It seems the U.S. economic recovery may be largely driven by small businesses.

Small companies represent 99.7 percent of all employer firms in the U.S. and employ just over half of private-sector workers, according to the U.S. Small Business Administration (SBA). But analysts say the key to these firms’ success will be their ability to find funding during the coming months.

Small businesses and entrepreneurs typically need loans to finance new equipment, personnel, marketing and other matters. Such was the case for entrepreneur Dr. Justin Kim, whose eye care center was sorely in need of working capital to increase marketing efforts. Like many other small-business owners, Dr. Kim took advantage of new loan provisions set forth by the American Recovery and Reinvestment Act. They eliminate some borrower fees on SBA’s largest loan program-the 7(a) program-and increase guarantees up to 90 percent.

Analysts say the fee elimination means more capital will be available to businesses at lower costs, while increasing guarantee levels will help provide banks with the greater confidence they need to extend credit during the economic crisis.

Before the recovery act, a typical 7(a) loan of $300,000 carried a guarantee fee of between 2 and 3 percent. That same loan today, with the new 90 percent guarantee and the temporary fee elimination, would save a borrower about $8,100. In total, the new provisions are expected to support approximately $8.7 billion worth of 7(a) loans.

Finding Financial Support

Generally, SBA-backed loans provide a key source of financing for viable small businesses that have real potential but cannot qualify for loans from traditional sources. The loans are provided and funded by participating banks and other lenders.

To borrow, a business must be established for profit and must also meet SBA’s size standards for a small business, among other requirements. To qualify for an SBA 7(a) guarantee, a small business must also meet the lender’s criteria and the 7(a) program requirements. In addition, the lender must certify that it could not provide a loan under the proposed terms and conditions without the 7(a) guarantee.

Help Where It’s Needed

Many of the loans that SBA backs go to underserved markets. In fact, the administration’s loans are more likely to go to a business that might be minority owned, woman owned or located in an area with lower income and higher unemployment than conventional bank loans.

June Gold is one of the many female business owners who qualified for financing under the new provisions. The president of a software and program development firm, she was originally turned down for a $500,000 loan by a bank after her husband and company founder, Steve, suddenly died. The funding was denied despite contracts between Gold’s firms and two large pharmaceutical companies, leaving her in need of money to hire skilled staff and continue marketing her products.

Her luck changed when she chanced upon a workshop that directed her to a bank in the area that handles SBA loans.

“They found a way to make it happen,” says Gold. With her $400,000 7(a) loan, she hired a seasoned salesperson and is expanding operations. Last year, her company posted $1.2 million in sales.

To learn more, for a list of approved lenders or tips on starting a business, visit the Web site www.sba.gov.

A new lending program could make working capital more affordable for many small businesses.

The SBA (U.S. Small Business Administration) will present FREE webinars for Small Business Owners and Entrepreneurs through ReadyTalk. These sessions will provide information pertinent to small business owners and will share the new developments on SBA’s programs related to The American Recovery and Reinvestment Act.  The series is scheduled to run on selected Tuesdays at 10:00 and should last about 40 minutes with a Q & A at the end of the program.

The ReadyTalk system is a call-in and web site login system which provides an audio presentation over the phone and a video presentation over the internet.   All that is needed to participate is a computer with internet access and a phone to call a toll free number.

Select sessions include featured presenters which will include the Internal Revenue Service Officials to discuss tax incentives, Economic and Community Development Institute to discuss the Microloan Program and
KeyBank to discuss lending and vital Key programs.

• June 09, 2009 – SBA Programs – will share updates on SBA’s programs
• June 16, 2009 – Economic & Community Development Institute – discuss the Microloan Program
• June 23, 2009 – SBA Programs – will share updates on SBA’s programs
• July 07, 2009 – KeyBank – will discuss lending and Key Programs
• July 14, 2009 – SBA Programs – will share updates on SBA’s programs
• July 21, 2009 – Internal Revenue Service – will share tax incentives affecting small business

These Webinars are FREE, but you will need to make a reservation by sending an e-
mail to Shannon.Feucht[at]sba.gov . Be sure to mention which session you are
interested in attending.

Links:

• Small Business Administration Website
• Follow SBA news & announcements on Twitter: SBA
• SBA Loan Programs

WASHINGTON, D.C. – Fifteen small business owners and leaders of small
business support organizations were hailed today by the U.S. Small Business
Administration for their outstanding support of entrepreneurs.  The 15
Champion Awards were presented today in Washington, D.C., as part of the
annual observance of National Small Business Week.

The Champion Awards were presented at the Champion Award Winners
Luncheon.

“The SBA is proud to honor these men and women as true champions of small
business, whose tireless efforts have provided tangible and significant support
to small businesses and to their communities,” said SBA Administrator Karen G.
Mills.  “They provide the counseling, advice and support that small business
owners need, and foster an environment in which the spirit of entrepreneurship
can flourish.”

This year’s Champion Awards recognize winners from Arizona, Maryland,
Michigan, Missouri, Pennsylvania, Utah and Wisconsin. For more detailed
information on all the winners please go to
http://www.nationalsmallbusinessweek.com/ and click on Winners

The winners are:
2009 National Financial Services Champion
Marilyn Landis
President & CEO
Basic Business Concepts, Inc.
Pittsburgh, Pennsylvania

2009 National SBA Young Entrepreneurs
Stephen C. Voudouris
Christopher R. Francy
Andrew S. Voudouris
Owners
Xoxide, Inc.
Malvern, Pennsylvania

2009 National Veteran Champion
Charles M. Baker
President & CEO
MCB Lighting & Electrical & Government Logistics Solutions
Owings, Maryland

2009 National Exporter of the Year
Andrew Kruse
Executive Vice President for
Business Development
Southwest Wind Power
Flagstaff, Arizona

2009 Jeffrey Butland Family-Owned Business of the Year
Timothy S. Parker
President
Harbor Industries, Inc.
Grand Haven, Michigan

2009 National Home Based Business Champion
Nancy Reading, Jenny Cox
Barb McGann, Kris Simeona
Founders
Small Business Incubation Center
Cedar Edge Medical, LLC
Blanding, Utah

2009 National Small Business Journalist
Joanne Quinn Smith
President
Dreamweaver Marketing
Positively Pittsburgh Live Magazine
Pittsburgh, Pennsylvania

2009 National Minority Champion
Eddie G. Davis
Principal
DaLite & Associates, LLC
St. Louis, Missouri

2009 National Women in Business Champion
Laurie Benson
CEO & Co-Founder
Inacom Information Systems
Madison, Wisconsin

2009 Entrepreneurial Success
Avinash Rachmale
President & CEO
Lakeshore Engineering Services, Inc.
Detroit, Michigan

For more information on Small Business Week 2009, including a schedule of events and information on all award winners, visit
www.nationalsmallbusinessweek.com.

SBA: www.sba.gov

SBA on twitter: @smallbusinessad