Welcome to the Fall Edition of the Pacific Region Quarterly!
SBA just wrapped up another great fiscal year at the end of September and the results are in! Nationally, SBA supported more than $30.25 billion to over 53,000 small businesses. Once again, SBA's Region IX led the country in loan dollars supported, with over 8,820 SBA loans approved in FY 2012 for a total of more than $6.68 billion, outperforming FY 2011 activity by more than $265 million. Region IX has led the way every year since 2009 and has contributed greatly toward the SBA posting the two best years in agency history.
The increased level of activity in SBA lending is a great indicator that we're gaining momentum and shows our economy is getting stronger on a daily basis. The increase of more than a quarter of a billion dollars loaned in the region in FY2012 should encourage more entrepreneurs and small business owners to seek the capital they need to start, grow and create jobs.
In spite of these loan numbers, we still have work to do. I've had the opportunity to talk to many small business owners about their challenges getting access to capital. Over the past year, SBA has worked to meet this challenge by streamlining and simplifying many of the loan programs in order to provide more access and opportunity for both lenders and small businesses. We saw a big jump in a number of these products.
For example, the reengineered CAPLines loan program recorded an increase of almost 400 percent in loan volume and 249 percent in dollar volume. The revamped program, which provides working lines of capital to small businesses, jumped from 108 loans and $118 million in FY 2011, to 532 loans and $410 million nationally in FY 2012.
Streamlining the Small Loan Advantage (SLA) and Community Advantage programs helped lenders make low-dollar loans which are an important tool for many small businesses. Community Advantage jumped from 15 loans and $2.1 million in FY 2011 to 188 loans for over $25 million in FY 2012. Small Loan Advantage ended FY 2012 with 820 loans for $105.6 million. Nearly 80 percent of the year’s Small Loan Advantage lending came after SBA implemented simplified processes on June 1.
We’re looking forward to helping even more of you in this
new fiscal year. We’d love to hear from you, so drop us a line.
Regional Administrator Echols with Yolanda Lewis, President of the Black Economic Council (BEC). RA Echols spoke at the BEC's awards event in Oakland, CA, which also served as a tribute to Len Canty, BEC's founder and chairman, who passed away in September.
Regional Administrator Echols speaking at the California Hispanic Chambers of Commerce annual convention in San Diego, CA.
Regional Administrator Echols presents an award at the Native American Business Symposium in Nevada.
SBA teamed up with AARP to present National Encore Entrepreneur Mentor Day on October 2nd. Pictured are attendees of the local event in Costa Mesa, CA.
Preparing Your Small Business for Holiday Season with the SBA
The holiday shopping season is around the corner. According to the National Retail Federation’s Holiday Consumer Spending Survey, holiday sales will increase 4.1 percent this year. It’s never too early for small businesses to prepare for the holiday rush. Whether it’s financing your seasonal working capital needs, updating your marketing plan or hiring temporary workers, the Small Business Administration can be your guide to maximizing sales this holiday season.
Get help financing your seasonal working capital needs
If you need help meeting your short-term and cyclical working capital needs, SBA’s CAPLines Program might be for you. From contracting to purchase orders, CAPLines provides financing through a revolving line of credit. This helps more small businesses get the cash-on-hand to manage their cash cycle, scale up and create jobs. The SBA streamlined the program this year to make it easier for small business owners to get financing even if collateral is tight.
Hiring temporary or seasonal workers
If you plan to hire temporary or seasonal workers, be aware that some of the laws and regulations that apply to full-time employees differ from those that apply to seasonal or part-time employees. For example, independent contractors and employees are not the same, and it's important to understand the difference. Don’t forget that labor laws still apply to seasonal workers, as do some benefit and tax laws.
Holiday marketing tips
There are endless ways to promote your small business during the holiday season. Here are just a few budget-friendly tips that you can consider:
- Use your website and social media to
promote your business
– This is true year-round, but your online presence, email marketing, and
social media networks are great ways to target and connect with local consumers
during the holiday season, whether it’s through timely updates, compelling
calls-to-action and promotions or discounts.
You may want to consider developing holiday themes for your email
templates and update your website and Facebook profile picture with a festive
- Host an Open House – You can use
the holiday season as an opportunity to “open” your business and give customers
an opportunity to check out your merchandise or holiday menus.
- Get Involved in Community and Charitable
– Supporting a charity or sponsoring a community event is a great way to
generate awareness for your business during the holidays. Even if you don’t have the budget to donate
large sums of money, think of other ways to get involved, such as offering
volunteer services, equipment or even space.
Small Business Saturday
Don’t forget that Small Business Saturday is Saturday, November 24. If you are a small business, get involved with this nationwide initiative. You can access free marketing materials, including sample posters, press releases and social media updates by visiting www.smallbusinesssaturday.com. If you are a consumer, support a small business in your community by shopping at one that Saturday.
The holiday season can be overwhelming for some small businesses. The SBA is here to help. Our goal is to provide the tools and resources for small businesses to start, grow and succeed. Visit SBA’s website www.sba.gov to learn more about preparing your small business for the holiday season or to find your local SBA office for one-on-one service.
SBA's Growth Capital Program Sets Record For Third Year in a Row
The U.S. Small Business Administration’s Small Business Investment Company (SBIC) debenture program provided a record $2.95 billion to small businesses in fiscal year 2012, a 14 percent increase over last year’s $2.59 billion and an 85 percent increase over 2010, also a record year.
“Over the past three years SBA has transformed the SBIC program to ensure small businesses have greater access to SBIC funds,” said SBA Administrator Karen Mills. “These record-setting numbers are proof that our efforts to streamline and simplify the process have made it possible to get capital into the hands of small businesses more quickly. When an SBIC invests in a small business, it can scale up and create jobs.”
High-growth small businesses continue to face difficulties in accessing patient, long-term capital to grow and create jobs. Since 1958, the SBIC program has helped fill these gaps and has invested approximately $63 billion in more than 110,000 small businesses in the United States.
The FY 2012 volume is the highest single-year volume in the 54-year history of SBA’s SBIC debenture program. Increased volume in the program is due in part to a number of improvements that contributed to an increased number of new SBIC licenses and reduced license processing times.
The SBIC program was created in 1958 to stimulate the growth of America’s small businesses by supplementing the long-term debt and private-equity capital available to them. SBA’s SBIC FY 2012 results included the following:
• Record High Financing to Small Businesses: Total financings to small businesses by SBA’s SBIC debenture program grew to a 54-year record high of $2.95 billion in FY 2012 – 14 percent more than in FY 2011.
• Record High SBA Capital Commitment to SBIC Funds: SBA capital commitments to debenture funds broke another record, increasing to $1.92 billion in FY 2012, up from $1.82 billion in FY 2011.
• Record High Private Capital Attracted to SBIC Program: The SBIC debenture program has attracted more initial private sector capital in FY 2012 than in any year in the history of the program – approximately $1 billion compared to $840 million in FY 2011, the previous high. The average debenture SBIC has raised more than twice the private capital than the average debenture fund of a decade ago.
• More Licensed Debenture SBICs and Faster Processing Times: Thirty new debenture and unleveraged SBIC licenses were issued in FY 2012, exceeding last year’s total of 22 by 36 percent. Additionally, SBIC license processing time improved to just 5.4 months in FY 2012, down from 14.6 months in 2009.
SBICs are privately-owned and managed investment firms that are licensed and regulated by SBA. SBICs use a combination of funds raised from private sources and money raised through the use of SBA guarantees to make equity and mezzanine capital investments in small businesses. There are 301 SBICs with more than $18 billion in capital under management.
As part of the President’s Startup America initiative, the SBA leveraged the SBIC program to launch two initiatives with up to $1 billion in leveraged commitments each for impact investments and early stage investments. These commitments are available to SBICs targeting early-stage firms or businesses located in targeted economic areas or industries.
For more information about the SBA’s Investment Division, SBIC program, Impact Investment Initiative and Early Stage Innovation Fund, go to www.sba.gov/INV.
SBA Loans to Small Business Exporters on the Rise
SBA-backed loans to exporters continued to grow in FY2012, reaching more than $923 million, which supported $1.7 billion in small business exports.
“Giving small businesses the tools they need to export their goods and services and create jobs is an important part of our core mission,” said SBA Administrator Karen Mills. “Exporting is creating opportunities for small businesses to create good-paying jobs and provide economic benefits to local communities nationwide.”
SBA has recently revamped its International Trade Loan which has seen an upsurge of 106 percent in loans guaranteed and 207 percent in dollar volume. The loan allows small manufacturers to expand their facilities or buy equipment to manufacture products sold internationally, either directly or indirectly through an Export Trading Company or an Export Management Company.
Since 2009, SBA has guaranteed 6,100 loans to small business exporters for over $3.1 billion and supported more than $6 billion in exports.
For more information about the SBA, its international trade programs and services and future export matchmaker events, visit www.sba.gov/OIT.