Monday, August 5, 2019

Small business disaster relief loans available for February flood damage - The Mountaineer

Small business disaster relief loans available for February flood damage - The Mountaineer


Small business disaster relief loans available for February flood damage - The Mountaineer

Posted: 04 Aug 2019 10:00 PM PDT

The U.S. Small Business Administration (SBA) is encouraging businesses of all sizes, private nonprofit organizations, homeowners and renters to apply for a disaster loan for physical damage before the Aug. 20 deadline. Anyone in the declared counties with damages caused by severe storms and flooding on Feb. 6-24, 2019 should apply for the SBA disaster loan assistance.

The declaration covers the following counties: Decatur, Hardin, Humphreys, Perry and Sevier and the adjacent counties of Benton, Blount, Carroll, Chester, Cocke, Dickson, Henderson, Hickman, Houston, Jefferson, Knox, Lewis, McNairy and Wayne in Tennessee; Lauderdale in Alabama; Alcorn and Tishomingo in Mississippi; and Haywood and Swain in North Carolina.

Businesses and nonprofits can apply for up to $2 million to repair or replace disaster-damaged real estate, machinery, equipment, inventory and other business assets. Loans for working capital, known as Economic Injury Disaster Loans, are available even if the business did not suffer any physical damage. Homeowners can apply up to $200,000 to repair or replace disaster-damaged real estate. Homeowners and renters can apply up to $40,000 to repair or replace damaged personal property including automobiles.

Interest rates are as low as 4 percent for businesses, 2.75 percent for private nonprofit organizations, and 2.063 percent for homeowners and renters, with terms up to 30 years. The SBA determines loan amounts and terms based on each applicant's circumstances.

Applicants may be eligible for a loan amount increase up to 20 percent of their physical damages, as verified by the SBA for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter, sump pump, French drain or retaining wall to help protect property and occupants from future damage caused by a similar disaster.

Applicants may apply online using the Electronic Loan Application (ELA) via the SBA's secure website at DisasterLoan.sba.gov.

Additional details on the loan application process can be obtained by calling the SBA Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov. Loan applications can also be downloaded at www.sba.gov. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

The filing deadline to return applications for physical property damage is Aug. 20, 2019. The deadline to return economic injury applications is March 23, 2020.

Trump's Small Business Administration pick will have her work cut out for her - The Guardian

Posted: 04 Aug 2019 03:00 AM PDT

This week, Donald Trump announced his intention to nominate Jovita Carranza as the new chief of the Small Business Administration (SBA), replacing Linda McMahon, the former pro-wrestling mogul who stepped down in March.

Carranza is certainly qualified. She's the US treasurer, an adviser to the treasury secretary, Steven Mnuchin, and previously served as deputy administrator at the SBA. Before that she was a vice-president at United Parcel Services (UPS). The change in leadership, however, brings up a recurring question: is the SBA even worth it any more?

Yes, it is worth it. But Carranza has her work cut out for her.

The agency – which has close to 70 offices and 3,000 employees – eats up about $834m in taxpayer money a year. It suffers from a severe lack of awareness among the small business community and faces regular threats of elimination, or at least consolidation into the Department of Commerce. Sure, Carranza will join the president's cabinet, but let's be real here: she has no influence. The position is just a shoutout to small business voters.

Her real job is to take an agency which already does great work and make it better. The SBA needs some big changes. It could be doing more – a lot more.

For example, the agency should refocus on the type of small business that it serves. There are about 30m "small" businesses in this country, but only a third of them, at best, employ people. The SBA can't serve them all. Should efforts and resources be focused mainly on startups? Existing businesses with employees? Freelancers? Minority-owned? Distressed firms? Retailers? Restaurants? Rural? All of these companies have their own unique needs, depending on their maturity, the economy, where they're located and a bunch of other factors. You don't have to exclude any businesses, but the agency would do a better job if it changed its mission to help "all" small businesses and instead zeroed in on a specific type of business it wants to help in order to get a bigger bang for the taxpayer buck.

Banks need to be better incentivized to provide SBA-backed loans. Last year was a banner year for financing, with the agency guaranteeing more than $30bn in bank loans – an impressive number. But the businesses getting these loans are the types of businesses that banks normally lend to anyway with financial history and collateral. That's why, according to the most recent Pepperdine Private Capital Index, only 31% of small businesses were able to get bank financing last quarter. So what about the 69% that couldn't?

Only some banks offer SBA-guaranteed loans, and whenever I speak to these bankers they complain about the paperwork, the bureaucracy and the fact that they're still on the hook (about 15%) if things go belly-up. Even with the backing, they still avoid higher-risk ventures. To fix this, the SBA should not only guarantee loans but offer more compensation to banks who extend them – maybe even revisiting the percentage guaranteed. The goal here is to further reduce the banker's risk while increasing the incentive to market SBA loans. In addition, these loans should be far superior (lower rates, less collateral or faster approvals) to a typical loan so that banks have no other choice but to promote them. And even more banks should be encouraged (or possibly be required) to offer them.

The agency should step up its efforts to expand partnerships with corporations with the objective of offering more and better educational resources. Yes, the SBA does sometimes partner with corporate America, but it's not enough. Companies such as Microsoft, Amazon, UPS and Facebook – just to name a few – have tons of money and resources. They can provide much-needed funding as well as experts to expand the SBA's educational offerings so that small businesses can really learn more about technology, internet search, social media, marketing, logistics and a number of other things that fall on our shoulders. These companies are eager to build relationships with small businesses and would welcome an expanded partnership – and the credibility it brings – with the SBA.

Finally, the SBA should brand itself as the government's customer service arm for small businesses. Problem with the IRS? Need help with a tariff question? Don't understand contracting requirements? The agency already offers helpful resources on these matters – and many others – for small businesses. It's just that most of my company's 600-plus clients don't even know about them! It's a branding and awareness issue. If I have any problem or question related to the federal government I should be familiar with the toll-free number that's manned by a trained SBA expert that will either help me get this resolved or know who can resolve it for me.

So yes, the Small Business Administration is definitely worth it. But as much as the SBA does, the agency really hasn't changed much in its strategy, branding and activities over the past few decades. I hope that Carranza realizes the need to pivot. Not just because it's good for small businesses, but because the agency's survival may depend on it.

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