Glossary Of Small Business Terms part 29

NMVC companies and to existing Specialized Small Business Investment Companies (SSBICs).

NEWS/NEWS RELEASES SBA issues news releases and media alerts of significant happenings or decisions in the small business community. Choosing More... will take you to our Headline News area.

NMVC New Markets Venture Capital The New Markets Venture Capital (NMVC) program is modeled after the Small Business Administration’s extremely successful Small Business Investment Company (SBIC) program but has a specific mission of economic development in low-income (LI) areas. Through a combination of equity-type financing and intensive operational assistance to smaller businesses located in LI areas, the program seeks to assist local entrepreneurs, create quality employment opportunities for residents and build wealth within these communities. SBA intends to achieve these public policy objectives through financial assistance to newly formed NMVC companies and to existing Specialized Small Business Investment Companies (SSBICs).

NON SET-ASIDE REPORT The purpose of this page is to provide a system to alert SBA's Office of Government Contracting when Government Acquisition Offices do not set aside requirements for Small Business.

NONMANUFACTURER For purposes of Federal government contracts, a firm that supplies a product it did not manufacture is termed a non-manufacturer. To qualify for

Federal government contracting, a non-manufacturer must have 500 or fewer employees, be primarily in the wholesale or retail trade, and supply the product of a US small manufacturer. This requirement is called the "non-manufacturer rule." This rule does not apply to supply contracts of $25,000 or less that are processed under Simplified Acquisition Procedures. The requirement may also be waived through formal procedure by the Associate Administrator for Government Contracting if there is no small manufacturer in the Federal market for a class of products.

NONMANUFACTURER RULE WAIVERS Section 303 (h) of Public Law 100-656 and Section 210 of Public Law 101-574 incorporated into the Small Business Act requires that agency contracts be directed solely to small business manufacturers under set-aside provisions. This requirement is commonly referred to as the Nonmanufacturer Rule. The Small Business Act also contains provisions that allow the Administrator of the SBA to waive this requirement when there are no small business manufacturers or processors available to supply the product to the Federal Government.

NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM (NAICS) The North American Industry Classification System (NAICS) is replacing the U.S. Standard Industrial Classification (SIC) system. NAICS will reshape the way we view our changing economy.

Glossary Of SmallBusiness Terms part 30

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Glossary Of Small Business Terms part 28

NATURAL RESOURCES ASSISTANCE PROGRAM The federal government sells large quantities of natural resources and surplus real and personal property authorized for sale in accordance with public law. SBA cooperates with other federal agencies to channel a fair share of this property and resources to small businesses. SBA's Natural Resources Sales Assistance Program is intended to ensure small businesses obtain a fair share of government property sales and leases through small business set-asides. SBA also provides counseling and other assistance to small businesses on government sales and leasing.

NEGATIVE NET WORTH A business condition when total liabilities exceed total assets.

NEGOTIATED GRIEVANCE PROCEDURE The sole and exclusive procedure available to all employees in a bargaining unit and the employer for processing grievances and disputes.

NEGOTIATION Contracting through the use of either competitive or other than competitive proposals and discussions. Any contract awarded without using sealed bidding procedures is a negotiated contract.

NEGOTIATION (CONTRACTING Contracting through the use of either competitive or other-than-competitive proposals and discussions. Any contract awarded without using sealed bidding procedures is a negotiated contract.

NEGOTIATION (EMPLOYEE) The "face to face" process used by local unions and the employer to exchange their views on those matters involving personnel policies and practices, or other matters affecting the working conditions of employees in the unit and reduced to a written binding agreement. Used also by contracting officers to reach agreement with potential contractors.

NEGOTIATION DISPUTE That point in negotiations where labor and management cannot come to an agreement on some or all of the issues on the bargaining table and the services of the FMCS have not been utilized.

NET WORTH Property owned (assets), minus debts and obligations owed (liabilities), is the owner's equity (net worth).

NEW MARKETS VENTURE CAPITAL NMVC The New Markets Venture Capital (NMVC) program is modeled after the Small Business Administration’s extremely successful Small Business Investment Company (SBIC) program but has a specific mission of economic development in low-income (LI) areas. Through a combination of equity-type financing and intensive operational assistance to smaller businesses located in LI areas, the program seeks to assist local entrepreneurs, create quality employment opportunities for residents and build wealth within these communities. SBA intends to achieve these public policy objectives through financial assistance to newly formed

Glossary Of SmallBusiness Terms part 29

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Glossary Of Small Business Terms part 27

MEDIA ALERTS SBA issues Media Alerts of significant upcoming events in the small business community. Choosing More... will take you to our Headline News area.

MENTOR A business, usually large, or other organization that has created a specialized program to advance strategic relationships with small businesses.

MENTOR 8(a) The U.S. Small Business Administration’s (SBA) Mentor-Protégé program enhances the capability of 8(a) participants to compete more successfully for federal government contracts. The program encourages private-sector relationships and expands SBA’s efforts to identify and respond to the developmental needs of 8(a) clients.

MENTOR BusinessLINC The Mentor Network is composed of large businesses that have created specialized programs that advance strategic relationships with small businesses. These programs range from classroom teaching, to one-on-one technical assistance, to peer groups and advisory boards, to supplier development programs. Often these programs lead to the development of business relationships that may lead to subcontracting opportunities or other business opportunities.

MERGER A combination of two or more corporations wherein the dominant unit absorbs the passive ones, the former continuing operation usually under the same name. In a consolidation two units combine and are succeeded by a new corporation, usually with a new title.

MICROENTERPRISE DEVELOPMENT The mission of the Interagency Workgroup on

Microenterprise Development is to better coordinate the work of federal agencies involved in microenterprise efforts and to develop a coherent framework for federal government efforts to promote microenterprise.

MICROLOAN PROGRAM The MicroLoan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $10,500. Applications are submitted to the local intermediary and all credit decisions are made on the local level.

MONEY A full listing of loan programs is on our web site in the Financing Your Business area.

MORTGAGE An instrument giving legal title to secure the repayment of a loan made by the mortgagee (lender). In legal contemplation there are two types: (1) title theory - operates as a transfer of the legal title of the property to the mortgagee, and (2) lien theory-creates a lien upon the property in favor of the mortgagee.

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LOANS Pollution Control Loan Program Pollution Control Loans are intended to provide loan guarantees to eligible small businesses for the financing of the planning, design, or installation of a pollution control facility. This facility must prevent, reduce, abate, or control any form of pollution, including recycling.

LOANS SBA LowDoc Loan Program SBA LowDoc Further streamlines the making of small business loans. The maximum loan-$150,000. Calls for a response from the SBA within 36 hours of receiving a complete application. Guaranty percent follows 7(a) policy

LOANS Veterans The SBA has not been provided funds for direct loans to Veterans, although Veterans are eligible for special consideration under SBA's guaranty loan programs. The special consideration given such individuals includes:

LOCAL SBA OFFICES SBA maintains offices in all States, Puerto Rico, and Guam.

LONG TERM Period usually greater than one year.

LOSS RATE A rate developed by comparing the ratio of total loans charged off to the total loans disbursed from inception of the program to the present date.

LOSS RESERVE ADJUSTMENT RATE A reserve rate based upon the ratio of the aggregate net charge offs (charge offs less recoveries) for the most recent five years to the total average loans outstanding for the comparable 5-year period.

MARKET The existing or potential buyers for specific goods or services.

MARKET VALUE What a willing buyer will pay for goods, services, a property or a business.

MARKETING The total of activities involved in the transfer of goods and services from the/producer or seller to the consumer or buyer. Marketing activities may include buying, storing selling, advertising, pricing and promoting products.

MARKUP Markup is the difference between invoice cost and selling price. It may be expressed either as a percentage of the selling price or the cost price and is supposed to cover all the costs of doing business plus a profit. Whether markup is based on the selling price or the cost price, the base is always equal to 100 percent.

MATURITY The date on which a loan becomes due.

MATURITY EXTENSIONS Extensions of payment beyond the original period established for repayment of a loan.

Glossary Of SmallBusiness Terms part 27

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Glossary Of Small Business Terms part 25

LINKING CRITERIA SBA requirements for establishing a link from the SBA website to another website. Choosing "More..." will lead you to SBA's linking criteria and and a submission form.

LIQUID ASSETS Cash, checks and easily-convertible securities available to meet immediate and emergency needs.

LIQUIDATION The disposal, at maximum prices, of the collateral securing a loan, and the voluntary and enforced collection of the remaining loan balance from the obligators and/or guarantors.

LIQUIDATION VALUE The net value realizable in the sale (ordinarily a forced sale) of a business or a particular asset.

LISTSERVER A service where in individuals can subscribe to and receive SBA and other publications by electronic mail.

LITIGATION Refers to a loan in "liquidation status" which has been referred attorneys for legal action. Also: The practice of taking legal action through the judicial process.

LOAN AGREEMENT Agreement to be executed by borrower, containing pertinent terms, conditions, covenants and restrictions.

LOAN FORMS Several application forms for various SBA programs are maintained on our site some are fillable and printable online.

LOAN PAYOFF AMOUNT The total amount of money needed to meet a borrower's obligation on a loan. It is arrived at by accruing gross interest for one day and multiplying this figure by the number of days that exist between the date of the last repayment and the date on which the loan is to be completely paid off. This amount, known as accrued interest, is combined with the latest principal and escrow balances that are applicable to what is now referred to as the loan payoff amount. In the case where prepaid interest exceeds the accrued interest the latter is subtracted from the former and the difference is used to reduce the total amount owed.

LOANS 7(A) Loan Guaranty Program Financing Your Business 7(A) Loan Guaranty Program General Description What SBA Seeks in a Loan Application Loan Amounts

Eligibility Loan Maturities Interest Rates Associated Fees Guaranty Percents Prepayment Specialized 7(A) Loan Programs GENERAL DESCRIPTION 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.

Glossary Of SmallBusiness Terms part 26

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Glossary Of Small Business Terms part 24

JUDGMENT BY CONFESSION The act of debtors permitting judgment to be entered against them for a given sum with a statement to that effect, without the institution of legal proceedings.

JUNK BOND A high-yield corporate bond issue with a below-investment rating that became a growing source of corporate funding in the 1980s.

LAWS & REGULATIONS SBA For those pertinent to small business, please see...

LEASE A contract between the owner (lessor) and the tenant (lessee) stating the conditions under which the tenant may occupy or use real estate or equipment. Terms usually include a specific period of time and a predetermined rate.

LEASE RATE The period rental payment to a lessor for the use of assets. It may also be considered as the implicit interest rate in minimum lease payments.

LEGAL RATE OF INTEREST The maximum rate of interest fixed by the laws of the various states, which a lender may charge a borrower for the use of money.

LENDING INSTITUTION Any institution, including a commercial bank, savings and loan association, commercial finance company, or other lender qualified to participate with SBA in the making of loans.

LESSEE The user of equipment or property being leased.

LESSOR The party to a lease agreement who has leagl or tax title to equipment or property, who grants the lessee the right to use the equipment or property for the lease term, and who is entitled to the rental fees.

LEVERAGED BUY-OUT The purchase of a business, with financing provided largely by borrowed money, often in the form of junk bonds.

LIABILITY Debt owed by the company such as bank loans or accounts payable.

LICENSE LICENSES BUSINESS REGISTRATION Businesses are licensed and registered at local and state levels of government. Each state has their own mechanism or criteria for obtaining licenses. Choosing "More..." will take you to state site listings.

LIEN A charge upon or security interest in real or personal property maintained to ensure the satisfaction of a debt or duty ordinarily arising by operation of law.

LINE OF CREDIT A short-term loan, usually less than one year.

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Glossary Of Small Business Terms part 23

INVENTORY TURNOVER How often the inventory is sold and replenished over the

course of a year.

INVERSE ORDER OF MATURITY When payments are received from borrowers that are larger than the authorized repayment schedules the overpayment is credited to the final installments of the principal which reduces the maturity of the loan and does not affect the original repayment schedule.

INVESTMENT BANKING Businesses specializing in the formation of capital. This is done by outright purchase and sale of securities offered by the issuer, standby underwriting or "best efforts selling."

INVITATION FOR BIDS Formal solicitations for offerings, to perform procurements by competitive bids when the specifications describe the requirements of the government clearly, accurately, and completely; but avoiding unnecessarily restrictive specifications or requirements which might unduly limit the number of bidders. IRS Internal Revenue Service with our link going to their publications and notices IRS Forms Internal Revenue

Service (IRS) Forms

JOB DESCRIPTION A written statement listing the elements of a particular job or occupation, e.g., purpose, duties, equipment used, qualifications, training, physical and mental demands, working conditions, etc.

JOBS SBA occasionally has job vacancies open to the public. Choose More... for a listing of vacancies that may exist at this time.

JOBS PAY TABLES GOVERNMENT Choose More... for the latest OPM tables.

JOINT VENTURE In a joint venture both firms share, in some proportion, the responsibility and the profits or loss on a contract. They are considered affiliated (see "Affiliates," above) for the purpose of that contract. Normally, the revenues or the employees of both firms are added together to determine the size of a joint venture. However, on certain large Federal procurements, a joint venture comprised of only small businesses would qualify as a small business joint venture. This is limited to procurements that exceed $10 million in value that are classified with an NAICS industry having an employee-based size standard, or that exceeds one-half of the size standard for procurements classified with an NAICS industry having a revenue-based size standard. Also, certain 8(a) firms may joint venture with other firms without being considered affiliates (see 13 CFR 121.103 and 124.513 for more information).

JUDGMENT Judicial determination of the existence of indebtedness, or other legal liability.

Glossary Of SmallBusiness Terms part 24

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