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    9 Replies Latest reply on Mar 24, 2013 1:25 PM by Moderator Berta

    SBA - a waste or not?

    Jeff Fisher Wayfarer

      Without being to sarcastic, why do we have an SBA in the first place? Seems to me that all this agency is good for is shuffling information around and re-branding it as if they created it. I can find all the same useless information on most banks and lending institutions websites. What I cannot find is an accurate follow through with any of those facilities often referred to that really does provide start up or capital loans to small to medium size businesses.

        • Re: SBA - a waste or not?
          deltacredit2013 Adventurer

          SBA is definitely not a waste.  There are several programs that SBA supports that helps start ups that banks will not support.  SBA guarantees the loans for the banks and minimizes risk of exposure- not just educate you on how to get a loan.  It first starts with having a lender that is familiar with the different SBA products- not all banks are "preferred lenders", and not all banks carry the same products.  My suggestion is get with a business banker that knows what they are doing.  Keep in mind, you are still going to have to be lendable- good credit scores, low debt-to-income, low debt-to-credit.  Secondly, there may be a need for collateral.  As a small business, you are a big risk- regardless of how wonderful you think your product is.  You are going to have to appeal to a lender's appetite, and you are going to have to sign as a guarantor.

          • Re: SBA - a waste or not?
            koln123 Tracker

            The SBA does, over the course of a year, make many significant loans to businesses throughout the country.  This is cause enough for considering the SBA not to be irrelevant, not to mention there are very limited alternatives out there for start up, or larger loans.  As mentioned by another poster, the SBA only guarantees the SBA loans which banks make on the SBA's behalf.   This is the logical reason banks have similar paperwork.  They are the agents acting for the SBA by making loans based on guidelines the SBA has established.  There is an SBA region for every region of the country.   Anyone interested could contact their SBA regional office and ask which lender they would recommend at this time.  The SBA representative at the regional office should be interested in providing the most up to date information on which lenders currently are closing the most loans.  This would be useful information to a prospective borrower.   When one approaches a bank to inquire about an SBA loan, they need to being speaking with the SBA representative at the outset.  If they deal with an intermediary at the branch that does not deal with these loans, that can certainly be a reason for the process getting bogged down and quite unclear. SBLD

              • Re: SBA - a waste or not?
                Jeff Fisher Wayfarer

                First, I would like to know which part of my posting has everyone ASSUMING that I did not get financing or start my business? Just because I referenced that I could not find specific information on financing should not give raise that my company failed or never got off the ground in the first place.  Second, what I am reading is just cut and paste responses that mimic the wastefulness of the SBA.

                 

                "The SBA representative at the regional office should be interested in providing the most up to date information on which lenders currently are closing the most loans.  This would be useful information to a prospective borrower."

                 

                In the above caption, the optional phrase is "should be interested".... However, like most wasteful [yet permanent government employees], SBA representatives are only interested in themselves and their situations. If they took a 4-year degree program in just customer service, they would still fail in their current line of employment.  I see no real benefit to having this agency around. What lobbying pull to they really have? None, what strong arm tactics can they exercise to have a lender rethink their processes or to advocate for a small business person? None, and if they do have these things the representatives you deal with do not know about them nor are they willing to actually perform these functions.

                 

                I received more real-life useful information and development ideas [and resources] from banking professionals simply by walking in their office and politely asking for 10 minutes of their time.  By-passing the SBA [once I realized how worthless they really are to the other 98%] I gained more ground by far than if I had stayed the course and tried getting "guidance" from SBA.

                 

                Unless someone can convince me [and any reader I suppose] that SBA and the banks only use their joint process [whatever that really is] to do nothing more than rack up statistics please have coffee with me and tell me how.  I will expense to my company as business meeting....[that was a joke to ease any tense moments while reading this].

                  • Re: SBA - a waste or not?
                    Moderator Jim Ranger

                    Thank you to everyone who has taken part in this tread! Please keep the replies coming!

                     

                    Jim

                    • Re: SBA - a waste or not?
                      YesYouCan Scout

                      The real value of the SBA in getting a loan is that they guarentee the loan.  Most banks have no interest in making loans to very small (risky) or start-up businesses and such a business has little or no chance of getting a loan without some help.  That is where the SBA comes in - they work with "preferred lenders" to offer loans to some small businesses they otherwise would not lend to.

                       

                      Yes. there are requirements you will have to meet - in addition to the usual ones from the bank - but it can help get the loan.

                       

                      My suggestion - contact SCORE (www.score.org) and then link to your socal SCORE chapter and request a Counselor to help you secure SBA guarenteed financing.  Most Chapters have at least one Counselor who is very familiar with the SBA programs and knows which local banks offer SBA loans.  This person usually also has a personal relationship with the bankers and can help you prepare your financing request and introduce you to the banker.

                  • Re: SBA - a waste or not?
                    Uncle Leon Tracker

                    First, Jeff....please calm down.  No one has made a personal attack on you.

                     

                    The previous comments concerning the SBA loan guarantee programs are "right on".  But the SBA is more than that.

                     

                    One program that i'm personally familiar with is the SCORE program, which is sponsored by the SBA.  SCORE can be thought of as the small business counseling 'arm" of the SBA.  SCORE provides free counseling for small businesses; workshops at a very low (or sometimes no) cost.  And help for businesses which are any where from pre-start-up to mature and expanding.

                     

                    Having served SCORE as a business counselor, workshop instructor, team leader, and Vice-Chairman,  I will be the first to admit that many counsutations do not provide the results hoped for by the apoplicant.  But that's when you can simply ask to consult with a different counselor.

                     

                    Each Counselor brings different experiences to "the table".  There's nothing wrong with seeking the advice from multiple counselors.  And, considering that this service is free.....If you're not satisfied, you can always ask for a refund.  

                      • Re: SBA - a waste or not?
                        Jeff Fisher Wayfarer

                        I do not need to calm down, I'm not upset and I have not taken any comment personally. If there is an impression I did, I will apologize for any misreadings someone has. Partial problem with typing thoughts and not meeting people face to face which is fast becoming a dying form [and the original] of social media I guess.

                         

                        The issues I am having that makes me fall back on my original question; "SBA - a waste or not" is simple what Uncle Leon just typed.  "counseling", "advice", "workshops", etc.  The lenders that I have been dealing with along with news articles from Forbes and others that have taken up most of my time offer all this and not at tax payers expense.  Several Micro Lenders offer, and actually insist on applicants attending their workshops which are offered free before approving you for their loans.

                         

                        What I am more interested in knowing is what happened to the "neighborhood" approach. Or like Uncle Leon and I were just discussing, "face to face" "hand shake to hand shake" approach. Making the process at these lenders more of a partnership rather than a negotiation between UN members.  I have not attended one meeting or sat in on one SBA sponsored event that showed me that SBA was worth their funding and place as a US Government agency.

                         

                        Here's an example, and I do not mind sharing this information but keep in mind that my business is up and running so I am not crying over spilled milk or taking my ball and going home.  I'm 40-whatever, married with older children. Own two homes, one in Ohio and one in Virginia. Credit score is 720 currently. No negative comments and no inquiries for over 1 year.  One house is 100% paid off and currently market value [appraised] $375,000.00, no outstanding or revolving debt more than 900 bucks average.  All three cars the family uses are paid off. No bankruptcies and not collection [and no judgements ever].  Three banks, two micro lenders and one friend later --- guess who loaned me the money....

                         

                        The reason this is relevant now is, I want to expand my business and get sick to my stomach knowing I have to go through this all over again.  I am not going to ask my friend a second time, I'm sure you'll understand that even though I paid him 4.5% interest and he was made whole within 18 months I do not want to dirty our friendship by giving him the impression that I think he's a cash cow or my golden goose.

                         

                        A thank you to everyone for posting and discussing. I really do appreciate it and if you are reading too much of a "tone" please ignore it. It is not my intention. Thanks. Jeff

                          • Re: SBA - a waste or not?
                            YesYouCan Scout

                            Jeff,

                             

                            Your local SCORE representative will shake your hand, and I'll bet he (or she) will introduce you to a local bank that does SBA loans who will shake your hand.

                             

                            Good luck with the expansion - here's to your success.

                              • Re: SBA - a waste or not?
                                Ranger

                                This is exactly what this community is built for . Good exchange of ideas. Of course we won't always agree with one another . I have learned a lot , and I'm sure others have too .  Thanks everyone

                                 

                                Joleen

                                  • Re: SBA - a waste or not?
                                    Randy Adventurer

                                    After reading this thread I went to the SBA and local SCORE websites and browsed around.

                                     

                                    The SBA is not a waste, the purpose of all governments around the world, past and present, is to facilitate a productive and economically viable community, and in my opinion, that's what the SBA and SCORE do.

                                    Sure there is red-tape, but that's how governments operate....

                                      • Re: SBA - a waste or not?
                                        Uncle Leon Tracker

                                        RE:  Loans

                                        Lending money is a business.  It's great when a bank can contribute to the success of a local small business, and to grow the community, but that's not the goal of the bank.

                                         

                                        The goal of a bank (or any other "for profit" business), is to make a profit.  That's the goal of a bank.  And, that's the banks duty to it's stock holders.

                                         

                                        If a business has a solid record of good business management, continued growth, and a sound Biz plan to show how the funds they are seeking are a sound investment; THAT'S the ideal borrower a bank is looking for.

                                         

                                        If a banker (or a reviewing board) believes that a loan to a prospective borrower MIGHT be on shakey ground, they will not approve a loan.  IT takes many good loans to make up for one bad one.

                                         

                                        A business may need to apply to more than one bank to have their application approved.

                                         

                                        Sometimes, ya gotta kiss a lotta frogs before you find your Prince.

                                          • Re: SBA - a waste or not?
                                            Randy Adventurer

                                            ....Right, and the mind set of big bankers and the 'globalist' for that matter is, they say they have to be prudent to who they lend money to because they don't want to   misappropriate scarce resources,  they think their doing 'god's work'.  I get all that, and lets remember when a central bank buys government bonds they create the money or 'digits on a screen'  on their keyboard, it's all fantasy digits anyway, but over the decades the ruling class has convinced the common people of the world to go work and do labor while the 'internationalist'

                                            tell people around the world..." your spending too much you need austerity "  or the shenanigans  that are going on in  Cypress....

                                • Re: SBA - a waste or not?
                                  Moderator Berta Guide

                                  Great exchange of thoughts and opinions everyone. Thanks for participating and sharing your knowledge and experiences with all of us.

                                   

                                  ~Berta