Seeing the forest through the trees
Occupational transition.
It happens. It’s been happening a lot lately in this economy. Typically it is not a chosen state of being, but good people are finding themselves out of a “JOB” and are trying to write their next chapter of their career.
I get calls from these folks when they think the answer to their job security is to become their own boss.
When it happened more recently to a friend of mine, I met with him over coffee to find out what serendipitous move he was about to make. . He wasn’t looking to purchase a company – quite the opposite. He was evaluating a number of potential opportunities. He was one of the lucky ones.
What struck me in this conversation was he had done quite a bit of self-evaluation and networking. He had a scattershot of great opportunities in the pipeline - all based on his skill set. Since he had a non-compete clause, he felt he was going to have to make a complete industry change, but his passion lay deep in the field of health care. After working as a regional sales consultant for an HR outsourcing firm for two years ad a PEO sales manager for six years, his client resources ran deep and his knowledge immense. It seemed a shame to walk away from that entirely as it would never be a valuable as it is right at this moment.
After talking for an hour, together we formulated the beginnings of his own consulting practice which was a natural compliment to his expertise. He previously was selling human resource outsourcing, now he would help companies evaluate their current health benefits analysis as an independent third party to review and provide insight as to the best options to take.
It probably skirts on the fringes of his non-compete and he’s doing a bit of attorney review, but what struck me is the similarities to many of the buyers that I encounter.
Buyers see business listings like a kid in a candy store. Wouldn’t it be fun to… I’ve always wanted to run a …… My uncle had a ……….. All well and good, except it ignores the forest for the trees.
As an entrepreneur, you have to be cognizant of your skills, but to ignore your background and experience is a sure-fire way to eliminate yourself from the running for bank financing and at the same time, to turn-off a seller. We’ve had office discussions about a buyer-seller meeting gone bad recently where the buyer met seller for the first time and repeatedly said, “I don’t know anything about your business.” That type of talk doesn’t exactly build confidence in the eyes of the seller. And when Seller’s acting as the bank by offering up seller financing, you can bet that freshman Buyer’s offer is not going to be accepted enthusiastically.
I agree, it’s tough when you’re trying to reinvent yourself and break the mold to simply walk away from who you were. But as a wise man said to me just yesterday, “I love the quote from Harvey MacKay, ‘No matter where you go, there you are.’.” I believe it’s a mistake to walk away from your warm network. And to think of it, I think I may need to pass out a few copies of Harvey’s book “Dig Your Well Before You’re Thirsty…”
PS – If you have an HR outsourcing project that you’d like a consultant’s opinion on and would like contact information for my friend, please leave me comments below on how to reach you and I’ll make that connection for you.
Sam’s Club is offering small business loans
They really do now offer everything.
Take it from Will, Business Brokers can help you gain market share faster
I had lunch with my client, Will Baccich, CEO of Global Data Vault and clunkily interviewed him about his experience using our strategic acquisition services. Watch and see how I was able to help him gain market share through targeted buying of companies in his market space.
If you aren’t acquainted with Global Data Vault, they are a premier off-site data backup service that allow me to sleep at night knowing that my data is safe no matter what disaster may occur. I had a motherboard fail on me last week and my GDV heroes came to my rescue with a full back-up of all my system files. Back up and running in no time! Tah-dah!
Here’s Will’s story:
The 5 worst things buyers say in their first phone call
As an intermediary, we are accustomed to working with all walks of life. The most telling however, may be the unwitting new buyer that makes a call to our office regarding a listing. The burgeoning entrepreneur who decides one day that he’s had it with his job and he wants to purchase a business where he can be his or her own boss, darnit. I say more power to you, pick up that phone! My direct line is 469.293.1397. But to keep it a little more interesting, please Mr. Buyer, we know that you are new to the game if you start with any of the statements on this list. We still want to work with you, newbie that you are, but I’m going to do you a favor and give you just a little leg up so the next time you call, you sound just a wee bit more professional, and the intermediary on the other end actually stops chewing their morning bagel long enough to give you the time of day. Because we want to work with you, we do. Really. But you’re showing your inexperience straight out of the gate if you lead off with any (or all) of these in our first conversation:
The 5 worst things buyerssay in their first phone call:
- I’m interested in listing #123456. What business is this? Where is it located?
- Money is not a problem. I have great credit and investors that are willing to help me on the right deal. I can buy any size business.
- I’m looking for a business that I can invest about $50k or less in and I want to earn $200K per year profit. What do you have?
- I haven’t locked in on one particular industry, I’m really open to all opportunities. What do you have available? Can you help me find something if I don’t like what listings you have?
- Is this XYZ company that Joe Smith has listed?
Now if any of the above sound like reasonable statements, my apologies. I tend to be a straight-shooter so let me explain the hilarity from a broker’s perspective in detail one-by-one:
1. 1. I’m interested in listing #123456. What business is this? Where is it located?
This is funny (to brokers) because if you’ve found the carefully crafted listing among the many other like listings, the one commonality you will quickly ascertain is that everything is confidential. This industry is not residential or commercial real estate. We don’t post the business name or the address and put a sign out front since, let’s face it. If the competition knew that the company was for sale, they could really do some damage. Or the employees would leave if they thought there wasn’t job security. Or the customer’s might lose confidence in the business stability. So just because you called in on the advertisement does not mean that we are so grateful that we spill the beans. In fact, if you read most of the business for sale websites, you’ll see that there are non-disclosure statements or forms included on them.We are actually contracted by our clients not to reveal this information without first making sure you may be an appropriate fit and have received asigned confidentiality agreement from you.
2. 2. Money is not a problem. I have great creditand investors that are willing to help me on the right deal. I can buy any sizebusiness.
I honestly hope that in your case this is the truth but if I had a dollar for every time I heard this, I wouldn’t need to collect a commission and sell anything. First of all, many deals these days are not bank financeable (and what bank is financing, ha, ha…) so your great creditis fantastic but convincing the seller to be your bank or paying in cash is what your main concern should be. Second, your “investors” are not really INVESTORS to us unless you bring a letter of commitment from them stating whatthey are willing to commit to investing in and how much. Otherwise to us, it’s your golf buddies that have some extra dough and were feeling generous over afew beers, because when it comes right down to it, they probably aren’t as serious about your job restlessness as you are. Show us the money and we’llbelieve you have investors.
3. I’m looking for a business that I can invest about $50k or less in and I want to earn $200K per year profit. What do you have?
Some oceanfront property in Arizona to sell you? Seriously, I get this call and it cracks me up. Buyers are only willing to put in $50k but want a return in their first year of $200k. Who wouldn’t make that investment?! And what seller is going to sell for that instead of keeping it? If this doesn’t make sense to you, don’t buy a business…. You need to keep your day job.
4. I haven’t locked in on one particular industry, I’m really open to all opportunities. What do you have available? Can you help me find something if I don’t like the listings you have?
This is a phone call that screams, RUN. Major time waster from our perspective. And I’m sorry, I’m being brutally honest here. As a buyer, you do need to do some homework before you start calling on every random opportunity. Start with what you know you DON’T want to do and begin to narrow it down. Then go with your ideal business and focus on that for a while and see what’s available. Business Brokers are not career counselors. We have opportunities available, or we can find clearly defined targeted companies to acquire, but we are terrible at the ambiguous. Give us parameters and we can figure it out, but hugging jello is not our expertise.
5. Is this XYZ company that Joe Smith haslisted?
Intermediaries work on exclusive listings. Rarely if ever do we take an open listing. If our client-owner has it listed with two brokers, that’s a huge red flag that we will sort out among attorneys and is somewhat rare. But more importantly what this question actually tells us is a) you can’t be trusted with confidentiality since you just told me that XYZ company is listed with my competitor; b) you are already working with another broker so there’s no need for me to go to extra mile to create a relationship with you.
So Mr. Buyer, I’ve given you tough love to illuminate a few of the reasons that your initial phone call may not be as revealing as you thought it should have been. If you got off on the wrong foot with the intermediary or perhaps you felt he/she wasn’t as helpful as they should have been, rewind the conversationin your head and see if you accidentally sent a signal that set off our newbie radar. It’s okay, we all make mistakes. The good news is that as business brokers, we still need to make deals happen and we’re generally pretty forgiving folks when it comes to this kind of thing. Just pick up the phone again and introduce yourself, tell us why you feel that you may be a good fit for the business and ask what information would be available (if anything more than what’s available online) prior to signing confidentiality so that you can evaluate whether you would like to go to the next step. That’s a professional lead-in that will open a productive dialog between the intermediary and yourself.
When convenience isn’t the “Best Buy”
Yeah, it’s a Monday. What other day of the week would your motherboard pass onto to that great spirit in the sky? I’ve seen it coming, and despite my self-diagnosis and RAM replacement, it still got the better of me.
Flatlined. There’s whirring, but no picture.
I called a couple of computer repair places and Geek Squad at Best Buy said they could tell right away if it’s the motherboard so I wheeled my lifeless tower in on their bright blue shopping cart gurney for the diagnosis.
“You see those little knobs there where they are sticking up, not like the others? That means your motherboard is fried.”
Confirmed. It’s toast.
Truthfully, I didn’t think they looked particularly different. I was hoping this wasn’t like a woman going to the mechanic and trying to evaluate the work under the hood. But I knew the machine didn’t work, that was obvious. I wouldn’t argue.
I just knew this machine would alienate me. That’s why I used an online data back-up service from day one. That’s probably why Geek Squad didn’t have to call the psychiatric ward when they delivered the news. There’s a peace of mind knowing that even though your computer is a gonner, your data is secure, just patiently waiting for your next shiny new techy bauble to download and restore to. I use Global Data Vault and I’ve been sleeping soundly for years thanks to them. Getting the info back, easy. Finding a replacement computer is a hassle only comparable to buying a new car. It’s a pain in the you-know-where.
So here I am, alone, in the computer department, mourning the loss of my motherboard. Griefstricken, I begin to wander the asiles, wondering… do I go with another PC or do I finally make the leap to Mac? I really want a Mac. I wanted one when I bought this blasted PC. Maybe this is a sign from above to do it, do it now.
A blue shirt walks by, “Can I help with anything?” He doesn’t pause, keeps walking.
“Yes, actually you can.”
Blue shirt stops. Turns slightly. Allows me to approach him.
“I am thinking of changing my work environment from a PC to a Mac and have some questions.”
Blue shirt looks over my right shoulder, “Okay.”
Truthfully, I was hoping for him to ask me a question about my computer requirements since I have no idea what I don’t know at this point. I’m still reeling from realization of the impending financial investment which I wasn’t mentally prepared to make on this rather random Monday. He’s clearly not going to speak until spoken to. I proceed. His eyes flit to me momentarily and then go back to somewhere he’d rather be over my right shoulder. His body is angled for quick escape.
“Well, I’m not sure what I would need to convert my data. Since all of my files are in Microsoft, is there special software I need? What does that involve?” I admit it, I’m clueless. I haven’t researched this. I haven’t needed to before this instant. This is an exploratory mission. I need a new computer. Today. I need one now. It may be a stupid question, but I don’t know. I’m looking for guidance Obiwan.
Blue shirt says, “You need Microsoft Office.”
I’m thinking he didn’t understand my question as I just said of files were PC formatted. Duh, they were created in Microsoft Office. Yes. I don’t realize that Apple has Microsoft Office. I thought that was a, you know, PC thing. Like, “I’m a Mac and You’re a PC…”
I repeat, “Microsoft? Office?”
Blue Shirt, clearly annoyed, “Yeah, Microsoft Office.”
So then I ask, “Do I need to run dual operating systems?” I happen to know that Mac’s can do this. Not totally in the dark, I guess.
Blue Shirt, still annoyed, “No. You just need Microsoft Office.”
I’m not getting it and now I’m beginning to feel stupid. I do a quick eye scan but there are no software boxes around me that say, “Microsoft Office for Mac” to validate what he’s stating to me. But what I am getting is that Blue Shirt is still not looking at me. Still not facing me. Has not asked me one single question about what I need until….
“So, are you ready to buy a Mac today?”
Ha, ha, ha, ha, ha, ha….. The abruptness is so absurd to me that I looked around for the Candid Camera. They must be making a training video somewhere of what not to do when approached by a customer.
“No, no I am not.” And I walked out, tweeting madly about my horrible experience.
Best Buy had the golden opportunity to make a sale with me. I was devastated over the loss of my computer. I had an obvious NEED. Ironically, they have shelves and shelves of what I needed to buy. If the Geek Squad – which by the way, was great. They didn’t even charge me — but had they said, “Ma’am, I am so sorry that your motherboard has passed on. Let me get one of our specialists to assist you to find a replacement.” That salesperson couldn’t have asked for a better scenario to extract from me exactly what my pain was, find me the perfect solution and sell me on the spot, saving me a ton of time and effort, and I probably would have been willing to overpay in the process.
Instead, I left tire marks in the parking lot I couldn’t get out of there quick enough.
The rest of the evening went like this. I picked up my two-year-old from daycare and went to the Apple store where we had a lovely 30 minute conversation with John who not only looked me in the eye, complimented me on the adorableness of my child, (she is quite cute) noted that since I was in a suit, I clearly had both business and personal needs for this computer and answered every one of my questions, completely, AND gave me websites to look up additional information. My child happily played on the children’s computers and when she was done with that, John showed her how easy it is to make videos on the iMac. (She loved the elephants.)
Every experience I’ve had at the Apple store has left me smiling. I’ve come out more knowledgeable each time and my daughter never wants to leave. Most likely I’ll be returning to purchase an iMac tomorrow. And I’ll be returning to Best Buy when H.E.double hockey sticks freezes over.
What Good Companies Do in a Bad Economy
I’ve been talking to a lot of business owners about selling their business and the common cry among them is that their revenues are in the tank, or at the very least, flatlined. They’ve taken a hit with the economy and are still waiting for a rebound.
“Waiting” would be the operative word here.
I don’t talk to many business owners who are telling me how they have feet on the street to get new business. There are no conversations about how they are embracing the new social media to impact their bottom line. I have yet to have one give lip service to the tried and true old-school techniques for how to win new clients.
Many of them are just riding “it” out. There’s no proactivity there.
They all have a long list of how they’ve cut back expenses, trimmed employees, found ways to save money with new suppliers, etc. All things that I certainly commend them for doing because you know it was a heart-wrenching exercise, but at what point do you begin to cut your nose to spite your face? And is it always wise to just surrender to your enemy without any new strategy of attack?
I promise not to take you back to MBA school case studies, but let’s pause for a minute to examine the strategy of three prominent companies:
Apple
Southwest Airlines
Starbucks
No doubt they’ve had to trim the fat in the recent years. Sure, they have deep pockets that can’t compare to the rest of small business USA, but guess what? They’re not crawling in a hole and waiting for the good times to roll again. They’re not in a stall pattern; they are making adjustments AND moving the ball forward – even if forward is uphill. And it’s paying off.
Apple:
“While many companies have been forced to cut back on their investment or close their doors completely, Apple is expanding its retail presence. Not only is the company building new retail stores, it is also renovating existing stores to better fit the messaging of the company.”
http://news.cnet.com/8301-13579_3-10251114-37.html
Yeah, I’m about to purchase my fourth iPhone on June 15th and have fondled many an iPad. (Exercising restraint for the first time, I vow to be getting the next generation as soon as it hits the web.) Apple continues to invest in every aspect of its company and they are making big gains and winning fans like me. Just a couple weeks ago they made news for their market value exceeding Microsoft. Woot!
Southwest Airlines:
“Southwest, the only airline not to have layoffs after 9/11…. (is) now the largest domestic U.S. airline and has a market capitalization bigger than all its domestic competitors combined.”
This article
http://www.newsweek.com/2010/02/04/lay-off-the-layoffs.html
gives strong argument to why layoffs are not always in the best interest of the company.
“There’s substantial research into the physical and health effects of downsizing on employees—research that reinforces the seemingly hyperbolic notion that layoffs are literally killing people. … The study concluded that the growth in productivity during the 1980s could not be attributed to firms becoming “lean and mean.” Wharton professor Peter Cappelli found that labor costs per employee decreased under downsizing, but sales per employee fell, too.”
Well, whattdya know….
And lastly, Starbucks:
My favorite coffeehaus has announced its intention to launch a secondary brand with their Seattle’s Best coffee line. Think Old Navy and Gap, Pottery Barn and Williams Sonoma, “Companies do it because it’s a classic, proven way to grow a business.”
http://money.cnn.com/2010/05/25/news/companies/starbucks_seattles_best.fortune/index.htm
And not to mention, Starbucks has been repeatedly lauded for embracing social media. They can credit their SM campaign with driving 1 million people to their stores on ONE DAY.
http://mashable.com/2010/06/08/starbucks-mashable-summit/
I encourage you to click through to each of the article links. They’ll inspire you to think out of the box on how you as a business owner can continue to do the smart thing and not spend excessively, but it’s time to invest in the health of your business (and by “invest” that does not mean money necessarily). Whether you’re selling today, in a year or in 5 or 10, you want a strong offering and you have to plant the seeds.
Granted, you may not be retail, you may not be an airline, so my examples may not be what you can do right now. But use them as a starting point, ask your peer group who they respect or what they’ve done that’s helped them grow their business. Get on Twitter and find trending topics, follow experts in your industry and listen to what they have to say.
Here are just a few of the folks that I find to be inspiring and worthwhile. Read their blogs, check out their websites, subscribe to their tweets and start getting motivated again.
Sales Integrity – Sales Integrity helps sales professionals, leaders and organizations sell more effectively, operate more efficiently, and earn more money through the delivery of innovative sales and coaching solutions. CEO Sean Piket, subscribe to his blog .
Mashable – Mashable is the world’s largest blog focused exclusively on Web 2.0 and Social Media news. With more than 25 million monthly pageviews, Mashable is the most prolific blog reviewing new Web sites and services, publishing breaking news on what’s new on the web and offering social media resources and guides. Founder and CEO, Pete Cashmore. Get the app for your phone or subscribe to the blog. Follow him on Twitter. Whatever it takes if you want to learn more about social media.
Help A Reporter Out – Watch these emails daily for opportunities to appear in articles everywhere as an expert in your field. It’s FREE publicity. Yeah, you have to skim through it, but if a request fits your specialty it’s free advertising for you. You can also get this on your Twitter feed.
I could fill pages with more, but you can see some of who I follow on Twitter. Do you have other sites you recommend? Please let me know about them!
Show Me the Money!
Good news! SBA loan notes are more than double for the North Texas market for this past fiscal year. Whoa! Double?! Does that mean that the acquisition market for small businesses is warming up? Maybe so…
Who’s doing the deals you ask? Well, according to the SBA, in our market Compass is leading the pack in amount of money loaned, and Chase is tops in terms of number of 7A loans made. And if you’re shopping a deal these days, that’s good information to know.
If you’re in the market to do a deal in North Texas, my bet’s on one of these top five lenders for a decent acquisition (figures as provided by the SBA DFW District Office):
- Compass Bank – $34,926,000 – 79 loans
- JP Morgan Chase Bank – $ 25,471,100 – 146 loans
- Wells Fargo Bank – $23,610,000 – 64 loans
- Community Bank – $23,229,600 – 385 loans
- United Central Bank – $22,561,200 – 52 loans
I won a contest today. It was genius.
I won a contest today.
What impressed me about it wasn’t so much the actual winning part. I’m not even entirely sure what I won.
What impressed me was the implementation and the thought around it.
Here’s the back-story. I’ve known Bronwyn Allen and Jennifer Hamilton of High Profile Staffing (www.highprofilestaffing.com) for years now and have always been impressed with their professionalism and their strategy to business. Since 1987, High Profile has specialized in filling office administrative, human resource and financial positions with offer contract, contract to hire, and direct hire placement. Their success and longevity in the marketplace speaks volumes and as I watch them bloom into a comfortable space in the social media world, I continue to nod my head that they are again leading the pack in the way that they choose to do business.
I’ve been educated by Jennifer before about how High Profile is now adding new facets to their placement process and how important social media is playing into the mix, about how employers are using Facebook and LinkedIn and other online resources to vet out candidates more than ever. It only makes sense that High Profile would be harnessing the power of those tools for their own good as well.
So as I scanned my Facebook feed this morning, High Profiles’ fan page caught my attention. They were running a contest, “High Profile Inc … wants to know… what has been your most memorable or most interesting position? *** Members of our staff will vote a 3 p.m. today for the top 3 responses and gift cards will be awarded to the winners! **
Yeah, I’m game. And in case you were wondering, here’s my response: “An intern at a newspaper in Southern California. I chased wildfires, interviewed famous Hollywood actors (Billy Crystal, Bruno Kirby during a shoot for City Slickers) and the family of a famous cowboy who had recently passed for an obit, wrote music and restaurant reviews, and dressed up as the “newshound” for the local elementary school.”
Mind you, I had some stiff competition and there was some GOOD stuff there to read — but you’ll have to join their fan page though to read them, I’m not going to retype them all here. (It’s worth the join, for more than just this contest, they post great articles and info all the time and I’m not even looking for a job or to hire anyone!)
But here’s what impressed me. They are a staffing company. Get it? Staffing. They want to know about their talent pool, what’s unique about them and the connections those folks have. What better way to get to the really juicy details than to run a crazy contest like that? When the recruiter told me that I won, the light bulb went on and I thought… recruiter… crazy job history….“GENIUS!!!!”
I wonder how many staffing companies are this creative? I can tell you this… We represent a great medical staffing company for sale right now (http://bit.ly/aUmekO ) and they are not doing anything remotely near this relevant for today’s business climate. Granted it’s a different market, but I hope that whoever the new owner becomes takes a page from a thought leader like High Profile. Today’s business needs to embrace the new media and my hat goes off to friends at High Profile.
Health Care Reform – Good for Who’s Business?
I got a phone call this morning from a business owner. And what he said to me caught me off guard. I’ve heard a lot of things from sellers and thought I’d heard pretty much every excuse in the book but this was a new one and fresh out of the gate. And I should have seen it coming.
He said, “I’m afraid of what happened last night.”
I waited. Suspicious but not certain where he was headed. He continued, “I’m working hard to pay my bills, and I don’t want to pay any more. This Health Care Reform isn’t good for small business. I’m afraid of what’s going to happen next. I want to sell my company now.”
Wow.
Now, I don’t tout my political affiliations. In fact, unless you’re in the inner sanctum, you probably don’t know which side of the line I vote on. And you probably don’t know if I go to church or which one I attend, or which kind of shampoo I use for that matter. And I’d like to keep it that way. This post isn’t about that. And my soon-to-be client has no idea what my opinion on Health Care Reform is, and he most likely never will. That’s irrelevant.
What struck me at that moment is that we’re entering into another phase of uneasiness for small business owners. It could work out pretty good for me, being a business broker. I could capitalize on the panic I suppose. Encourage owners to get out while the getting’s good – except most don’t think this we’re in “the good” times right now. From what I see – and this is based solely on profit and loss statements – many are still reeling from the past couple of years and clawing their way back into the black. But for guys like my caller this morning who are looking at retiring in the next 5 years, hmmm. My guess is that they may not be sleeping as easy this evening.
Extension of SBA Recovery Lending Programs Will Support $1.8 Billion in Small Business Lending
WASHINGTON – President Barack Obama signed legislation Tuesday extending until March 28 the U.S. Small Business Administration’s ability to provide small business loans that are enhanced with special provisions of the American Recovery and Reinvestment Act (ARRA), including a higher guarantee of SBA-backed loans and a waiver of loan fees normally paid by borrowers.
SBA estimates the additional funding will support about $1.8 billion in small business lending.
New approvals of eligible loans with the higher guarantee and reduced fees made possible by the Recovery Act are expected to resume on March 10. Loan applications from borrowers in SBA’s Recovery Loan Queue will be funded first, followed by new loan applications.
“These key loan programs have been successful in helping jump-start the economic recovery for America’s small businesses,” said SBA Administrator Karen Mills. “The increased guarantee and reduced fees on SBA loans helped put almost $22 billion into the hands of small business owners and brought more than 1,100 lenders back to SBA loan programs. As a result, average weekly loan approvals by SBA have climbed by 87 percent compared to the weekly average before passage of the Recovery Act.
“We will continue working with the President and with Congress to move forward with proposals for a longer extension for these important program enhancements, as well as higher loan limits, refinancing for commercial property loans and other significant ongoing support for small businesses. Small businesses need the changes the President has called for to ensure that they have the tools they need to drive economic growth and create jobs in communities all across the country.”
As part of the Recovery Act, SBA received $730 million, which included $375 million to increase the SBA guarantee on 7(a) loans to 90 percent and to waive borrower fees on most 7(a) and 504 loans. The funds for these programs were exhausted on Nov. 23, and an additional $125 million was provided in December. Those funds were exhausted in late February.
SBA has implemented the Recovery Loan Queue twice before as part of its temporary transitions back to pre-Recovery Act lending. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of a Recovery Act loan if funding became available from loans canceled for a variety of reasons. Currently there are 652 loan requests totaling $230 million in the Recovery Loan Queue.
The extension signed by President Obama authorizes the higher guarantee levels through March 28, 2010, for 7(a) loans. The fee relief is available until the additional funding is exhausted or the end of the fiscal year on Sept. 30, whichever comes first. As was the case in November and again in February, SBA is prepared to transition into a queue system as the funds start to wind down in order to ensure the maximum simulative effect of the programs and disbursement of funds.
For non-Recovery Act 7(a) or 504 loans already funded during the transition period, this extension does not provide a retroactive guarantee or waived fees. Loans that were funded under non-Recovery Act terms cannot be canceled and resubmitted to take advantage of the Recovery Act extension provisions.
This extension does not affect other SBA Recovery Act programs, including the America’s Recovery Capital (ARC) loan program or the agency’s microloans. Recovery Act funding still remains available for both of those programs.
For more information visit the SBA website at: www.sba.gov/news or contact Hayley Matz (202) 205-6948
