Tag Archives: SBA

A Guide to Applying for a Bank Loan

Wells Fargo No. 1 SBA lender for Arizona

Wells Fargo & Company announced it is the No. 1 Small Business Administration (SBA) 7 (a) lender in Arizona in amount of dollars and number of loans  approved for fiscal year 2014.  Wells Fargo approved $89,034,400 and 197 loans to Arizona businesses from Oct. 1, 2013 and Sept. 30, 2014.

“Working with small business owners is one of the most important things we do and is a key focus for our company,” said Greg DeJesus, SBA regional sales manager for Wells Fargo Arizona.  “Every SBA dollar we lend helps an Arizona business owner start, expand or invest in a business and helps keep the Arizona economy strong.  We believe that the flow of new loan dollars into our communities represents a very powerful statement for job creation and economic development.”

Nationally, Wells Fargo approved a record $1.6 billion in Small Business Administration (SBA) 7(a) loans in federal fiscal year 2014 (Oct. 1, 2013 – Sept. 30, 2014).  The company increased its dollar volume of SBA 7(a) loans by 10 percent from a year ago. An SBA preferred lender in all 50 states, Wells Fargo also is the second largest SBA lender by units, extending 4,036 SBA 7(a) loans in federal fiscal year 2014, a 16 percent increase in units from the prior year.

Wells Fargo is the No. 1 SBA 7(a) lender in dollars in 10 states: Arizona, California, Colorado, Minnesota, North Dakota, Nevada, New Mexico, Oregon, South Carolina and Texas  – and the No.1 SBA 7(a) lender in number of loans (units) in 8 states: Alaska, Arizona, California, Georgia, North Carolina, New Mexico, South Carolina and Virginia.

5 C's of Credit

Wells Fargo Arizona No. 1 SBA lender in dollars

Wells Fargo & Company (NYSE: WFC), America’s No. 1 small business lender, today announced it is the No. 1 Small Business Administration (SBA) 7 (a) lender in Arizona in amount of dollars for the seventh consecutive year and tied for #1 in terms of number of loans  approved.  Wells Fargo approved $75 million dollars and 176 loans to Arizona businesses from Oct. 1, 2012 and Sept. 30, 2013.

“Wells Fargo has a long history of supporting the growth of Arizona’s small businesses and providing credit to meet their financing needs,” said Jim Valley, SBA regional sales manager for Wells Fargo Arizona.  “We believe that the flow of new loan dollars into our communities represents a very powerful statement for job creation and economic development, and we are pleased to provide financial support that gives business owners the funds they need to grow their businesses, retain employees and continue to create new jobs in our community and across the country.”

Among the customers who Wells Fargo helped become business owners with an SBA loan are military veterans Bradley and Barbara Frey of Tucson, Ariz. The couple secured an SBA 7(a) loan to buy a mobile home parts manufacturing business, M&M Home Supply Warehouse, earlier this year.

“My wife and I have always dreamed of running our own small business together,” said Brad Frey. “As new small business owners, it was a daunting task to get our business up and running, but Wells Fargo helped us from the beginning and is a significant reason why we are thriving. My wife and I had tears of happiness when we were signing our loan documents because we could not believe our dream was now a reality.”

Nationally, Wells Fargo approved a record $1.47 billion in Small Business Administration (SBA) loans in federal fiscal year 2013 (Oct. 1, 2012 – Sept. 30, 2013) and for the fifth consecutive year is America’s leading SBA 7(a) lender in dollar volume. This is the third year in a row that Wells Fargo has approved more than $1 billion in SBA 7(a) loans to small business owners – the only lender to achieve this milestone.  An SBA preferred lender in all 50 states, Wells Fargo also is the second largest SBA lender in units extending 3,481 SBA 7(a) loans in federal fiscal year 2013.

Wells Fargo is the No. 1 SBA 7(a) lender in dollars in 12 states: Arizona, California, Colorado, Florida, Georgia, Iowa, Minnesota, New Mexico, Pennsylvania, South Dakota, Texas and Virginia – and the No.1 SBA 7(a) lender in number of loans (units) in 11 states: Alaska, Arizona (tied), California, Colorado, Florida, Georgia, Nevada (tied), New Mexico, South Carolina, South Dakota and Virginia.

Klocke Dan dpp 6-14-05

Phoenix Public Market boosts micro-businesses

Micro businesses may be small, but they pack a big punch.

Though defined as businesses with less than five employees, www.microexec.com reports that micro firms “represent a staggering 99.7percent of all the employer firms in the country.”  That means more than half of all private-sector employees work for micro firms which pay “44 percent of the total private payroll in the county.”

A Small Business Administration (SBA) report in March 2010 showed that micro businesses created 64 percent of all net new U.S. jobs from 1993 to 2009.

For many micro-business owners, making their first foray into business can be a challenge.  The Phoenix Public Market provides very low-cost opportunities to promote products, establish revenue, and expand micro-businesses.  Along the way, they learn, perhaps make a few mistakes and grow in a low-risk environment.   Today, 45 vendors who started at the Phoenix Public Market now have products that can be found in major grocery stores and restaurants throughout the Valley.

In May, the Market will celebrate the grand opening of a new restaurant by St. Francis owner Aaron Chamberlin in the space that formerly housed Urban Grocery.  The restaurant is adjacent to the open air Market which supports over 100 micro businesses, many of whom will be selling products to the new restaurant.

Despite having to close the indoor Urban Grocery store last May, the open air Phoenix Public Market remains one of the Valley’s leading advocates for and tactical supporters of small business and has continued to grow and flourish.

Even with the setback and the financial challenges it generated, we were able to hold firm in our mission to create opportunities for small businesses that may not be able to open storefronts because of the cost.

Among the reasons we were able to maintain our focus and continue moving forward was the consistent and stalwart support from groups like the City of Phoenix and Bank of America.  The City of Phoenix has been a large supporter from a capital standpoint in building out the open air Market parking lot.  Bank of America was among the first to invest in the Phoenix Public Market with a three-year $25,000 grant and then stepped up with another $15,000 right after the grocery closed when we needed it most.

The impact of those efforts will be reflected long-term and locally. To date our micro businesses have sold over $7 million in local products.  Their support and our ongoing ability to provide opportunities for small businesses will create jobs and generate revenue, taxes and consumer traffic that will, ultimately, contribute to a stronger, more vibrant community.

Those benefits pay dividends to all of us.

 

Dan Klocke is Vice President, Development, for the Downtown Phoenix Partnership (www.downtownphoenix.com).  For information about the Phoenix Public Market, visit www.foodconnect.org.

ty

3 Reasons the Bank Says No

If your application for a small business loan has been denied, you are not alone. In fact, only about 10 percent of the small business borrowers who apply at the bank leave with a loan. Although the bank may give you a song and dance about why you were denied, it usually boils down to some very basic things:

You haven’t been in business long enough: Most banks don’t want to lend to companies that are in the first year or two of business. The success rates of a business that is over two years old are much higher and your banker, by his or her very nature is highly risk averse. They usually won’t take a risk on a very young company. You should also know that they will likely use your company tax returns to determine how long you’ve been in business. With that in mind, even if you don’t have much to report, file your returns starting with the first year to establish your company’s age right from the start.

Your personal credit is bad: Even if you’re trying to establish credit as a business, especially in the beginning, your personal credit and your business credit are pretty much joined at the hip. In fact, unless you have stellar business credit, you’re likely going to have to agree to a personal guarantee. In other words, you will need to cover the debt personally if your business fails to honor the debt. I recently heard from a small business borrower who defaulted on a very large business loan. The commercial property used as collateral had devalued over the last couple of years to the point where seizing it would only repay 50-60 percent of the loan balance. His attorney told him he should prepare for the worst—the bank will likely take everything he owns to repay the debt. On the other hand, if you have incredible personal credit, that sometimes frees up cash for a young business. Like it or not, maintaining your personal credit is just as important to a Main Street business as keeping a good business credit score.

You do business in a sketchy industry: By sketchy, I mean, highly volatile or erratic. Just like some banks specialize in particular types of industries, they will avoid others. The restaurant business is a good example. Because so many new restaurants fail many banks avoid lending to restaurants at all. If you do business in a highly niche or volatile industry you’ll either need to bootstrap your funding for the first few years to demonstrate that your business is viable before you’ll have any success at the bank, or try to find a bank or banker that specializes in lending to companies like yours. You might have to bank out of town (or even in another state), but building a banking relationship with a bank and banker that really understands your business is a good idea and technology, in many cases, pretty much makes bank location irrelevant anyway.

Does this mean that you’re stuck among the 90 percent that walk out of the bank empty handed? Not necessarily. There are a lot more options today for small business financing than just a few short years ago. What’s more, competition among alternative financing is making rates and other terms more and more favorable for small business owners. Of course even alternative lenders are interested in how long you’ve been in business, your personal credit, and your industry—they are simply willing to accept more risk. You should also be aware that the cost of capital could be a little higher with an alternative lender. Consider it  the cost of being a little more risky loan than what your local banker might accept.

At Lendio, we match thousands of small business owners to financing every month—some even end up with a local bank. Francis Bacon said, “Knowledge is power.” Knowing what your banker is looking for and what might be a cause for rejection makes it possible for you to demonstrate you have a plan to either mitigate his or her concerns or help you focus on an alternative funding source that might offer a better chance for success.
Small business evangelist and veteran of over 30 years in the trenches of Main Street business, Ty Kiisel makes small business best practices, tips and advice accessible by weaving personal experiences, historical references and other anecdotes into relevant discussions about leading people, managing a business and what it takes to be successful. Ty also shares his passion for small business every week on Forbes.com.

capital

3 Phoenix-area companies offered access to growth capital

The Initiative for a Competitive Inner City (ICIC), Bank of America, FORTUNE and the U.S. Small Business Administration (SBA) are proud to announce that they have selected three Phoenix-area companies for their annual Inner City Capital Connections (ICCC) program. This year the program received a record-setting 5,200 company nominations from across the country and selected 178 companies for participation. Especially critical in today’s economic climate, ICCC identifies inner city businesses in need of growth capital, educates them on the sources of capital, and matches them with capital providers in order to grow their businesses and create jobs.

The three Phoenix-area companies selected include:

Each of these companies was selected for the program because of its strong growth potential and commitment to the inner city.

ICCC, co-founded with Bank of America, educates inner city entrepreneurs on how to access capital and matches them with capital providers. To do this, the program offers selected companies web-based training workshops, coaches to help perfect company pitches, a day-long information session on equity and other forms of growth financing, and an innovative one-day event that directly connects them with investors to make pitches and discuss potential opportunities.

“There is a lack of capital availability in America’s inner cities,” stated Mary Kay Leonard, ICIC President and CEO. “In fact, 71 percent of inner city businesses have, on average, only a quarter of the capital needed to compete on average in their industries. For many urban entrepreneurs, ICCC helps open the door to a network of financial options that they had limited or no access to previously.”

The program is free to the inner city businesses, and 178 companies from across the country have been selected to participate in this year’s program. To qualify, a business must be located in the inner city (defined as an area of concentrated economic distress) or have a disproportionate percent of its employees residing in such an area. In addition, a company must have $2 million in revenue. The companies selected for the program represent numerous industries including technology, food and beverage, consumer goods, business and professional services, and manufacturing.

Since its inception in 2005, 375 inner city companies and 150 capital providers have participated in ICCC. Participating companies have raised more than $703 million in capital and created more than 5,694 jobs in their communities.

“ICCC demonstrates that growing inner companies, if given the access to capital, can generate the jobs and wealth that are crucial to the transformation of our urban communities,” explained Edward Powers, Managing Director of Bank of America BAML Capital Access Fund. “We are proud to help these growing businesses connect with a vast network of capital providers.”

The meetings with potential investors will be held on November 9, 2012 at the headquarters of FORTUNE.

153888767

National Bank of Arizona Hires New Business Banking Manager

National Bank of Arizona (NB|AZ) announced the hire of new business banking manager, Ward Hickey. Hickey has more than 25 years of experience in the Arizona banking industry, specializing in entrepreneurship, business development and small business administration (SBA) lending.

“I am thrilled to join the NB|AZ team,” Hickey said. “I’m looking forward to expanding the small business products group and developing mutually beneficial partnerships for the bank and the companies we serve.”

In his new role as business banking manager, Hickey will focus on growing deposit and lending products in the SBA department, reinforcing the strong commitment NB|AZ has to fueling the entrepreneurial spirit of Arizona. He will work directly under Brent Cannon, executive vice president and director of community banking, managing a small team of bankers at the NB|AZ Corporate Headquarters at the Biltmore.

“We are extremely pleased that Ward has joined the team at NB|AZ,” Cannon said. “His specialty in the small business segment, and specifically SBA guaranteed loans, will add considerable value to our organization. Under Ward’s leadership, NB|AZ will continue and improve our products and services to small businesses throughout Arizona.”

Prior to joining NB|AZ, Hickey held several executive positions and shared his expertise with various local and national banks, including Heritage Bank, Wells Fargo and Alerus Bank and Trust, among others. Over the course of his career, Hickey has procured and funded more than $500 million in SBA and commercial loan volume.

Hickey has been recognized with many awards for his exemplary work, including the 2006 SBA Financial Services National Champion of the Year, 2000-2003 SBA Arizona Small Business Banker, and the 2000 Southwestern Business Financing Corporation Banker of the Year.

In addition to his professional success, Hickey dedicates a significant portion of his time to giving back to the community through board positions with the Boys & Girls Club of Metro Phoenix and the Arizona State University Dean’s Council.

Lisa Alberti - SBA-504 Loan Program

Valley Franchise Owners Use SBA-504 Refinance Program To Help Reinvest In Businesses

Robert and Mary Perez take advantage of SBA-504 refinance program.

At a time when jobs are hard to come by and many small businesses are cutting back, Robert and Mary Perez are growing their Metro Phoenix businesses and reinvesting in their biggest asset – their employees.

The Perez’s own and operate six Wendy’s franchises and employ close to 120 people. They were recently facing one significant balloon payment on a commercial real estate loan and dealing with a high interest rate on another. They looked into refinancing via the Small Business Administration. CDC Small Business Finance and Alliance Bank partnered to provide the loans.

“The SBA-504 refinance program couldn’t have come at a better time for us,” Perez said. “The two refi loans we received were the perfect solution, offering us a low, fixed rate for 20 years on both properties. The monthly savings now gives us the ability to hire three more mid-level managers at a higher starting salary and increase the staffing hours for our existing employees.”

The new financing enabled the Perez’s to take advantage of a low interest rate, currently at 4.70%, and a low down payment of 10%.

“I know there are more small business owners, especially in Phoenix, who are facing a hike in their current loan payments,” said Lisa Alberti, CDC Small Business Finance loan officer. “Business owners who own their building and facing an insurmountable payment can benefit from this program, but they need to act fast because the program ends September 27.”

The basics of the SBA-504 refinance loan are simple:

  • To be eligible, the small business must be a for-profit company with tangible net worth of less than $15M and after-tax profit of less than $5M.
  • Any small business with a commercial mortgage at least two years old may be eligible.
  • Payments on commercial loan to be refinance must be current with no delinquencies or deferments in the payments in the past 12 months.
  • The eligible small business must currently occupy 51% of the property to be refinanced. The refinanced amount can be up to 90% of the appraised value of the subject property. The required down-payment is 10% of the total loan amount.
  • The program is structured like SBA’s traditional 504 loan program: borrowers work with third-party lending institutions and a SBA-approved certified development company, typically a non-profit organization like CDC Small Business Finance, to obtain financing.
  • Existing 504 loans and government-guaranteed loans are not eligible for refinance.

SBA estimates that as many as 8,000 businesses across the country are eligible to participate in this refinance program, which will provide up to $7.5B in SBA-guaranteed financing that will leverage total project financing of almost $17 billion.

The SBA-504 loan program was created by the SBA for the specific purpose of financing long-term fixed assets such as commercial real estate and equipment with economic life of 10 years or greater.

CDC Small Business Finance’s office is located at 2575 E. Camelback Rd., #450. For more information on the SBA-504 loan program, contact Lisa Alberti at (602) 635-8413 or lalberti@cdcloans.com

asba

ASBA Celebrates Entrepreneurs

The Arizona Small Business Association ( ASBA ) and the U.S. Small Business Administration ( SBA ) will kick-off national Small Business Month in May by announcing Arizona’s small business award winners at the 19th Annual Enterprise Business Awards Luncheon on May 1. The luncheon will be held at the Arizona Biltmore Resort and, notably, LifeLock Chief Executive Officer Todd Davis will provide the keynote address on how a gutsy, spur of the moment marketing decision turned the Arizona-based startup into a two million plus customer phenomenon.

“It’s an honor for the Arizona Small Business Association to recognize these exceptional Arizona businesses,” says Rick Murray, chief executive officer of ASBA. “They represent the very best in innovation, business and entrepreneurial spirit that Arizona has to offer, and exemplify the great business leadership that is contributing to our state’s strengthening economy and excellence.”

“Each year the SBA has the honor of spotlighting Arizona winners of our Small Business Week awards in a ceremony that recognizes and celebrates the entrepreneurial spirit and community activism that has long characterized the small business community of our great state,” said Robert J. Blaney, the District Director of the SBA in Arizona. “These men and women are the risk takers, the innovators and the employers that power our economy and daily serve our communities in business and as local leaders.”

Recipients of the 2012 U.S. Small Business Administration Awards represent small business achievements across the state.

Small Business Person of the Year: Zeferino Banda, owner of Banda Group International (BGI) of Chandler

• Small Business Exporter of the Year: Dr. Manuel Padilla, President of Geotechnical Consulting and Testing Systems (GCTS) of Tempe

• Jeffrey Butland Family-Owned Business of the Year: AGM Container Controls of Tucson

• Young Entrepreneur of the Year: Virgilia Kaur Singh, CEO of MIB Consultants of Scottsdale

• Minority and Small Business Champion of the Year: Lea Marquez Peterson of the Tucson Hispanic Chamber

• Women in Business Champion of the Year: Janet Marcotte, Executive Director of the YWCA in Tucson

• Veteran Small Business Champion of the Year: Tom Shambo of the Microbusiness Advancement Center’s Small Business Development Center of Tucson

• Financial Services Champion of the Year: Karen Goettl, Vice President and Regional Loan Operations Manager of Western Alliance Bank of Phoenix

The “Small Business Person of the Year” award recipient, Zeferino Banda, will represent the State of Arizona during national Small Business Week in Washington D.C. May 20-26.

At the awards luncheon, ASBA will also reveal the winner of its “amAZing Small Business Video Contest.” The contest began accepting video submissions in March which answered the question, “My small business is amAZing™ because…” The contest is open to all Arizona small businesses through Friday, April 20. Contest submission details can be found at www.asba.com/amazingbusiness. The event will also feature a video booth where attendees can stop by and tape a video about their business on site.  Each attendee will receive a copy of their video after the event to use however they would like.

Join the celebration honoring these small business leaders on May 1st at 11am-1:30pm at the Arizona Biltmore Resort (2400 E. Missouri Ave., Phoenix, AZ). To register, visit www.asba.com/enterprise or call 602-306-4000.

Financing

Arizona Commercial Real Estate Financing Nearly Doubles

Commercial real estate financing in Arizona via the Small Business Administration (SBA) 504 loan program nearly doubled for the first half of the SBA’s fiscal year compared to the same six-month period a year ago, according to CDC Small Business Finance.

DC reported that SBA-504 loan approvals totaled $105M for the Oct. 2011 – March 2012 period compared to $56M approved for the same period a year prior – Oct. 2010 – March 2011.

“The market continues to rebound after a couple down years,” said Lisa Alberti, loan officer for CDC Small Business Finance. “Small businesses are taking advantage of lower property values and also capitalizing on refinancing currently owned properties.”

Close to 650 new jobs are projected to be created in Arizona as a result of SBA-504 financing approved over the last six months.

CDC Small Business Finance itself approved 21 SBA-504 loans for the six-month period, partnering with banks to provide $39M in financing to Arizona small businesses.

In addition to the traditional 504 program, a new SBA refinance program is now available to small businesses facing balloon payments on commercial property mortgages.  The current refinance rate through this program is 4.95%.

The 504 loan program was created by the SBA for the specific purpose of financing long-term fixed assets such as commercial real estate and equipment with economic life of 10 years or greater. This refinance program is only available through September 27, 2012.

For more information on financing through CDC Small Business Finance, visit CDC Small Business Finance’s website at cdcloans.com.

Public Policy

Hispanic Chamber Takes On Key Issues

Matters of Public Policy

Hispanic chamber takes
on key issues

 

From immigration reform to healthcare affordability, the Arizona Hispanic Chamber of Commerce is once again wading into the turbulent waters of public policy and its already tackling big issues. The chamber’s public policy committee became active again last September and its 25 members have been busy the past several months educating themselves on state and federal issues.

public_policy“As an arm of an organization that represents primarily small Hispanic businesses, the committee explores issues that affect chamber members on a daily basis and their ability to grow and thrive,” says Jessica Pacheco, committee chairwoman and chamber board member and treasurer. “Not all Hispanic small businesses view these issues the same. We have a lot of debate and dialogue.”

Immigration Reform
So far, the Hispanic chamber has let other chambers take the lead on immigration reform, but Pacheco says her committee has its opinions on one facet of this issue—penalties for employers who hire undocumented workers. The committee has no problem with employer sanctions as a concept but opposes them as a “stand-alone issue” outside the context of comprehensive immigration reform. In June, Gov. Janet Napolitano vetoed a House immigration bill that included employer penalties. Its membership favors comprehensive immigration reform and the Hispanic chamber prefers that Congress address this issue, Pacheco says. “I can’t imagine a more difficult business environment than with each state having its own immigration laws.”

Procurement Opportunities
This fall, the chamber plans to help Arizona launch a “disparity study” to demonstrate how the state awards contracts for goods and services. It wants small business to garner a more equitable share of state procurement dollars, possibly an additional 10 percent. The chamber teamed with a variety of organizations to raise funds to pay for the study. The U.S. Department of Transportation is expected to provide $450,000 and a like amount must be raised locally through a public-private partnership, according to Pacheco. The first meeting with local donors was slated for June 14.

Federal Estate Tax
“There is a misconception that the federal estate tax affects very wealthy Americans, but if you look at the structure of the tax, it really hurts small businesses, especially Hispanic small businesses where 90 percent of them are inherited by family,” Pacheco says. The chamber believes the tax should be eliminated and committee members are communicating with Arizona’s congressional delegation.

Healthcare Affordability
Every small business grapples with the cost of providing health insurance, Pacheco says. “We would like to see a reduction in the cost of health insurance plans offered in the small group market. We also want to increase the number of workers in small business that have health insurance.”

Tax Relief
AZ Business MagazineThe chamber supports tax relief for small business. It favors reduction in dividend and capital gains taxes and supports accelerated depreciation for equipment and software. “Software depreciation is critical because small businesses often have to purchase very expensive software for accounting and networking,” Pacheco says.

Access to Capital
The Small Business Administration provides considerable capital for small businesses and the chamber is keenly interested that the SBA continuing to receive adequate funding. “The SBA has been a great partner and we want to be sure our membership knows what is out there and available to them,” Pacheco says.

 

www.azhcc.com

 

Arizona Business Magazine Aug/Sept 2006

 

AZ Business Magazine Aug-Sept 2006 | Previous: Majority-Minority | Next: Gridlock …