By Ina Paiva Cordle
Clare Whelan knows firsthand how hard it is to secure the vital funding necessary to keep a small business afloat.
Last year, her Little Haiti-based commercial carpentry and welding firm, Doors Inc., “had no working capital and no way to get any” — until SCORE helped her get a $50,000 loan from Miami Bayside Foundation.
“Now, we’re in a situation where we are seeing more contracts coming up, but the credit line is not there for working capital, and we definitely continue to need some help,” said Whelan, Doors Inc.’s president and chief executive. “The big clients, like the hospitals, require 30 to 45 days to pay, and it’s very difficult for us to front the cost of materials and pay our guys every week or every two weeks.”
For businesses like Whelan’s federal assistance might be on the way. (Photo shows Clare at Doors Inc. during her Miami Herald Small Business Makeover last year.)
On Wednesday, the Obama administration announced several initiatives geared to help small businesses expand and create jobs, reduce paperwork, make it easier to access loans through the Small Business Administration, and get tax credits.
Marjorie Weber, chair for SCORE Miami-Dade, said the moves will hopefully make it easier for South Florida businesses to get SBA-guaranteed loans and spur banks to participate in SBA programs.
“The demand is there,” Weber said. “People get upset because the process is so slow and complicated, and the paperwork is so much more intense than going conventionally, but the SBA terms are usually much more favorable.”
The SBA is relaunching “Small Loan Advantage,” one of its key small dollar loan products, as “SLA 2.0.”
The revamped program raises the maximum loan amount from $250,000 to $350,000, streamlines the loan process, and makes it easier for lenders to extend loans, the government said.
The SBA is also changing its process for businesses to get surety bond guarantees under $250,000, eliminating the need for contractors to complete five unnecessary forms to apply for the bonds. The move is aimed at making it easier for small businesses, particularly in the construction industry, to get contracts, the White House said.
Another initiative cuts down on the application process for the SBA’s Disaster Loan Program; while yet another will accelerate federal payments to small business subcontractors.
In addition, President Barack Obama is calling on Congress to let small businesses write off up to $250,000 in capital investments, such as machinery and equipment, in 2013.
That proposal, in particular, would be a major boon for small businesses, said Brian Clay, executive vice president and Business Banking director at Miami Lakes-based BankUnited.
“It’s all positive,” Clay said. “It is all in line to expedite small businesses getting access to credit, and in some cases, it will prompt them to reenter the credit markets and apply for credits.”
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What do you think? Will these initiatives help your business? Has securing a loan been hard for you?