Tag Archives: small business

Small Business Administration Resources and Services Program Recap

Thank you to Erika Pearson for a very informational presentation on the mission and resources of the Small Business Administration.  Created to help foster the growth of small businesses, the SBA offers a wide range of services, including indirect funding, Lender Match, counseling and training, and disaster assistance on rare occasions.

The SBA’s Learning Center, https://www.sba.gov/learning-center, offers 64 FREE training programs, including Buying a Business, Finding and Attracting Investors, and Savings Plans for Small Businesses.  You can also find free/low cost training from local partners at https://www.sba.gov/NJ.

The SBA also partners with many local and state organizations to provide a wealth of resources for small businesses and their owners.  Local partners affiliates include Small Business Development Center and Counselors to America’s Small Business (SCORE).

Perhaps the most important aspect of the SBA are their loans.  SBA loans are not direct loans to the recipient, but rather a guarantee for a traditional lender, such as a bank, where the SBA provides the funding to the lender, which is then extended to the borrower.  In short, you apply to the lender, the SBA guarantees the lender of repaying the loan, then the lender approves the loan and gives you the money.

SBA loans help reduce the lender’s risk if the borrower has an aspect that is considered too risky, such as:

  • unstable cash flow or fear of repayment issues
  • insufficient collateral
  • seeking non-standard repayment terms
  • startups

Lenders generally look for the 5 “C”s:

  • Character
    • your background, education, and experience
    • Feasible Business Plan is critical
    • credit history, both personal and business
  • Capacity
    • Cash flow/business plan
    • can you repay?
    • will you show a profit?
    • is that profit sustainable?
  • Collateral
    • Tangible assets
    • property
    • equipment
    • Inventory
    • Collateral can be personal or business related
  • Capital
    • personal investment in the business
    • grants or gifts to fund business
    • how you are investing any profits
  • Conditions
    • Purpose of the loan
    • Amount requested
    • Length of loan
      • Working capital = 3 – 5 years
      • Furniture, fixtures, and equipment = useful life of the items
      • real estate = up to 25 years
    • Local economic climate of industry

In order to qualify for an SBA loan,  the borrower must be:

  • for profit
  • independently owned
  • legal resident
  • meet SBA size requirement

Disqualifiers include:

  • ineligible for financing
  • non-profit
  • money used to buy and sell real estate
  • pyramid sales
  • defaulted on federal government debt
  • probation, parole, or pending criminal charges

SBA Loans Programs

  • 7(a)
    • Maximum of $5 million
    • Fixed interest rate, but rate is negotiable
      • Less than 7 years = Prime + 2.25%
      • Greater than or equal to 7 years = Prime + 2.75%
    • Uses include working capital, inventory, line of credit, expansion/renovation, land, equipment/fixtures, or refinance debt for compelling reasons
    • Fees
      • Only on guaranteed portion of loan
      • Less than 1 year = 0.25%
      • Greater than or equal to 1 year
        • up to $150k = 2%
        • $150k – $700k = 3 %
        • $700k – $5m = 3. % + 3.75% per million
      • If in a HUB Zone, less than or equal to $150k = 0.06667%
      • Fees can be rolled into total loan and no prepayment penalty if less than 15 years
  • SBA Express
    • line of credit up to 10 years
    • Up to $350k = 50% guarantee by SBA
    • Rates
      • $50k or less = Prime + 6.5%
      • Greater than $50k = Prime + 4.5%
  • MICRO Loan
    • Maximum of $50k
    • No fees
    • Maximum of 6 year repayment
    • No real estate
    • Mandatory FREE pre and post loan counseling
  •  504 Loan
    • Primarily for real estate
    • Maximum of $5 million
    • Contribution breakdown
      • 50% of loan from the lender
      • 40% sold in secondary market
      • 10% put forward by borrower

If you have any questions about the SBA or any of the available loans, please reach out to Erika Pearson at 973-645-6160 or erika.pearson@sba.gov.  For a copy of the presentation, please visit https://www.njstatelib.org/wp-content/uploads/2019/04/SBA-Resources-and-Services.pdf.

Small Business Administration Resources and Services

Starting and maintaining a small business can be difficult without the right funding and help.  The Small Business Administration can provide small business owners with the tools and resources to help start and grow your business.  Please join us as Erika Pearson from the SBA will present resources and services the SBA has to offer new and existing entrepreneurs and small businesses. There are local resources available, for little or no charge, that offer training and counseling services developed to assist new and established business owners.  She will answer what SBA programs and loans are available as funding outlets that you may not have considered and can be used to start or expand a business.

Erika came to the United States Small Business Administration (SBA) with 30 years of lending background and a wealth of financial customer service experience.  She worked for the Internal Revenue Service (IRS) as a Taxpayer Advocate assisting taxpayers with resolving their IRS problems that they could not resolve on their own. Prior to the IRS, Erika worked in the private sector as a Wholesale Mortgage Account Executive for Chase Manhattan Bank, Santander Bankcorp, AIG, and PHH/Cendant Mortgage.  She assisted Bankers and Brokers with preparing and underwriting their residential mortgages for sale in the secondary market.

 

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Business Registration & Reporting Business Income Program Recap

Thank you to Solange Pimentel and Tilesha McCall from the Division of Taxation, Taxation University for their very informative presentation on how to register a business and report business income in New Jersey.

Starting a new business can be an overwhelming undertaking.  However, during this presentation Solange broke business registration into three manageable steps specific to the different types of business structures.  Tilesha continued the presentation by clearly defining the steps a business owner needs to take in order to report their income in New Jersey.  Focusing on the specific business goals of the attendees, both presenters emphasized the pros and cons of each type business structure.

Also discussed were organizations where individuals can get further business guidance and mentorship.  These include:

SCORE – Service Corps of Retired Executives – https://www.score.org/

SBDC – Small Business Development Center (NJ) –  https://njsbdc.com/

SBA – Small Business Administration – https://www.sba.gov/

 

For more information and resources about starting a business, see the NJ State Library’s Small Business & Entrepreneurship Research Guide:

http://libguides.njstatelib.org/smallbusiness

 

If you were unable to attend the program today, Taxation University offers this and other classes in libraries across NJ.  For their upcoming schedule, see the link below.

http://www.state.nj.us/treasury/taxation/sbwsched.shtml

 

For business related information and research assistance, please contact the NJ State Library Reference Services.

Leigh Clark, Business & Funding Information Librarian – Lclark@njstatelib.org or 609-278-2640

Business Registration & Reporting Business Income

As we continue to celebrate Money Smart Week, the New Jersey Department of Taxation, through their Taxation University, will be presenting their Business Registration and Reporting Business Income program at the NJSL.
This course will teach you about:

  • Different business structures
  • Registering a business in New Jersey
  • Legal entity vs. individual structured business registration
  • How to report your New Jersey business income

 

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Please indicate the classes you would like to attend by clicking on the appropriate box below.

*You must use Yes to answer the last question*