The Small Business Administration (SBA) has announced that this year’s National Small Business Week 2018 will be held from April 29 – May 5.
SBA Administrator Linda McMahon will start the week in Washington, D.C., where she will recognize and award outstanding small business owners and resource partners – including partner banks that process SBA loans– from all around the country. McMahon will continue the week with a bus road show starting in Jacksonville, Florida, and then continue on to South Carolina and North Carolina. At each stop she will meet with small business owners, visit small businesses and hold roundtable discussions.
Additionally, virtual events, recognition and educational opportunities throughout the SBA’s 10 Regions and 68 Districts will be held throughout the week. Further, the SBA will hand out awards to exemplary entrepreneurs and lenders to small businesses. During the 2018 National Small Business Week, the following awards will be given:
- Small Business Person of the Year (one from each of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam)
- Small Business Exporter of the Year
- Phoenix Award for Small Business Disaster Recovery
- Phoenix Award for Outstanding Contributions to Disaster Recovery, Public Official
- Phoenix Award for Outstanding Contributions to Disaster Recovery, Volunteer
- Dwight D. Eisenhower Awards for Excellence (for large prime contractors who use small businesses as suppliers and contractors)
- Jody C. Raskind Lender of the Year
- Small Business Investment Company of the Year
- Awards to SBA Resource Partners
- Small Business Development Center (SBDC) Excellence and Innovation Center Award
- Women’s Business Center of Excellence Award
- Veterans Business Outreach Center Excellence in Service Award
Every year since 1963 the SBA takes the opportunity to highlight the impact of outstanding entrepreneurs, small business owners, and others from across the nation through National Small Business Week.
The SBA was established by President Eisenhower during the 1950s to aid, counsel, assist and protect the interests of small business concerns and to strengthen the overall economy of the United States.
The agency has processed more than 20 million loans since its inception, although it does not lend on its own. Instead, SBA guarantees a percentage of a loan amount that a lending partner makes. This mitigates the risk assumed by the lending institution, thereby making the loan more attractive. By doing so, the SBA spurs the flow of capital to small firms that might not otherwise be able to secure financing at reasonable rates. Often the borrowers are new and growing companies that have not yet developed a track record of repayment and are not financially strong enough to obtain traditional term loans from banks without the government backing.
Small business lending via SBA loans is important for community and regional banks, which face increased competition from larger banks and non-bank lenders, including institutional investors, hedge funds, pension funds and others that have gotten into small business lending credit marketplace. Meanwhile, borrowers benefit from being able to obtain financing at attractive rates and terms.
Aspiring entrepreneurs, including women, minorities, and veterans, are taking advantage of the SBA’s 7(a), CDC/504, Microloan and Community Advantage loan programs in record numbers. In 2016, the SBA approved more than 70,000 loans totaling almost $29 billion through the 7(a) and 504 loan programs, according to the agency’s Fiscal Year 2016 filing.
The SBA’s 7(a) lending program, which grants loans between $150,000 and $5 million to small businesses, provides funding for business acquisitions, operations, or expansion. Fees, interest rates and terms of the loan are negotiated by the borrower (small business owner) and one of the SBA’s approved lenders.
What makes SBA 7(a) loans so popular is that they require lower down payments and provide longer term financing. This can be particularly helpful to startups and firms that are looking to expand or that need to improve their cash flow situation. Securing capital enables on operations and business growth instead of the repayment of debt. SBA 7(a) loans require submission of the last three years of business tax returns and two years of personal tax returns on all principals having a 20 % stake or more in the company.
SBA Express loans are made in amounts up to $350,000 and are used for working capital or for buying equipment. Loans of $100,000 or less do not require any proof of income. However, loans for amounts greater than $100,000 require last two years of business and personal tax returns from principals having more than 20% stake in the company.
SBA CDC/504 loans offer long-term fixed rates and are used for financing assets including real estate and equipment. The small business borrower must occupy at least 51% of the real estate property a. To be considered for a Certified Development Company/504 loan, applicants must meet certain eligibility requirements.
In addition to processing loans, the SBA also offers training and mentoring programs for free or at greatly reduced costs. Further, the agency provides guidance for companies looking to become suppliers to the federal government, which requires that a certain amount of government contracts must go to women-owned and minority-owned businesses.