with the Small Business Administration
From backing small business loans to encouraging
outreach and mentoring for underserved entrepreneurs, we
look at the many programs offered by the U.S. Small
BY GLENNIS MCCLURE, REAP
WOMEN'S BUSINESS CENTER DIRECTOR
Members and clients of REAP are fortunate that we have a
good working relationship with the Small Business
Administration (SBA). We’ve worked directly with SBA’s
Microloan Program for several years. REAP is in the
second year of a cooperative agreement with the SBA for
our Women’s Business Center project.
The SBA has been integral to making REAP’s work possible
across Nebraska. In addition to being an excellent
resource for REAP, they have several financial
assistance and entrepreneurial development programs that
small business owners and managers can use.
SBA’s Microloan Program has been used by REAP for many
years. Under this program, SBA makes funds available to
nonprofit intermediaries, who make loans directly to
While REAP has used a variety of loan sources to make
both our peer and direct loans, the SBA Microloan
program has provided the majority of our loan capital.
We closely follow the policies and guidelines of the SBA
in operating our microloan program, regularly reporting
loan data and program information.
Loan Guaranty Programs
SBA’s loan guaranty programs provide a key source of
financing for prospective and current small businesses
that have real potential, but cannot qualify for loans
from traditional sources with the terms they need. There
are three principal players in an SBA-guaranteed loan –
the small business borrower, the private lender, and the
First, the private lender determines whether a
borrower’s application is acceptable. If it is, the
lender forwards the application and its credit analysis
to the SBA. After SBA review and approval, the lender
makes the loan and disburses the funds to the borrower,
who then makes payments to the lender.
SBA loan guaranty programs and requirements are listed
on the Quick Reference sheet inserted in this
newsletter. Also you may read more about each of the SBA
loan programs in detail on the web at
Loan programs commonly used in Nebraska include the 7(a)
Loan Guaranty Program, the LowDoc loan guaranty, and the
SBA Express loan. The 7(a) Loan Guaranty Program is the
SBA’s basic loan program.
To qualify for an SBA guaranty, a small business owner
must meet the eligibility criteria, and the lender must
certify that it could not provide funding on reasonable
terms except with an SBA guaranty. The SBA then
guarantees 85 percent on loans of up to $150,000 and 75
percent on loans of more than $150,000.
LowDoc is one of SBA’s most popular programs. Once you
have met your lender’s requirements for credit, LowDoc
offers a simple, one-page SBA application form and rapid
turn-around on approvals for loans up to $150,000.
Express Loans Growing
Participation in SBA’s Express loans has been limited
during a pilot period; however the Nebraska SBA District
office has recently been working to expand its network
of Express lenders.
Express lenders are designated by SBA. See the web at
http://assist.neded.org/sbalendrs.html for a list of
all of the SBA Nebraska Express lenders.
This program allows lenders to use most of their own
forms, analysis, and procedures to process, service, and
liquidate SBA guaranteed loans. Fifty percent of a loan
up to $250,000 is guaranteed by the SBA on the Express
Loans under $25,000 do not require collateral. Like most
SBA guaranty loans, maturities are usually up to 7 years
for working capital, generally up to 10 years on
equipment, and up to 25 years for real estate. Revolving
lines of credit are allowed for a maximum of 7 years in
the Express program.
Women’s Business Centers fall into the Entrepreneurial
Development category of SBA’s work. The REAP Women’s
Business Center (WBC) program serves as a catalyst for
enhancing the participation of women entrepreneurs in
the rural Nebraska economy.
Funding from the SBA for REAP’s WBC helps us do more
outreach to women, especially through REAP’s Basic
Business Plan and eCommerce trainings across the state.
The sponsorship of women in business roundtables and the
Online Women’s Business Center on the Internet (
) are other examples of services targeted to women
business owners by SBA.
Executive Mentors Available
Service Corps of Retired Executives (SCORE) is a
volunteer association sponsored by the SBA. SCORE
matches volunteer retired business owners or managers to
new or existing small business owners who request
management counseling and training. SCORE volunteers
help prospective and established small businesses
identify problems, then help find solutions.
Communities across Nebraska have active SCORE chapters.
More information and a list of SCORE chapters nearest
you may be found at www.score.org or you may call the
SBA/SCORE Business Information Center in Omaha at
The Business Information Center in Omaha works in
conjunction with the SBA District Office and SCORE to
provide many small business planning tools, such as a
computer lab and applicable business software and an
extensive business reference library.
Nebraska Business Development Centers (NBDC) is a
cooperative program of the SBA and the University of
Nebraska at Omaha (UNO). Business consulting,
educational services and assistance in preparing loan
applications may be obtained at an NBDC. More
information about this program may be found at:
Government contracting assistance is available by
experts at the SBA. The SBA has a number of programs to
help small firms do business with the federal
Working closely with federal agencies and the nation’s
leading large contractors, the SBA works to ensure that
small businesses obtain a fair share of government
contracts and subcontracts. Dwight Johnson
(firstname.lastname@example.org ) in the SBA Omaha District
office is the Iowa and Nebraska SBA Procurement Center
SBA Cooperates with Others
REAP values the opportunity to partner with many
resource providers to help our members/clients. Regional
training opportunities for current and future small
business owners are only possible with the cooperation
of many. An example is the “How to Start and Grow Your
Business” seminar recently offered at the community
college in Norfolk.
REAP partnered with the Norfolk Area Chamber of
Commerce, Nebraska Workforce Development, Nebraska
Business Development Center, and several SBA personnel
to put on the program.
Please keep in mind as you plan your REAP association
activities and program for 2003 that SBA Nebraska
District office personnel may be available as speakers.
Let your REAP Business Specialist know about your ideas
and needs, and we’ll put you in touch with the right SBA
Reference: Nebraska Small Business
Resource Guide, 2002 Edition. Your Guide to Starting,
Building or Expanding a Small Business. Courtesy of the
Nebraska District Office of the U.S. Small Business
Administration and RENI Publishing.