FINANCE & BANKING
Top Financial Institutions
Ally Financial Inc. American Express Company Ameriprise Financial, Inc. Bank of America Corporation Bank of New York Mellon Corporation, The Barclays Group US Inc. BB&T Corporation BBVA USA Bancshares, Inc. BNY Mellon
Capital One Financial Corporation Citibank, N.A. Citigroup Inc.
Citizens Financial Group, Inc. Credit Suisse (USA), Inc. Edward Jones Fifth Third Bancorp Freddie Mac
Goldman Sachs Group, Inc., The Harris Financial Corporation HSBC North America Holdings Inc. ING Americas JPMorgan Chase & Co. KeyCorp M&T Bank MasterCard Incorporated MetLife, Inc. Morgan Stanley Northern Trust Corporation PNC Financial Services Group, Inc., The
Regions Financial Corporation State Street Corporation SunTrust Banks, Inc. Taunus Corporation
TD Bank US Holding Company TIAA-CREF U.S. Bancorp Union Bank Vanguard Group, Inc., The Visa USA Wells Fargo & Company
What SBA Offers to Help Small Businesses Grow
varied, and the qualifications for each are specific. SBA can help facilitate a loan for you with a third party lender, guarantee a bond, or help you find venture capital. Un- derstanding how SBA works is the first step towards receiving assistance.
W
SBA’s Role SBA provides a number of financial as- sistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financ- ing, surety bonds, and equity financing.
Guaranteed Loan Programs (Debt Financing) SBA does not make direct loans to small businesses. Rather, SBA sets the guidelines for loans, which are then made by its part- ners (lenders, community development or- ganizations,
and microlending institu-
tions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actu- ally applying for a commercial loan, struc- tured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms. SBA loan guaranty requirements and
practices can change as the Government alters its fiscal policy and priorities to meet current economic
conditions. Therefore,
you can’t rely on past policy when seeking assistance in today’s market.
Bonding Program (Surety Bonds) SBA’s Surety Bond Guarantee (SBG) Program helps small business contractors who cannot obtain surety bonds through regular commercial channels. A surety bond is a three-party instru- ment between a surety (someone who
54 HISPANIC NETWORK MAGAZINE Celebrating 19 Years of Diversity
hat does SBA offer to small business owners? The programs are many and
agrees to be responsible for the debt or ob- ligation of another), a contractor and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the con- tract, the surety assumes the contractor’s responsibilities and ensures that the project is completed.
Through the SBG Program, the SBA makes an agreement with a surety guaran- teeing that SBA will assume a percentage of loss in the event the contractor should breach the terms of the contract. The SBA’s guarantee gives sureties an incentive to provide bonding for eligible contractors, thereby strengthening a contractor’s ability to obtain bonding and greater access to contracting opportunities for small busi- nesses. SBA can guarantee bonds for contracts
up to $5 million, covering bid, perfor- mance and payment bonds, and in some cases up to $10 million for certain con- tracts.
Venture Capital Program (Equity Financing) SBA’s Small Business Investment Com- pany (SBIC) Program is a public-private investment partnership through which the SBA provides venture capital to small businesses. SBICs are privately owned and managed investment funds, licensed and regulated by SBA. With the private capital they raise and with funds borrowed at fa- vorable rates through SBA, SBICs provide financing in the form of debt or equity to small businesses. SBICs are similar to venture capital,
private equity and private debt funds in terms of how they operate and their ulti- mate objective to generate high returns for their investors. However, unlike those funds, SBICs limit their investments to qualified small business concerns as de- fined by SBA regulations. Source:
SBA.gov
www.hnmagazine.com
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