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SBA loan, contract assistance, business matchmaking are potent combination for small business creation, growth

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The U.S. Small Business Administration (SBA) and its partners help millions of existing and prospective small business owners start, grow and succeed. SBA and its partners can help entrepreneurs with SBA guaranteed loans, counseling, training and contracting opportunities.

SBA also helps businesses and families recover from disasters with loans and serves as a voice for small business, helping reduce regulatory impact on small firms.

Each month, this Daily Transcript section will provide information on programs to help start, expand and manage small businesses.

Financing your business — SBA loans

While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second. Whether you’re starting a business or expanding one, sufficient ready capital is essential. But it is not enough to simply have sufficient financing; knowledge and planning are required to manage it well. These qualities ensure that entrepreneurs avoid common mistakes like securing the wrong type of financing, miscalculating the amount required or underestimating the cost of borrowing money.

There are many sources for financing: the U.S. Small Business Administration (SBA) in partnership with banks and non-bank lenders are among the most common. SBA guaranteed lending program encourages banks and non-bank lenders to make long-term loans to small firms by reducing their risk and leveraging the funds they have available. SBA loans range from $5,000 to $2 million. SBA’s programs have been an integral part of the success stories of tens of thousands of firms nationally. SBA San Diego lending should reach 1,400 loans for $400 million in fiscal year 2005, ending Sept. 30.

Government contracting

The U.S. government is the world’s largest buyer of products and services. Military and civilian purchases exceed $240 billion a year and range from spacecraft to pencils. By law, federal agencies must establish contract goals, such that 23 percent of all buys go to small firms. Contract goals are established for women and disadvantaged, HUBZones and service disabled veteran-owned businesses. Federal agencies must reach out to these communities in seeking contractors. It is up to you to market and match your business products and services to the buying needs of federal agencies.

Selling to the federal government is similar to selling to the private sector. While federal procurement procedures may have different regulations, the same marketing techniques you already employ may work here. Use your common business sense.

Some tips: Get to know the agency and understand the context in which your product or service could be used. Before going forward, take a moment to think about your company’s products and services. Take a close look at your company and consider what the government will look for when considering your company for a contract award. Financial status, staff capabilities and track record are important.

Small business success

One company that used SBA assistance with loans and contracts is Sullivan International Group Inc., (Sullivan), established in 1998 by Steven Sullivan.

In 1999, Sullivan obtained the first of two SBA micro loans, allowing him to obtain new clients and hire a former Navy colleague, Bill Ulmer, to handle existing clients. These micro loans and the equity from both of their homes helped Sullivan survive the difficult first three years.

In 2002, Sullivan secured an SBA 7(a) Loan to acquire an environmental engineering company, enabling him to win more than $60 million in contracts.

Sullivan started in environmental, health and safety. Sullivan now has three divisions, Engineering (remediation and construction), Technology (network, computing, defense and Web technologies), and Logistics (facilities and quality management). Sullivan’s SBA’s 8(a) and other certifications, and its ability to respond to change, exceeding client expectations, set Sullivan apart and enable his company to obtain contracts with government and large primes. Sullivan is one of the nation’s fastest growing firms.

SBA business matchmaking

Business Matchmaking (BMM) matches small firms with federal, state and local government agencies and large primes that have contract opportunities for small firms’ products and services. The program stimulates jobs and growth for small business by getting opportunities normally available in areas such as Washington, D.C. BMM combines expert education and counseling with matchmaking.

BMM is in its third year and has received numerous accolades from participating small firm and participating government and corporate procurement organizations. Since inception, BMM has matched small business sellers with procurement representative buyers in more than 23,000 appointments, resulting in more than $26 million in contracts. To learn more about BMM, visit www.businessmatchmaking.com.

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