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Agency helping new entrepreneurs through boot camp, startup offerings

More offerings, less paperwork with SBA programs

The U.S. Small Business Administration (SBA) recently rolled out two new offerings to assist entrepreneurs with starting and running a business: boot camp and a no-collateral loan program.

Last week, professors, former business owners and established entrepreneurs revealed secrets of running a successful small business at a new, first-of-its-kind “business boot camp” training session, hosted by the SBA and the Alabama A&M University Research Institute (AAMURI) at the Hinds Community College Eagle Ridge Conference Center in Raymond.

The free three-day executive seminar was part of a pilot program initiated by SBA administrator Hector Barreto. On July 21, 2004, he announced that the SBA had awarded AAMURI a contract to conduct nationwide training for 1,500 small businesses participating in the SBA’s 7(j) Management and Technical Program to develop and compete effectively in the federal marketplace.

The training workshops were scheduled from September 2004 to March 2005 in a number of states, including Alabama, California, Georgia, Illinois, Mississippi, New Jersey, Texas and Washington, D.C. Most recently in St. Louis, the January 10-12 event attracted approximately 200 participants.

In Mississippi, session leaders covered management and marketing, accounting and financial management, and the legal aspects of owning a business, areas “which appear to have been identified as a critical area of need for most 8(a), 7(j) firms, HUBZone and other small businesses,” said Gary Reed, spokesperson for the SBA district office in Mississippi.

No collateral loans

The SBA added another resource tool for entrepreneurs last December when the district office partnered with several entities to provide very small loans, from $5,000 to $25,000, to start or grow their businesses.

“Often, loans of this amount are very difficult to obtain through conventional lenders,” Reed pointed out.

YO Inc, an educational non-profit organization and technical assistance (TA) provider for the SBA Community Express Loan Program, introduced the “no collateral, no business plan, and no tax returns required” program to 246 participants at a free December 9 conference at the Jackson State University E-Center Convention Hall in Jackson. Approximately 101 loan applications were received from the conference.

During the 10 months of fiscal year 2004 as a TA provider for the program, YO Inc. received 54 loan applications; 31% of the applicants received loans. The program goal for fiscal year 2005, which ends September 30, is to accept a minimum of 500 loan applications.

“Since October 1, 2004 to January 26, 2005, in the new fiscal year, YO Inc. has submitted 154 SBA Community Express Loan applications and 47% of those individuals have actually received loans,” said Sandra Edwards, executive director of YO Inc. “The main thing to remember is that this is a business loan. The lenders are looking for individuals in business that have decent credit and (are) homeowners. Individuals that have re-established credit after a bankruptcy are welcome to apply.”

To qualify, the applicant must have a business checking account. The funds are electronically transferred to that account, and will not be sent to a personal checking account.

“It is better to have the ‘printed’ business check; however, starter checks can be accepted if they have the bank’s information on the setup of the account,” explained Edwards. “We must document 100% ownership in each business and we require a face-to-face meeting to assure that you are who you say you are. In addition, it just works better and the process is shorter when the loan application can be completed ‘correctly’ at the session.”

Similar sessions were held in Roxie, Fayette and Greenwood in January, and additional conferences are being coordinated in Adams, Warren and DeSoto counties, said Edwards.
On Thursday, February 24, from 6 p.m. to 9 p.m. at the Vicksburg Convention Center, the Hinds Community College Small Business Development Center, along with Business Loan Express, is sponsoring a free Community Express Loan Program event.

“All for-profit small office, home-based or other small businesses seeking a business loan should attend,” stressed Reed.

The Community Express Loan Program is a pilot program established in June 1999 by the SBA and the National Community Reinvestment Coalition (NCRC), who were “equally committed to creating a program designed to spur economic development and job creation in untapped rural and inner city communities with venture capital, commercial loan credits and technical assistance,” explained Reed.

The program, which has expanded from nine banks in 20 locations to 500 lenders nationwide, provides an innovative approach to bringing SBA financing to areas where commercial loans have been difficult to obtain, said Reed.

“Technical assistance has been recognized by both the SBA and NCRC as crucial to the success of these businesses,” he said. “As a result, the Community Express program includes a specific technical assistance component. Borrowers must receive technical and management assistance from local non-profit providers and/or from participating lenders both before and after loan closings.”

Setting records

In January, the SBA reported that American small businesses set a record pace of borrowing to start and expand their companies over the first three months of the fiscal year, securing backing from the SBA on 23% more loans than in the same period the previous year.

During the first quarter of fiscal year 2005, the SBA, through its private sector lending partners, approved 23,197 loans for $3.56 billion under its flagship 7(a) guaranteed loan program, compared to 18,822 loans worth $3.12 billion in the same period a year earlier, and 13,759 loans worth $2.24 billion two years ago.

The SBA Mississippi district office approved 127 7(a) loans valued at nearly $15.37 million compared to 118 7(a) loans worth $26.48 million during the first quarter of fiscal year 2004.

“The heavy demand for SBA backing for guaranteed loans is gratifying,” said Barreto. “This tells me that American entrepreneurs are moving with confidence to start new businesses, build their companies, create jobs and grow the American economy. This program set an all-time loan volume record last year. We are well ahead of last year’s pace at this point, and under President Bush’s leadership, we will continue to make efficient, effective and dependable access to credit a cornerstone of our small business policy.”

By early March, Barreto will notify Mississippi’s Small Business Person of the Year in time to attend SBA Expo ‘05 in Washington, D.C., April 26-28. The Expo will mark the 42nd-annual commemoration National Small Business Week, showcase the winners from each state, and reveal the National Small Business of the Year.

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

About Lynne W. Jeter

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