Warning: getimagesize(): Filename cannot be empty in /home/blackenterprise/public_html/wp-content/themes/blackenterprise/single-standard.php on line 35
Each year the Small Business Administration hosts National Small Business Week, a three-day conference in Washington, D.C., to honor the hard work and perseverance of small business owners from around the country, highlight lenders and large corporate sponsors, and toot its own horn.
This year’s event, which is taking place this week from May 17-19, featured a series of forums on such issues as the challenges of operating in a tough economy, innovation and technology, and using social networking sites as a business tool. There was also the small business awards in which five African Americans took the top spots.
It was also an opportunity for the more than 400 attendees to hear from Karen Mills, the SBA’s new administrator. In a keynote address delivered Monday morning, Mills announced details of a new temporary loan program, America’s Recovery Capital, which will provide short-term, interest-free loans of up to $35,000 to cover principal and interest payments on non-SBA debt, such as mortgages; term and revolving lines of credit; capital leases; credit cards; and vendor, supplier, and utility bills.
The funds will be disbursed within a period of up to six months and repayment will begin 12 months after the final disbursement. Following a 12-month deferral period, borrowers will have five months to repay their loans.
“ARC loans are for viable businesses, meaning that the business must have an established history of good performance, but they are in a situation where they need a bridge over the troubled waters,” said Mills. Detailed guidance for lender training will be released by June 8, and the SBA will begin accepting loan packages from them by June 15.
Anthony Wilkinson, president and CEO of the Oklahoma-based National Association of Government Guaranteed Lenders, recommends that both borrowers and lenders will need to act in haste if they want to participate in the ARC loan program, and provided a guesstimate that the funds could be depleted within 90 days.
In addition to touting the ways in which the SBA has utilized the Recovery Act to increase small business lending and making its loan programs more attractive to financial institutions who’ve begun to increase their participation in the programs, Mills also cited ways in which the agency needs to improve. She said that the SBA is “gearing up for big changes,” and is working on plans to automate old paper-based systems and boost data transfer speeds to streamline the approval process, and is developing a new Web portal and customer database. Staff training, particularly for federal procurement officers, will also be a big priority, Mills said.
One African American entrepreneur, who did not want to be named, said that staff training is desperately needed and inadequately informed procurement officers contributes greatly to the agencies ongoing dysfunction, which in turn hinders the efforts of minority businesses to win contracts.
“There’s a serious issue going on with procurement, so even though we have the vehicles, the technology and technical know-how, we still have difficulty getting government contracts,” he said. “Having people at the top who are providing guidance and oversight without understanding how acquisition works, is applied and implemented, creates a dynamic problem.”
Riding Out the Tough Economy
At a forum on successful business strategies in a tough economy, attendees seemed to prefer to ask questions about how they can tough out the economy than offer solutions. SBA representatives urged entrepreneurs to take advantage of the agency’s Small Business Development Centers located around the country and other tools, such as SCORE business counseling services, advising that they can provide valuable technical assistance at various stages of their growth, not just when they’re starting out.
One entrepreneur pointed to adaptability as key business strategy. Her company produces skin therapy moisturizers that she realized were selling better in farm stores than in pharmacies.. Seeing an opportunity to market her product in such hardware stores, she contacted Lowes but was told “Great product, we love it, but we can’t sell hand cream in a hardware store.” Realizing that the real problem was the packaging, she used an SBA loan to redesign it to enhance its visual appeal to gardeners and others who work with their hands. Today the product is sold in a number of hardware outlets, such as Lowes and Ace. “It all came back to adaptability,” she said.