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Tag: Small Business Administration

Pa. veteran entrepreneurs to get expanded support from Biden-Harris Administration

Pennsylvania veteran business owners are among entrepreneurs who will receive expanded support from the federal government.

The Biden-Harris Administration announced Friday expanded support for the Veterans Business Outreach Centers from 22 to 28 locations, fully servicing all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, and American Samoa. 

There are nearly two million veteran-owned small businesses in the U.S., employing over five million people and generating over $1.3 trillion in annual revenue. Organizations receiving grants from the Small Business Administration (SBA) demonstrate a commitment to addressing challenges facing veteran-owned small businesses and help them succeed through the Department of Defense’s Transition Assistance Program. 

“Our servicemembers have protected our nation with selfless honor and sacrifice, and the Biden-Harris Administration is committed to supporting them with resources and opportunities as they pursue their American dreams of business ownership,” U.S. Small Business Administrator Isabella Casillas Guzman said in a statement. 

“With this expansion of our veteran-focused network of small business centers, we can help more transitioning service members, veterans, National Guard and Reserve members, and military spouses start and grow their businesses and advance our economy.” 

Grants will support a variety of services, including the following: 

  • Business planning: Provides veterans with training and counseling on accounting financial planning, and management. 
  • Assistance accessing capital: Provides veterans help in understanding the multitude of sources of capital available to them, as well as helps them in accessing financing, loans, and grants. 
  • Marketing and outreach: Provides marketing and outreach services to promote veteran-owned businesses in their communities and beyond. 
  • Transitioning. Provides Boots to Business instruction to help active-duty service members transition out of the military.

Acting Associate Administrator for the Office of Veterans Business Development Timothy Green said Veterans Business Outreach Centers (VBOC) are a one-stop shop for business training, counseling, and resource partner referrals to transitioning service members, veterans, National Guard and Reserve members, and military spouses who are interested in starting a small business or expanding an existing one. 

“The new centers will provide additional resources to increase support and access for nearly 2 million veteran-owned small businesses,” said Green. “The expanded locations aim to enhance the veteran small business owner experience with more opportunities for training and less appointment wait times.”

Small businesses’ growth and diversity highlight new study

Data from a new study provides a guide for the Small Business Administration (SBA) to help ensure America’s small businesses can grow and diversify their revenue through trade. 

“SBA’s new research gives insight into the broader impact and opportunity for America’s small business exporters, with findings showing significantly more small businesses exporting than previously reported,” Administrator Isabella Casillas Guzman said in a statement.

“The data provides a better guide for the SBA to help ensure America’s small businesses can grow and diversify their revenue through trade. We will continue to strengthen our capacity to provide resources that small exporters need to compete in the global marketplace and power our nation’s economy.”

The SBA released its findings from a commissioned study on the Total Addressable Market (TAM) of small business exporters in America.  Among the study’s key findings is new data, based on recent business surveys, that places the number of exporting small businesses at 1.3 million – an increase of nearly five times the estimates previously published by the federal government.

The research also places the potential market size, or total addressable market, at over 2.6 million small businesses, representing 42 percent of all small employer businesses. 

“We know that small businesses are the engine that drives the U.S. economy, and we can now tell a better and more comprehensive story of the importance of exporting for small businesses,” said Associate Administrator for International Trade, Gabriel J. Esparza.

“We will use this research to support and advance the global market success of U.S. small businesses and evolve our products and services to better meet the needs of those current and future small business exporters.” 

Small business exporter numbers have traditionally been derived by the federal government primarily from U.S. Census Bureau surveys and goods export data. According to the latest official data from 2020, there were approximately 264,000 small business goods exporters in the U.S. The data does not account for overseas shipments valued at less than $2,500 and service exports, including software as a service. 

The study’s research reveals the highest concentrations of small business exporters and exports exist within a variety of manufacturing, wholesale, plastics and chemicals, medical equipment, and computer systems design firms, as well as management consulting, architectural, engineering, legal, and software service providers.

Another focus with both goods and services exporters are emerging industries, such as green technology industries, as there is a global demand for technologies and services benefiting the environment. 

SBA reports on Fiscal Year 2022 lending in Eastern Pa.

The U.S. Small Business Administration (SBA) Eastern Pennsylvania District Office has reported Fiscal Year 2022 loan data. The Fiscal Year ran from Oct. 31, 2021 through Sept. 1, 2022. 

Loans via SBA 7(a), 504, and microloan programs in eastern Pennsylvania totaled 1,405 and approximately $733.3 million.  

In Fiscal Year 2022, SBA’s flagship 7(a) loan program made 1,163 7 loans to eastern Pennsylvania small businesses totaling approximately $584.4 million.  

SBA’s 7(a) Loan Guaranty Program is its primary financial assistance instrument. It provides loan guaranties on business loans to help qualifying entrepreneurs secure financing on reasonable terms. 

The 504 Loan Program (SBA and third-party lenders, combined) reported more than $147.4 million in lending to eastern Pennsylvania small businesses.  

The Microloan Program, which specifically helps businesses in underserved communities, reported more than $1.48 million in lending in eastern Pennsylvania.  

The program operates through private-sector lenders who provide loans. SBA’s 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. 

“SBA lending programs play a vital role, providing the capital needed to help small businesses succeed and grow. Small businesses are continuing to access the capital they need, which is critical to the success of small businesses in our community and the economy of eastern Pennsylvania,” said SBA Eastern Pennsylvania District Director Steve Dixel.

“In FY22, the SBA’s Eastern Pennsylvania District has seen increased loan volume with nearly 24% more loans to borrowers in traditionally underserved communities and 86% more loans to veteran borrowers,” said Dixel. “Our team is hard at work for fiscal year 2023 to support job and entrepreneurial growth across the Commonwealth.” 

 

 

Eastern Pa. SBA accepting nominations for small business awards

The U.S. Small Business Administration is looking for nominations for “Small Business Person of the Year” for the Eastern Pennsylvania District Office for 2023. 

 Anyone seeking to make a nomination can visit the SBA’s website at www.sba.gov/nsbw to download forms, criteria, and guidelines for submitting a National nomination. The Eastern Pennsylvania District Office award categories and guidelines can be found on the district’s website here. 

The SBA Awards given in celebration of National and District Small Business Week include the following awards: 

 Eastern Pennsylvania District Small Business Week Categories: 

  • Small Business Person of the Year (National and District) 
  • Small Business Exporter (National and District) 
  • Entrepreneurial Success (District) 
  • Family-Owned Business of the Year (District) 
  • Minority-Owned Small Business Person of the Year (District) 
  • Veteran-Owned Small Business Person of the Year (District) 
  • Woman-Owned Small Business Person of the Year (District) 
  • Young Entrepreneur of the Year (District) 

“For more than 50 years, SBA has celebrated National Small Business Week, which recognizes the inspiring achievements of America’s small businesses and entrepreneurs, and the contributions they make to their local communities and our nation’s economy,” said Steve Dixel, SBA Eastern Pennsylvania district director. “We look forward to recognizing our local outstanding small businesses with these awards, which are one of the nation’s highest honors for small business achievement” 

The Eastern Pennsylvania District Office is accepting nominations by electronic submission HERE by 3:00 p.m. Dec. 8. 

 

SBA reports record year for small business loans

In a year when the U.S. Small Business Administration said it made a record number of loans to the nation’s small businesses, it’s reporting that it made a significant amount of loans in Eastern Pennsylvania. 

In Fiscal 2021 the SBA said it made 26.1% more loans from its 7(a) loan program across the 40 counties in the Eastern Pennsylvania District. That was also an increase of 67.5% in dollars loaned, with a total of 1,087 loans for $700.4 million over Fiscal 2020. 

The district’s 504 loan program made 66.3% more loans and 57.8% more in total dollars for a total of 138 loans worth more than $120 million. 

The district’s Microloan program, loans for less than $50,000, actually made fewer loans for less dollars with 124 loans for $1.42 million compared to 2020 when the Microloan program made 234 loans for $2.63 million. 

Nationally, the SBA has provided loans offering more than $1.1 trillion in COVID-related relief since the start of the pandemic.  

The SBA reached $44.8 billion in funding to small businesses through more than 61,000 traditional loans for fiscal year Fiscal 2021. The flexible, low-interest 504 loan program grew in loan volume by 41%. 

“In the midst of a once-in-a-generation pandemic, the SBA’s mission-driven team delivered a record number of SBA’s traditional loans to our nation’s small businesses – in addition to more than $1.1 trillion in COVID-related relief since the start of the pandemic,” said SBA Administrator Isabella Guzman. “While progress has been made, our data also tells a deeper story:  historic inequities in accessing capital persist, and we must do more to lower the barriers of entry to opportunity for all our entrepreneurs. We will continue to build on our impactful programs to meet small businesses where they are and connect them with the resources needed to thrive.” 

SBA expands COVID Economic Injury Disaster Loan program

The U.S. Small Business Administration has made changes to its COVID Economic Injury Disaster Loan (EIDL) program that a local banking executive said many businesses will find advantageous. 

Recently, the SBA announced that it was enhancing the program by, among other things, raising the limit that could be borrowed from $500,000 to $2 million dollars. 

Kevin Brown, chief loan officer at First Commonwealth Federal Credit Union, said for many businesses the extra help is needed. 

“It will certainly help some of the businesses that have had lower revenues that $500,000 won’t cover,” he said. 

There are many changes aimed at helping small to medium-sized businesses, particularly those with under 500 employees. 

“Our mission-driven SBA team has been working around the clock to make the loan review process as user-friendly as possible to ensure every entrepreneur who needs help can get the capital they need to reopen, recover and rebuild,” said SBA Administrator Isabella Casillas Guzman. 

Other changes include increasing the period of time where a business doesn’t have to repay the loan. 

Currently, the loans, which are 30-year loans at 3.75% interest, have 18 months of deferred payments. 

Under the changes, businesses have two years before they need to start repaying the loan, which will help those businesses get the breathing room they may need as they try to recover from the pandemic’s impact. 

Brown said probably the biggest advantage to the changes in the EIDL program is that it expands the ways the loan money can be used. 

“We have one client member who used the loan to put a down payment on a building,” he said. 

Noting thatt EIDL is a direct SBA loan and does not go through banks and credit unions like the Paycheck Protection Program Loans, he said others he has talked to have used the funds to pay down their debt from other higher interest loans. 

“Especially for companies with a larger number of employees, this could really be a benefit. We’ve seen a lot of our business members take advantage of EIDL,” Brown said. 

Unlike the PPP loans, Brown noted that the EIDL loans are not forgiven and do need to be repaid over 28 years once the two-year deferment is up. 

Part of the EIDL program however, does provide for grant money for businesses in low-income areas. 

Targeted Advance and Supplemental Advance grants are available totaling up to $15,000. Those do not need to be repaid. 

To ensure that Main Street businesses have additional time to access EIDL funds, the SBA has implemented a 30-day exclusivity window for approving and disbursing funds for loans of $500,000 or less, that are part of the original allocation. 

The enhanced EIDL would then take effect starting in early October. 

The money certainly seems to be needed. 

Guzman noted that according to a recent Goldman Sachs 10,000 Small Businesses survey, 44 percent of small business owners report having less than three months of cash reserves and only 31 percent reporting confidence in gaining access to funding. 

The goal of the enhancements to the COVID EIDL program is to allow more businesses greater and more flexible support from the over $150 billion in available COVID EIDL funds. 

“It sounds like they have unspent money and now they’re putting it to work,” Brown said. 

Businesses that want to learn more about the EIDL program can go to www.sba.gov/eidl for more information. 

Neffs National Bank honored for PPP loan work

Neffs National Bank’s Michail Georgevic, commercial loan portfolio manager; Greta Mast, vice president of commercial lending; and Marianne Eisenhauer, vice president of commercial lending & credit administration at the Pennsylvania Association of Community Banker’s Inspire Awards. PHOTO/SUBMITTED –

When the COVID-19 pandemic started, Neffs National Bank wasn’t an active Small Business Administration lender.

But, after a short learning curve that quickly changed and now the bank has been honored for its work in helping people obtain SBA Payroll Protection Program (PPP) loans by the Pennsylvania Association of Community Bankers.

The bank received the organization’s Inspire Award for coming to the aid of the small businesses it serves in the community.

Marianne Eisenhauer, vice president of commercial lending & credit administration for Neffs, said the bank is proud of the way it was able to help so many small businesses, and gain customers in the process.

“Our phones were ringing off the hook with current customers asking us to help them with the PPP,” she  said.

The problem was that bank’s staff wasn’t familiar with the SBA lending process used for the forgivable loans. “It was challenging because we had to learn the process,” she said. “We had to find a way to get up and running and provide those loans to our customers.”

Once they were able to figure the process out, the bank’s lenders worked directly with small-business owners to help them to obtain the loans and make it an easier process.

She said many of the bigger banks weren’t offering such hands on service, so some of their current customers recommended Neffs to other business owners to get the help they needed. Because the bank was working directly with the SBA and not a third party vendor, they were able to get the money to their customers quickly.

“It was a lot of work, but in the end we got a lot of new customers because of it,” Eisenhauer said.

In all, Neffs helped obtain 370 loans for community businesses to help them maintain payroll and stay in business during the shutdown. One of those companies was a community pharmacy that used its PPP loan to keep its employees on payroll and a few months later were providing COVID vaccines in community.

Restaurant Revitalization Fund program to focus first on minority-owned businesses

Restaurants, bars, caterers, inns, taverns and more can now apply through the Small Business Administration for a grant through the Restaurant Revitalization Fund (RRF) – and companies owned by women, veterans and other socially or economically disadvantaged individuals getting early priority.

The administration began accepting applications for the fund on Monday. Businesses can apply for a grant equal to their pandemic-related revenue loss and can receive a maximum of $10 million.

The administration announced it will prioritize distributing funds to applicants that are “51% owned by women, veterans and/or socially and economically disadvantaged individuals” for the first 21 days of the program. However, it recommends that businesses outside these groups still apply as soon as they can.

The program is an effort by the federal government to provide more focused aid to businesses in need. But many say that the $29 billion set aside for the program through the $1.9 trillion American Rescue Plan Act of 2021 simply isn’t enough.

When the act was signed into law by President Biden in March, John Longstreet, president and CEO at the Pennsylvania Restaurant & Lodging Association, told Lehigh Valley Business that the $29 billion for restaurants nationwide wouldn’t be enough for the more than 26,000 restaurants in Pennsylvania.

“We have been working with the Pennsylvania legislature to dedicate $1 billion of this state grant money to the hospitality industry,” he said in March. “Though the Restaurant Revitalization Fund hits the hardest- hit segment, it doesn’t help the hotels and other attractions that are part of the tourism industry.”

Funding for the program is calculated by subtracting the applicant’s 2020 gross receipts from the gross receipts reported on the applicant’s 2019 federal tax return. If a business began operations during 2019, the funding amount calculation is pro-rated by taking their 2019 average monthly gross receipts.

RRF grants will be disbursed within 14 days after applicants submit their application and required documents. Funds given through the program must be used before March 11, 2023.
“I’ve heard from so many restaurant owners and managers who tell me about 2020’s devastating impacts on their businesses. This new program is one way to recoup losses,” said Pa. Rep. Tom Mehaffie (R-Dauphin).

PPP’s extension gave borrowers needed time to apply, funds expected to dry up before end date

An extension to the Paycheck Protection Program (PPP) from March to May allowed more time for small firms and businesses looking to draw from the program for a second time to benefit from it. But without additional funds, the program is expected to dry up soon.

The newest wave of PPP loans began early this year and was signed into law by President Trump in December.

The third round of the program allowed businesses to apply for a second PPP loan if they had 300 or fewer employees, demonstrated a drop in revenue for one calendar quarter compared to the previous year, and showed they used all of their first-round money.

Late last February, the Biden administration revised PPP small business loans to reach smaller, minority-owned firms. However, the federal business loan program was scheduled to end just a month after businesses had a chance to cash in on the significant increase in funds they would receive.

It also gave businesses who were unable to apply for the first round of loans a chance to do so, but because of an eight-week hold on applying for a second round, many of those businesses would have been unable to apply for their second round by the March end date.

Biden signed the PPP Extension Act of 2021 in late March, allowing borrowers to continue to apply for PPP loans until May 31. At the time the act was signed, the Small Business Administration (SBA) had already approved nearly $196 billion out of the $290 billion in funds set aside for the program.

Between businesses applying for their second loan at a max of $2 million and small businesses now borrowing against their gross income rather than their net profit thanks to the new PPP rules approved by the Biden administration, the program is expected to be out of money weeks before the new deadline.

“For the last month and a half the burn rate has been $10 billion a week,” said David Patti, director of communications and marketing at Chester County-based Customers Bank. “The guy who could qualify for $1,000 now qualified for $10,000. That unleashed pent-up demand and there are now a lot more people in line.”

As of April 26, the SBA reported having $18.5 billion left in its PPP loan pool, according to Patti.

Despite the swiftly dwindling funds, the extension has proven to be beneficial for borrowers newly eligible for the program, said Jeramy Culler, vice president and business banking manager at F&M Trust in Chambersburg.

“The changes were made late in this round of the program, and the additional time allows borrowers who were previously ineligible to compile their information and submit applications,” said Culler. “It also provides additional time for those borrowers who didn’t receive a first-draw loan until 2021 to meet the use of funds criteria for a second-round loan. I expect there to be continued interest from borrowers until the money is exhausted or May 31, whichever comes first.”

Banks also had more time and resources to manage the loan applications coming in from borrowers since the first wave of PPP was already behind them.

Last year, lenders had two weeks to prepare for the bevy of borrowers that would knock on their doors. This year, banks were able to take advantage of their experience from 2020, said Matthew Long, chief operating officer of Ephrata National Bank.

“That was in the height of COVID. We weren’t sure what to do from an employment perspective,” he said. “We did a very manual labor-intensive process to do it quickly. As we looked at this further and moved into the second wave, we took advantage of tech because we had more time on our side to reevaluate.”

Recently the SBA launched a new round of Economic Injury Disaster Loan assistance to provide $5 billion in additional assistance to small businesses and nonprofit organizations impacted by the pandemic.

This and other programs such as the $28.6 billion Restaurant Revitalization Fund are part of more targeted aid for businesses compared to the broader PPP, which could help lift up businesses hit hardest by the past year, said Patti.

“The Biden administration thinks it’s time to focus on hotels, restaurants and others and that’s all fair to now say ‘Let’s get help to the people who have lingering problems or problems unique to their sector and be much more tailored to their policy,’” he said.

Customers Bank turns to fintech to help small businesses with PPP loans

During the first round of Paycheck Protection Loans last year, Customers Bank of West Reading was able to assist in more than 100,000 PPP loans totaling more than $5 billion.

That put the small Berks County bank into the top echelons of the nation’s PPP lenders, with the fifth highest number of loans. But at the same time, the loans Customers Bank handled represented the second lowest average loan size. That’s because the bank was helping smaller businesses having difficulty finding help with PPP loans.

“People didn’t understand how this small bank from Berks County could have so many loans up against the big guys,” said Miguel Alban, senior vice president and director of Multicultural Banking.

The answer, according to Michele Vervlied, managing director of Government Guaranteed Lending, was the bank’s partnership with several fintech companies to create an easy-to-use bundle of online services that can help manage the PPP application process through origination, servicing and forgiveness.

The service was able to help Customers Bank simplify the process for smaller businesses – especially those in low income areas – who wouldn’t have the same resources as a larger business.

“We helped everyone, whether they were customers or not,” said Alban. “We put an emphasis on helping the underserved and minority businesses.”

Those small business owners were in many cases left out in the cold because they didn’t have a relationship with a bank that could assist them with the Small Business Administration-backed loans, he said. Banks were too busy with existing customers and many of the business owners were unsure how to proceed.

“The larger businesses already have the banking relationship and it’s easier for them to provide information,” said Vervlied. “This digital process really helped with the first round of PPP.

But even with all of Customers Bank’s best efforts, they can only get to so many small businesses. Alban was tasked with reaching out to other institutions that serve small and minority-owned businesses to get the word out about their system, offering it as a White Label turnkey solution that banks, community development Lenders or even chambers of commerce could offer those they serve.

With President Joe Biden recently announcing  a $1.9 trillion relief package, which, if passed, would offer a “second draw” of PPP funds, Vervlied said the bank is hoping more lenders get on board to offer the simplified process to smaller businesses.

“We’re already reaching a broad range of businesses that we were not able to reach through the first round of loans,” Vervlied said.

So far, Alban said, 25 organizations have signed on to use the program including a $50 billion bank, a top-5 bank and several chambers of commerce, including Long Island African American Chamber, Pittsburgh Metropolitan Area Hispanic Chamber and the Black Delaware Chamber.  These relationships allow those seeking loans to apply through the website of an organization they know and trust rather than a bank they don’t know, he said.

With these partners, some of which are co-branded with Customers Bank, and some of which are being created under the organizations’ names and accessed through their websites, Customers has been able to reach small businesses in parts of the country it normally would never had been able to help.

“We only have enough resources to reach out to so many small businesses,” Alban said.

With these other partners, who know the people behind the businesses they serve, Customers can have connections to something like a small start-up in Chicago that needs help obtaining PPP funds that the bank otherwise wouldn’t have known about.

While Customers Bank does receive fees from the SBA for handling the loans, Alban said it is a relatively small amount compared to the amount of work that goes into handling a PPP loan from start to finish.

The program it is using cuts down on the work and makes the process easier and more efficient for everyone. But, he said, it also isn’t all about making money off loans.

“We want to do this because it’s the right thing to do even if it’s not really making us a lot of money,” Alban said.

It’s part of Customer’s Banks mission to service underbanked minority populations that often are wary of handing their money or financial information over to banks, he said.

“We serve the minority communities. We speak what they speak. We look like they look,” he said. “Minorities will become the majority someday and if we don’t do the right thing for the right reason we’re going to miss that boat.”

By investing time and resources into those small businesses now, the bank hopes they will remember who helped them stay with Customers Bank when they become successful, growing the bank’s business organically.

Using fintech to help small businesses get their share of the federal assistance is one step in that direction.

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