Great Business Ideas: Get Some Help from Uncle Sam

Great Ideas for your Small Business: Get Some Help from Uncle Sam

Good old uncle sam. he stands there with his finger pointing at you, but most business owners think he should be portrayed with that same bony hand reaching deep into our pockets.

If you’ve ever spent an hour filling out a payroll tax form or dealing with a federal safety inspector, it’s easy to think of the government as an evil entity. But there are many ways the government can actually help grow your small business.

The trick is to figure out what kind of help is available and how to get it. The truth is that the federal government is easier to access than ever. You don’t even need to get in your car to get help from the U.S. Small Business Administration— you just need a computer and a modem.

The SBA’s Business Advisor website (www.business.gov) is a business owner’s one-stop electronic link to government aid. It helps you identify and contact a variety of resources. Vikki Craven, founder of Fly By Night, a flight simulator software company in San Antonio, goes online when she needs help from Uncle Sam. “I spent hours— instead of days—figuring out what resources were available in my area,” she said.

Although there is no such thing as “free money” for small business owners, the SBA provides government guarantees for billions of dollars’ worth of bank loans made to business owners every year. If you need a government-guaranteed loan, check out the SBA’s 7(a) Guaranty program. Details about the loan program are available on the SBA’s home page or by calling the Answer Desk at 800-U-ASK-SBA. The SBA’s “Programs and Services” brochure is a good one to request for a basic overview.

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Greg and Heather Green of Anchorage, Alaska, used an SBA loan to open a Play It Again sports-equipment franchise. The franchise sells used sporting goods at low prices. They started the business in 1992.

There are other loan programs offered by the SBA. The Low Documentation (LowDoc) program relies on a one-page application for loans of $100,000 or less. The application process usually takes three days. There are also CAP Lines to finance short-term, working capital needs for cyclical businesses. Under this program, loan proceeds are usually advanced against a borrower’s existing or anticipated inventory and/or accounts receivable. Some companies need a bridge loan, others just a small cash infusion.

For loans under $25,000, try the Microloan Program. Jim and Carla Italiano used this program for their J&C Coatings in Benson, Arizona. For twelve years, Jim had been working as a painter for other companies. He wanted to start his own business, but needed cash for supplies. “So many times, when we ran out of funds, I thought about quitting,” said his wife, Carla. “But we loved having our own business, and I knew there had to be something, somewhere to help us.”

Fred Little at Western Bank in Lordsburg, New Mexico, was impressed with their determination. “I liked their conservative approach,” said Little. After making a small loan and repaying it, the Italianos applied for $40,000. It was approved and guaranteed by the SBA.

Other SBA–financing programs include:

  • The Certified Development Company Program (Section 504) provides long-term, fixed-asset financing for up to $1 mil- lion.
  • The Surety Bond Guarantee Program provides bid, performance, and payment bonds for contracts up to $1.2 million.
  • The Defense Loan and Technical Assistance (DELTA) pro- gram offers financing and technical help to defense firms trying to diversify into peacetime products.
  • ACE-NET is a nationwide Internet service that tries to match investors with entrepreneurs in need of capital. Companies pay a fee to register with the service.
  • The Minority Prequalification Loan Program helps business owners prepare loan applications for under $250,000. The Women’s Prequal program does the same for women.
  • The Department of Transportation Bonding Assistance Pro- gram provides bonds for businesses working on transportation contracts or subcontracts worth less than $1 million. The DOT also offers short-term loans for minority businesses. For information, call 800-532-1169, or check out the DOT home page at http://osdbuweb.dot.gov.
  • The IRS offers more than 100 free publications to help you file your taxes. The three most popular are Tax Guide for Small Businesses, Taxpayers Starting a Business, and Guide to Free Tax Services. You can call 800-829-1040 to order forms, but the lines are frequently busy. Don’t call in March or April!
  • If you need statistics, demographic, or economic data to write your business plan or to develop a marketing strategy, it’s available through the Economic Statistics Administration at the Department of Commerce. This group also releases Census Bureau data. You can go online to look for numbers at www.stat-usa.gov.
  • The Bureau of Labor Statistics at the Department of Labor is a gold mine of information. Contact the BLS at labstat. [email protected].
  • If you are looking for information on publicly traded companies, the Securities and Exchange Commission provides the EDGAR database via the Internet. This allows access to corporate filings to the SEC. The SEC’s home page also has in- formation on what’s needed to sell stock in your company.
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So don’t be afraid to turn to Uncle Sam for invaluable and affordable help. As Francis Bacon said long ago, “knowledge is power.” And you might as well take advantage of programs paid for by your tax dollars.