Glossary Of Small Business Terms part 1

504 LOAN PROGRAM Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the Certified Development Company (CDC) (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a

contribution of at least 10 percent equity from the small business being helped. The

maximum SBA debenture is $1,000,000 for meeting the job creation criteria or a

community development goal. Generally, a business must create or retain one job for

every $35,000 provided by the SBA. The maximum SBA debenture is $1.3 million for

meeting a public policy goal.

7(a) LOAN GUARANTY The 7(a) Loan Guaranty Program is one of SBA's primary lending programs. It provides loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA -the Agency has no funds for direct lending or grants. 7(j) Under Section 7(j) of the Small Business Act, SBA is authorized to provide management and technical assistance, through grants and cooperative agreements to qualified service providers. The Agency is not authorized to award grants to assist individuals to start, operate, expand, rebuild, or purchase a business. The management and technical assistance includes specialized training, professional consulting and executive development. The qualified service providers, deliver the training and technical assistance to, eligible firms and individuals participating in SBA's Business Development program, other small disadvantaged businesses, low income individuals, and firms in either labor surplus areas or areas with a high proportion of low-income individuals.

8(a) The 8(a) Business Development program is designed to provide business development assistance and technical assistance to help socially and economically disadvantaged American businesses gain access to the mainstream American economy. The program is named for the section of the Small Business Act that authorizes its policies and procedures.

8(a) Business Development Mentor-Protégé Program Today’s 8(a) Business Development Program is strengthened and improved to be a truly effective business development vehicle. New regulations permit 8(a) companies to form beneficial teaming partnerships and allow Federal agencies to streamline the contracting process. New rules make it easier for non-minority firms to participate by proving their social disadvantage.

We also have implemented the new Mentor-Protégé Program to allow starting 8(a) companies to learn the ropes from experienced businesses. Our task is to teach 8(a) and other small companies how to compete in the Federal contracting arena and how to take advantage of greater subcontracting opportunities available from large firms as the result of public-private partnerships.

Glossary Of SmallBusiness Terms part 2

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