SBA Announces Grants Available for State Trade, Export Promotion

$90 Million Jobs Act Initiative Aimed at Increasing Small Business Exporting

WASHINGTON – Beginning March 1, states can apply for grants from the U.S. Small Business Administration to support efforts to increase exporting by small businesses. The State Trade and Export Promotion (STEP) pilot grant initiative is authorized to provide up to $90 million in grants to states over the next three years.

The STEP pilot grant initiative is aimed at achieving two goals: 1) increase the number of small businesses that want to export and 2) increase the value of exports for those small businesses that currently export. Established by the Small Business Jobs Act of 2010, the 50 states, the District of Columbia and U.S. territories are all eligible to apply for grants, which will be awarded on a competitive basis.

“The global market offers countless opportunities for small business owners who are well positioned to grow their volume and customer base beyond our borders, and in doing so, create good-paying jobs in their local communities,” SBA Administrator Karen Mills said. “These grants, through the partnerships they will create at the state level, will strengthen the support available to help small business take that first step to begin exporting, and for those who are already exporting, grow into additional markets.”

The Jobs Act authorized up to $90 million over three fiscal years, $30 million each year, beginning with the current fiscal year 2011. Individual state project award amounts will vary based on each state’s proposed project plan and budget.

A state may not submit more than one application for a grant under the initiative, but may apply each federal fiscal year through the 3-year term of the pilot grant initiative. Activities that can be supported with grant dollars under this initiative may include: participation in foreign trade missions, foreign market sales trips, subscription services provided by USDOC, design of international marketing products or campaigns, export trade show exhibits, training workshops or other export initiatives that are in line with the goals of the pilot grant initiative.

The STEP pilot grant initiative announcement will be posted at www.Grants.gov  on March 1, 2011. The application period will be March 1 through April 26. Awards for the first year of the grant program will be issued in summer of 2011. See more information at www.sba.gov/STEP.

SBA Launches Temporary Program for Commercial Real Estate Refinancing

Agency will begin accepting refinancing applications Feb. 28 for small businesses facing maturing mortgages, balloon payments

WASHINGTON, D.C. – Small businesses facing maturity of commercial mortgages or balloon payments before Dec. 31, 2012, may be able to refinance their mortgage debt with a 504 loan from the U.S. Small Business Administration under a new, temporary program announced today. 

The new refinancing loan is structured like SBA’s traditional 504, with borrowers committing at least 10 percent equity and working with third-party lending institutions and SBA-approved Certified Development Companies in the standard 50 percent/40 percent split. A key feature of the new program is that it does not require an expansion of the business in order to qualify. 

SBA will begin accepting refinancing applications on Feb. 28. The program, authorized under the Small Business Jobs Act, will be in effect through Sept. 27, 2012.

“The economic downturn of recent years and the declining value of real estate have had a significant, negative impact on many small businesses with mortgages maturing within the next few years,” said SBA Administrator Karen Mills. “As a result, even small businesses that are performing well and making their payments on time could face foreclosure because of the difficulties they face in refinancing and restructuring their mortgage debt. This temporary program is another tool SBA can provide to help these small businesses remain viable and protect jobs.”

The SBA initially will open the program to businesses with immediate need due to impending balloon payments before Dec. 31, 2012.  SBA will revisit the program later and may open it to businesses with balloon payments due after that date or those that can demonstrate strong need in other ways. 

“We are making this initial restriction to make sure our funding goes first to small businesses with the most need,” said Steve Smits, SBA Associate Administrator of Capital Access.

Borrowers will be able to refinance up to 90 percent of the current appraised property value or 100 percent of the outstanding mortgage, whichever is lower, plus eligible refinancing costs.  Loan proceeds may not be used for other business expenses. Existing 504 projects and government-guaranteed loans are not eligible to be refinanced.

Congress authorized SBA to approve up to $15 billion in loans under this program ($7.5 billion in both fiscal 2011 and 2012).  Together with the first mortgage, this temporary program will provide up to $33.8 billion of total project financing.  Additional fees charged to the borrower will cover the cost of this refinancing program and as a result no subsidy will be needed.  The program is expected to benefit as many as 20,000 businesses.

SBA’s traditional 504 loan program is a long-term financing tool, designed to encourage economic development within a community. A 504 loan provides small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

Typically, a 504 project includes three elements: a loan (or first mortgage) secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a second mortgage secured with a junior lien from an SBA Certified Development Company (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business borrower.

SBA Announces Contracting Program For Women-Owned Small Businesses

First Contracts Expected to be Awarded through WOSB Program By Critical Fourth Quarter of Fiscal Year 2011 

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WASHINGTON – Women-owned small businesses can begin taking steps to participate in a new federal contracting program on Friday, Feb. 4, the U.S. Small Business Administration announced today. The new Women-Owned Small Business (WOSB) Federal Contract Program will be fully implemented over the next several months, with the first contracts expected to be awarded by the fourth quarter of fiscal year 2011.

“Implementing the Women-Owned Small Business contracting rule has been a top priority for the Obama Administration and SBA,” said Administrator Karen Mills.  “Women-owned businesses are one of the fastest growing sectors of the economy.  As we continue to look to small businesses to grow, create jobs and lead America into the future, women-owned businesses will play a key role.  That’s why providing them with all the tools necessary to compete for and win federal contracts is so important.  Federal contracts can provide women-owned small businesses with the oxygen they need to take their business to the next level.”

The WOSB Federal Contract Program will provide greater access to federal contracting opportunities for WOSBs and economically-disadvantaged women-owned small businesses (EDWOSBs).  The Program allows contracting officers, for the first time, to set aside specific contracts for certified WOSBs and EDWOSBs and will help federal agencies achieve the existing statutory goal of five percent of federal contracting dollars being awarded to WOSBs.

On Feb. 4, SBA will release instructions on how to participate in the program, as well as launch the secure, online data repository for WOSBs to upload required documents, on its website: www.sba.gov/wosb.  SBA will also release an application to become an SBA-approved third party certifier for this program on that date.  This will be the first version of the application.  SBA welcomes comments and suggestions on this first version of the application.

During the ramp up period over the next several months, SBA is encouraging small business owners to review program requirements and ensure their required documents are uploaded to the repository. WOSBs also will need to update their status in the Central Contractor Registration (CCR) and the Online Representation and Certification Application (ORCA) to indicate to contracting officers that they are eligible to participate.  The General Services Administration is currently updating these systems and they are expected to be completed in April, 2011. 

Similarly, the WOSB rule in the Federal Acquisition Regulation (FAR), which is the companion to the SBA rule, is now going through final review, and is also expected to be issued by April.  With these pieces in place, SBA expects to see the first contracts awarded through the program by the all-important fourth quarter, when the largest percent of federal contracts are awarded. 

Every firm that wishes to participate in the WOSB program must meet the eligibility requirements and either self-certify or obtain third party certification.  At this time, SBA has not approved any third party certifiers.  Regardless of their certification method, WOSBs must also upload required documents proving their eligibility to a secure online data repository developed and maintained by SBA.  

To qualify as a WOSB, a firm must be at least fifty-one percent owned and controlled by one or more women, and primarily managed by one or more women.  The women must be U.S. citizens and the firm must be considered small according to SBA size standards.  To be deemed “economically disadvantaged”, a firm’s owners must meet specific financial requirements set forth in the program regulations. 

The WOSB Program identifies eighty-three four-digit North American Industry Classification Systems (NAICS) codes where WOSBs are underrepresented or substantially underrepresented.   Contracting officers may set aside contracts in these industries if the contract can be awarded at a fair and reasonable price, the contracting officer has a reasonable expectation that two or more WOSBs or EDWOSBs will submit offers for the contract and the anticipated contract price is not greater than $5 million for manufacturing contracts and $3 million for other contracts. 

Each stage of implementation is part of SBA’s mission to make the Program efficient and user-friendly, and to ensure its benefits go only to qualifying WOSBs.  SBA is excited to launch this new program to provide WOSBs with increased opportunities to compete for and win federal contracts, ultimately helping WOSBs create and retain more jobs.

For more information on the Women-Owned Small Business Program or to access the instructions, applications or database, please visit www.sba.gov/wosb.