The SBA Could Do It Better
According to Sharon McLoone, small business writer for the Washington Post, the SBA's 8(a) Loan program has a good heart but terrible communication abilities. The program was designed to help small firms gain access to federal contracting opportunities. In fact, the federal government is supposed to appropriate 23% of its total contract dollars to small businesses, a goal they have yet to achieve.
Some of the issues that have been identified as challenges with 8(a) include:
- A general lack of understanding about the program's purpose and requirements
- An SBA staff with the diminished ability to conduct business development activities
- An inefficient process of terminating firms
- A lack of routine program surveillance reviews
How to Borrow from the SBA
The Small Business Association is still a solid option for garnering the capital funding you need to get your business off the ground. Here's how to get the ball rolling with the SBA.
Documentation. Purpose of the loan, history of the business, financial statements for three years, schedule of term debts, aging of accounts receivable and payable, projected opening-day balance sheet, lease details, amount of investment in the business by the owners, projections of income, expenses and cash flow, signed personal financial statements and personal resumes.
Submit. All materials to a local lender first. If they’re unable to extend a commercial loan offer, ask if they can pass your information to the SBA under the loan guaranty program. This will meet your needs up to about 85% of your original request.
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