Going Into Business in West Virginia - West Virginia Department of ...

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Financing Your Business Small Business Administration SBA provides a number of financial assistance programs for small businesses, including debt financing, surety bonds, and equity financing. Even though SBA does not loan money directly to small business owners, they play an important role for people who want to finance or grow their business. When you apply for a SBA-backed loan at your local bank or credit union, you are asking SBA to provide a guarantee that you will repay your loan as promised. Guaranteed Loan Programs (Debt Financing) SBA Guaranteed Loan Programs set the guidelines for loans made by its partners (lenders, community development organizations, and microlending institutions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. Financing programs include: 7(a) Loans The 7(a) loan program is the backbone of the SBA financing programs. A borrower can receive up to $5 million gross with an 85% guaranty for loans of $150,000 or less and a 75% guaranty on amounts greater than $150,000; there is a $375 million maximum guaranty. Eligible uses of funds include acquisition and expansion of assets such as land, building and equipment; working capital and more. SBAExpress The SBAExpress program gives small business borrowers an accelerated turnaround time for SBA’s review. You will receive a response to your application within 36 hours. In addition, lower interest rates are often available to you when you apply through an Express program. Patriot Express The SBA’s Patriot Express Loan is for veterans and members of the military community wanting to establish or expand small businesses. Eligible military members include veterans; service-disabled veterans; active-duty service members eligible for the military’s Transition Assistance Program; Reservists and National Guard members; current spouses of any of the above and the widowed spouse of a service member or veteran who died during service or of a service-connected disability. Loan proceeds can be used for most business purposes, including start up costs; equipment, businessoccupied real-estate and inventory purchases; working capital; expansion; preparing your business for the possibility of your deployment; setting up to sell goods and services to the government and recovery from declared disasters. Rates for loans are generally 2.25 percent to 4.75 percent over prime depending upon the size and maturity of the loan. 62 Going into Business in West Virginia
Financing Your Business Small Loan Advantage and Community Advantage 7(a) Loan Initiatives SBA introduced two new initiatives in February, 2011, aimed at expanding access to capital for small businesses and entrepreneurs in underserved communities. Small Loan Advantage and Community Advantage Loans offer a streamlined application process for SBA 7(a) loans up to $250,000. Both programs have a maximum loan size of $250,000 with a guarantee of 85 percent for loans up to $150,000 and 75 percent for those greater than $150,000. Most Small Loan Advantage loans can be approved in a matter of minutes through electronic submission (e-Tran); non-delegated Small Loan Advantage loans will be approved within 5 to 10 days. Most Community Advantage loans will be approved within 5 to 10 days. Small Loan Advantage features streamlined paperwork, with a two-page application for borrowers and lenders can use their own note and guaranty agreement; Community Advantage features streamlined paperwork, with a two-page application for borrowers. Small Loan Advantage is open to financial institutions participating in SBA’s Preferred Lender Program (PLP). Community Advantage is open to Community Development Financial Institutions, SBA’s Certified Development Companies and SBA’s nonprofit microlending intermediaries. Rural Lender Advantage The Small/Rural Lender Advantage (S/RLA) is designed to accommodate the unique loan processing needs of small community/rural-based lenders by simplifying and streamlining loan application process and procedures, particularly for smaller SBA loans. Key features are a streamlined 7(a) process for small loans ($350,000 or less) and a one page application (two sided) for very small loans with key, but limited additional information required for loans above $50,000. Guarantees of 85 percent for loans of $150,000 or less and 75 percent for loans greater than $150,000 with expedited processing of routine loans within 3-5 days. Bonding Program (Surety Bonds) SBA’s Surety Bond Guarantee (SBG) Program helps small business contractors who cannot obtain surety bonds through regular commercial channels. SBA can guarantee bonds for contracts up to $5 million, covering bid, performance and payment bonds, and in some cases up to $10 million for certain contracts. Venture Capital Program (Equity Financing) SBA’s Small Business Investment Company (SBIC) Program is a public-private investment partnership through which the SBA provides venture capital to small businesses. SBICs are privately owned and managed investment funds, similar to venture capital, private equity and private debt funds in terms of how they operate and their ultimate objective to generate high returns for their investors. However, unlike those funds, SBICs limit their investments to qualified small business concerns as defined by SBA regulations. West Virginia Development Office–Small Business Development Center 63
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GOING INTO BUSINESS IN WEST VIRGINI
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Table of Contents Chapter 7 Chapter
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iv Going into Business in West Vir
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Getting Started Owning a business a
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Getting Started Personal Considerat
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Getting Started Notes 10 Going int
Page 14 and 15: Finding a Business Starting and gro
Page 16 and 17: Finding a Business • What are the
Page 18 and 19: Finding a Business Notes 16 Going
Page 20 and 21: Choosing a Business Location Your C
Page 22 and 23: Choosing a Business Location Before
Page 24 and 25: Choosing a Business Location 22 Go
Page 26 and 27: Deciding on a Legal Structure The f
Page 28 and 29: Deciding on a Legal Structure Disad
Page 30 and 31: Deciding on a Legal Structure perso
Page 32 and 33: Deciding on a Legal Structure partn
Page 34 and 35: Deciding on a Legal Structure and z
Page 36 and 37: Selecting Your Insurance At some PO
Page 38 and 39: Selecting Your Insurance What are t
Page 40 and 41: Selecting Your Insurance For furthe
Page 42 and 43: Identifying Your Market No matter H
Page 44 and 45: Identifying Your Market Generally y
Page 46 and 47: Identifying Your Market These ideas
Page 48 and 49: What have you done What are you doi
Page 50 and 51: Identifying Your Market Notes 48 G
Page 52 and 53: Advertising Your Business Advertisi
Page 54 and 55: Advertising Your Business 5. Don’
Page 56 and 57: Advertising Your Business • Disco
Page 58 and 59: Advertising Your Business Notes 56
Page 60 and 61: Financing Your Business Will YOu ne
Page 62 and 63: Financing Your Business Review and
Page 66 and 67: Financing Your Business There are o
Page 68 and 69: Financing Your Business The Renewab
Page 70 and 71: Financing Your Business Venture Cap
Page 72 and 73: Financing Your Business Some state
Page 74 and 75: Financing Your Business Also, work
Page 76 and 77: Keeping Your Books Why keep reCOrds
Page 78 and 79: Keeping Your Books Federal Income,
Page 80 and 81: Keeping Your Books BooKKeeping sYst
Page 82 and 83: Securing a Business License Getting
Page 84 and 85: Securing a Business License File a
Page 86 and 87: Securing a Business License What is
Page 88 and 89: Securing a Business License What if
Page 90 and 91: Securing a Business License Departm
Page 92 and 93: Securing a Business License Contrac
Page 94 and 95: Securing a Business License Notes 9
Page 96 and 97: Business Planning Why write a busin
Page 98 and 99: Business Planning Review the list o
Page 100 and 101: Business Planning Notes 98 Going i
Page 102 and 103: Finding and Hiring Employees How do
Page 104 and 105: Finding and Hiring Employees Job ap
Page 106 and 107: Finding and Hiring Employees The an
Page 108 and 109: Finding and Hiring Employees Center
Page 110 and 111: Finding and Hiring Employees Federa
Page 112 and 113: Reporting Taxes As an entrepreneur,
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Reporting Taxes To file, use the fo
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Reporting Taxes Warehouse “Freepo
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Reporting Taxes 3 SIMPLE STEPS If y
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Reporting Taxes Notes 118 Going in
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Using West Virginia’s Business Re
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West Virginia Development Office Sm
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