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Business Questions

THE 10 QUESTIONS MOST COMMONLY ASKED OF THE U.S. SMALL BUSINESS ADMINISTRATION ľS ANSWER DESK

#1 How do I get a small business loan?
You should prepare a business plan, including your loan proposal and submit it to a local lender. If the lender is unable to approve your loan, you may request that your application be submitted, by the lender, to the SBA. The SBA can guaranty up to 80% of a small business loan; however, the lender must agree to loaning the money with the SBA guaranty. The lender will then forward the loan application and a credit analysis to the nearest SBA District Office. If the lender needs SBA applications and/or guidance. Contact the nearest SBA District Office by going to the folllowoing website: www.sba.gov/regions/states.html. Upon SBA approval, the lending institution closes the loan and disburses the funds. For further information and eligibility requirements, please go to www.sba.gov and click on financing.
‚Äč#2 How do I get a small business grant?
At this time, Congress has not set aside any monies for grants to start and/or expand a small business. SBA does provide a loan guaranty program for loans made by your local lender. The SBA guarantees loans that the lender could not normally approve. However, all funding is handled through your local lender. For information on this program and ALL of SBA’s financial assistance, please go to www.sba.gov and click on financing.
‚Äč#3 How do I get started in a business?
 The U.S. Small Business Administration (SBA) provides a wealth of information on starting a business at the SBA home page (www.sba.gov) under starting. You will find information on writing a business plan as well. You may take advantage of SBA’s resource partners. The Service Corps of Retired Executives (SCORE) and the Small Business Development Center (SBDC) provide free one-on-one counseling to those interested in starting and expanding a business. This includes critiquing your business plan, legal requirements, marketing, and licenses needed for your business. To find the location nearest you, go to www.sba.gov/regions/states.html.
Business Information Centers (BICs), supported by local SBA District Offices, can assist you by providing access to state-of-the-art computer hardware and software, and through counseling by Service Corps of Retired Executives (SCORE) volunteers. BICs have resources for addressing a broad variety of business start-up and development issues. You can receive help with writing a comprehensive business plan, evaluating, and improving your marketing and sales techniques, diversifying into a new product/and or service areas, pricing your products, or exploring exporting opportunities. The BIC website is: www.sba.gov/bi/bics.
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#4 How do I get a business license?
Licensing is generally handled through your state orlocal government. See the local town listings earlier in the Almanac. For free one-on-one counseling, please go to SBA‚Äôs home page and select ‚ÄúLocal SBA Resources‚ÄĚ for an area local contact nearest you. The Service Corps of Retired Executives and the Small BusinessDevelopmentCenter can assist you with your business venture.#5 How do I get a tax identification number?
For a Federal Tax ID number, please contact the Internal Revenue Service for Form SS4. This Form is available through their web site at http://www.irs.gov. You may call the IRS (Publications) at 800.829.3676 and ask for the Small Business Tax Kit #454. You will need to contact the Department of Revenue for state taxes (if any). The Massachusetts Department of Revenue phone number is 800.392.6089.

#6 How do I write a business plan?
If you go to SBA’s home page and select starting, you will find information on starting a business and writing a business plan. Under SBA local resources, you can find local contacts such as the Service Corps of Retired Executives and the Small Business Development Center that provide free one-on-one counseling in the area of starting and expanding a small business. They can assist you by critiquing your business plan and your business ideas. Also, SBA has Business Information Centers (BICs) nationwide that are similar to a business library. There you will find reference materials on starting and expanding a business, including information on how to write a strong business plan. Some of the Centers have actual samples of business plans that have been written. You can locate a center by selecting SBA local resources under www.sba.gov, as well.

#7 What type of collateral do I need for a loan?
Repayment ability from the cash flow of the business is a primary consideration in the SBA loan decision
process but good character, management capability, collateral, and owner’s equity contribution are also important considerations. All owners of twenty percent (20%) or more of the business are required to personally guarantee SBA loans.
The SBA does not deny approval for a SBA Guaranty Loan solely due to lack of collateral; however, it can be used as a reason in addition to other credit factors. For more information on requirements on a SBA Guaranty Loan, as well as guaranty loan programs, visit www.sba.gov/financing/indexloans.html.

#8 Is there any business assistance available in my area?
Yes. There are 12,400 Service Corps of Retired Executives (SCORE) chapters and approximately 1,000
Small Business Development Centers (SBDC) nationwide. SCORE provides free expert advice, based on many years of first-hand experience and shared knowledge, on virtually every aspect of business. The SBDC provides a variety of management and technical assistance services to small businesses and potential entrepreneurs. To locate the nearest SCORE or SBDC in your area visit: www.sba.gov/regions/states.html and click on your state.
You may also want to visit one of our Business Information Centers (BICs) that have various books, videotapes, and training workshops on starting and expanding your business. This includes marketing, business planning, legal requirements, bookkeeping, etc. To locate the nearest BIC, visit the website address (above) and click on your state.

#9 What classifies a business as small?
There is no official certification process to be determined as a small business. The U.S. Small Business Administration (SBA) uses Standard Industrial Classification (SIC) codes in determining size standards. To see if your business is considered small by the federal government, or to see which SIC code(s) apply to it, go to: www.sba.gov/regulations/siccodes/ It is considered a self-certifying process; therefore, no paperwork needs to be filled out.
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#10 How can I get my business certified as woman owned or minority-owned?
On a federal level, Congress considers a minority owned business as generally anyone other than white. The business MUST be owned and at least 51% controlled by one or more minorities. Women are not considered minorities. It is a self-certifying process and no paperwork needs to be filled out. However, your state and local government may have different rules and regulations regarding their contracts and what their definitions are. The Massachusetts State Office of Minority and Women Business Assistance phone number is 617.973.8692.

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