In a newly released announcement, the Small Business Administration (SBA) has expanded their Microloan Program (up to $35,000) for small businesses in America. Based upon previous experience (see How Successful is the SBA ARC Loan Program?), how this will impact your business is yet to be seen. Yet it is good news to some small businesses in some places. In other related SBA news, the Obama Administration just reaffirmed its commitment to ensuring that minority-owned and small businesses, including women and veteran-owned businesses, have greater access to federal government contracting opportunities.
SBA Micoloans
With the American Recovery and Reinvestment Act funding an additional $50 million for loans and $24 million for technical assistance, the SBA is expanding its Microloan program and increasing access to capital for small businesses across the country.
The program is shifting to funding provided under the Recovery Act now that it has exhausted the regular FY 2009 appropriations for $20 million in loans and $20 million in technical assistance.
With the additional resources, SBA is focused on adding new lenders and encouraging entrepreneurs to seek out SBA-backed Micro-lenders to finance their businesses.
“SBA’s Microloan program provides a critical source of capital for entrepreneurs, including women, low-income individuals and minorities, who often have difficulty obtaining capital to start and grow their businesses,” said SBA Administrator Karen G. Mills. “With these resources, we can put more entrepreneurs and small business owners in a position to succeed and create jobs that will in turn help drive our nation’s economic recovery.”
Since the Recovery Act, SBA has approved eight new applications from lenders to join the Microloan program, and has 15 new loans to Micro-lenders for $10.7 million in Recovery Act funds ready to be disbursed. Of the 15, eight are for new Micro-lenders.
The approved new Micro-lenders are:
- Vermont Community Loan Fund, Inc. of Montpellier, VT
- Neighborhood Development Center of Saint Paul, MN
- Cen-Tex Certified Development Corp. of Austin, TX
- The Emperor Organization of Tallahassee, FL
- Staunton Creative Community Fund, Inc. of Staunton, VA
- Lane MicroBusiness (d.b.a. eDev) of Eugene, OR
- FINANTA (American Street Financial Ser.) of Philadelphia, PA
- Accion USA, Inc. of New York, NY
SBA’s Microloan Program supports Micro-lenders by providing them with up to $3.5 million in low-cost loans from SBA to finance their lending to small businesses. SBA’s interest rate to Micro-lenders is based on the five-year Treasury rate, with adjustments tied to a Micro-lender’s average loan size.
Micro-lenders use the SBA funding to provide loans of up to $35,000 to entrepreneurs, which can be used for working capital and acquisition of materials, supplies, furniture, fixtures and equipment.
I just learned that the SBA also provides grant funding to Micro-lenders to finance technical assistance and counseling programs for their borrowers, including staff, classroom training and occupancy costs. SBA’s reimbursement is capped at 25 percent of the Micro-lender’s outstanding SBA loan portfolio.
For more information on Microloans, you can check out the SBA website.
Access To Federal Government Contracts
In other related SBA news, the Obama Administration reaffirmed its commitment to ensuring that minority-owned and small businesses, including women and veteran-owned businesses, have greater access to federal government contracting opportunities.
To that end, commerce Secretary Gary Locke and Small Business Administrator Karen Mills announced a government-wide plan that includes federal agency procurement officials holding or participating in more than 200 events over the next 90 days to share information on government contracting opportunities, including those available under the American Recovery and Reinvestment Act.
“Small and minority-owned businesses must play a significant role in our efforts to restore economic growth. Small businesses employ half of the nation’s private sector workforce; create a large share of the Nation’s new jobs; and introduce many groundbreaking ideas into the marketplace,” President Barack Obama said. “It is essential that we provide our Nation’s small businesses with maximum practicable opportunity to participate in Federal Government contracting.”
Obama went on to say, “In order for the Federal Government to better meet or exceed the goal of 23 percent of prime contracts for small businesses, Vice President Biden and I have tasked Small Business Administrator Karen Mills and Commerce Secretary Gary Locke with leading a federal government-wide initiative to increase outreach,” Obama continued. “Over the course of the next ninety days agency officials will take an important step forward by holding or participating in more than two-hundred events focused on sharing information on government contracting opportunities.”
Vice President Joe Biden reinforced the message by stating, “In these tough economic times, the Recovery Act is providing billions of dollars in opportunity and incentives to help businesses grow – and the President and I are committed to ensuring that small and minority-owned businesses are part of our economic recovery every step of the way. By taking advantage of the expertise of an array of companies, we are going to be able to build a stronger, more secure foundation for long-term economic growth.”
Commerce secretary Gary Locke had this to say, “It has been a priority from day one of this administration to ensure that small and minority-owned businesses are aware of and have access to federal contracts and funding opportunities. Over the past 40 years, minority-owned businesses have grown from 300,000 to nearly 4 million today. Their success and the success of small American businesses are vital to our economic recovery.”
“Government contracts can play a key role in helping small businesses turn the corner in terms of expansion and job creation,” said Small Business Administrator, Karen Mills. “But make no mistake, the benefits the government receives are equally as impressive – working with small businesses allows the federal government to work with some of the most innovative companies in America – with a direct line to CEOs.”
As part of the Commerce-SBA initiative, over the next 90 days:
- Federal agency procurement officials will hold or participate in more than 200 events to share information on government contracting opportunities, including those available under the American Recovery and Reinvestment Act.
- SBA and Commerce will expand their outreach to fellow contracting officials across the federal government, passing along best practices for outreach and education to every agency to ensure they have the tools they need to meet their annual contracting goals.
- Gary Locke and Karen Mills will promote small business contracting opportunities in their remarks, events and discussions with small business groups across the country, including minority, women and veteran groups.
Beyond the next 90 days, Commerce and SBA will support, monitor and track the impact of these efforts going forward to help ensure the Administration is maximizing opportunities for small businesses.
Small business owners can find out about federal contracting opportunities by visiting www.fedbizopps.gov . Local Commerce and SBA officials are also available in local offices across the country to assist small businesses interested in contracting opportunities. Contact information for local offices can be found www.commerce.gov and www.sba.gov.
Those that enjoyed this, also enjoyed:
How Successful is the SBA ARC Loan Program?
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If you would like to contact me, you can do so by emailing me at mike.clough@bestbizpractices.org or visiting my LinkedIn page.
Posted by: Mike Clough
