Judith Roussel of the Small Business Administration explains government loans available to small businesses.
The U.S. Small Business Administration (SBA) recently changed its definition of a small vending business, making more companies eligible for SBA loans. Judith Roussel, Illinois district director of the SBA, explained the programs at the National Automatic Merchandising Association (NAMA) OneShow in Chicago during the government affairs symposium.
A vending business can qualify for SBA loans if they have annual sales up to $10 million, Roussel said. The previous limit was $8 million.
Ned Monroe, NAMA senior vice president of government affairs, said 97 percent of vending companies qualify for SBA loans under the new definition.
In addition to loans, SBA provides free counseling through an organization called SCORE and through Small Business Development Centers, Roussel said.
The assistance includes help with obtaining a loan as well as other business issues, including marketing, Internet use, social media marketing.
She said SBA also has business workshops that charge a nominal fee.
Roussel described the various loan programs.
The 7a loan is a general purpose loan, for buying inventory, equipment and real estate. Under this program, a commercial lender provides the loan and the SBA guarantees up to 90 percent of the amount.
The maximum 7a loan is $5 million. The term can be as long as 10 years for working capital or equipment and as long as 20 years for real estate, Roussel said.
The 504 loan can be up to $12.5 million and is for long term financing.
Under the Small Business Jobs Act of 2010, Roussel said SBA has a 2-page loan application offering 5- to 10-day turnaround.
In response to a question from the audience, Roussel said loan applicants don't have to be certified for most SBA programs.
For more information, go to www.sba.gov.