• Washington         33    $ 8,472,200

•   Allegany         10    $ 1,464,000
•   Anne Arundel     195   $ 47,709,374
•   Baltimore City   130   $ 11,828,000
•   Baltimore Co.    282   $ 47,547,306
•   Calvert          28    $ 7,361,200
•   Caroline         5     $ 387,000
•   Carroll          56    $ 11,119,600
•   Cecil            7     $ 1,085,000
•   Charles          37    $ 4,735,915
    MARYLAND FY2006 (cont.)

•   Dorchester     4     $ 1,141,000
•   Frederick      75    $15,996,400
•   Garrett        3     $ 138,000
•   Harford        59    $ 6,292,410
•   Howard         126   $23,566,200
•   Kent           2     $    44,500
•   Queen Anne’s   15    $ 2,851,200
•   St. Mary’s     14    $ 1,051,160
•   Somerset       2     $ 108,000
•   Talbot         7     $ 2,174,000
•   Wicomico       16    $ 2,515,100
•   Worcester      12    $ 1,354,000
504 CERTIFIED DEVELOPMENT
COMPANY LOAN PROGRAM

• Long-term financing for major
  fixed assets
• Up to $4 million in SBA backed
  debentures-manufacturing
• Up to $2 million for public policy
  loans
• Up to $1.5 million for regular loans
       504 LOAN PROGAM


• Borrowers work through SBA
  Certified Development Companies
• Four (4) CDC’s presently serve the
  Maryland market
• SBA CDCs Now Operate on
  Statewide Basis
      504 LOAN PROCEEDS


• Major Fixed Assets
• Building Acquisition, Expansion,
  and/or Construction
• Land and Site Improvements
• Capital Machinery and Equipment
  BUSINESSES THAT RECEIVE
         504 LOANS

• Small -- Net Worth under $7.0
  Million
• Net Profit after taxes under $2.5
  Million
• Organized for-profit
• Cannot engage in real estate
  speculation or investment in rental
  real estate
BASIC 504 STRUCTURE

       Equity
        10%



                SBA 40%




Bank 50%
 JOB CREATION REQUIREMENT


• 504 loans are Economic
  Development loans
  • 1 job for every $50.0 of debenture for
    regular loans
  • 1 job for every $75.0 of debenture for
    public policy loans
  • 1 job for every $100.0 for
    manufacturing loans
ADVANTAGES FOR THE LENDER


• Mitigated Risk: Typically 50%
  LTV on project assets
• Provide Customers with up to 90%
  Financing
• Retain Growing Commercial –
  Account Relationships
• Sell First Mortgages in the
  Secondary Market
       ADVANTAGES FOR THE
           BUSINESS

•   Low Down Payment
•   Fixed Interest Rate on SBA Portion
•   10 or 20 Year Maturities
•   Can Finance Some Soft Costs
•   Preserve Working Capital
•   SBA Loans are Assumable
 NATIONAL PRODUCTION


           FY 2005:
9194 Projects with $5.0 Billion
       in SBA Funding

           FY 2006:
9943 Projects with $5.7 Billion
       in SBA Funding
 MARYLAND PRODUCTION


            FY 2005:
 75 Projects with $47.1 Million
        in SBA Funding

           FY 2006:
66 Projects with $44.6 Million
      in SBA Funding
  SBA INTERNATIONAL TRADE


• Export Working Capital Program

• Export Express

• International Trade Term Loans

• Patrick Tunison, (410) 962-4582
        SBA PARTNERS
      LOCAL RESOURCES
SCORE, Counselors to America’s
 Small Business
 c/o Hagerstown Chamber of
 Commerce
 28 W. Washington St.
 Hagerstown, MD 21740
 (301) 739-2015
 www.score.org
         SBA PARTNERS
       LOCAL RESOURCES

Maryland Small Business Development
 Center (SBDC) Network
 Washington County SBDC
 Hagerstown Community College
 20140 Scholar Drive, Ste. 209
 Hagerstown, MD 21742
 (301) 797-0327
 www.sbdc-wmd.com
SBA PARTNERS
LOCAL RESOURCES

Women Entrepreneurs of
 Baltimore, Inc. (WEB)
 118 Light St., Ste. 202
 Baltimore, MD 21230
 (410) 727-4921
 www.webinc.org
      CONTACT SBA


SBA Baltimore District Office
    City Crescent Building
 10 S. Howard St., Ste. 6220
    Baltimore, MD 21201
    (410) 962-6195 x318
 stephen.umberger@sba.gov
      www.sba.gov/md

				
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