Financing with Small Business Loans and Grants

[ music ]>> The US Small Business Administrationand the United States Postal Service present delivering success. Financing a small business can be one of the most challenging aspects of ownership. Learn from two entrepreneurs how the SBA can help you secure financing. Meet Greg Breukelman, owner of the BKG an integrated marketing firm. He was recognized in 2006 as SBA’s South Dakota’s small business person of the year. He received a SBA backed loan to finance and grow the business. >> Our business is called Breukelman Kubista Group, and we are a marketingand advertising agency in Sioux Falls South Dakota. We have 15 employees and we work with a wide variety of clients from software developersto manufacturers to doctors and helping them grow and market their businessthrough creative messaging and we use multiple media to do that for our clientsand its really always based off a sound strategy. When we purchased the business we had used the SBA to acquire our financingfor the business purchase and also when we purchasedand built our building we used the SBA to finance that project as well. So we would not be here without the SBA,we would not be in business without the SBA quite frankly. First of all when we were developing our business plan,before we purchased the business, SBA helped usout in developing our financial projections for the business. The SBA has never given us, granted us, loaned us any money themselves. But what the SBA has done is, they have taken some of the risk away from the banks. We have an advertising agency, we don’t have a lot of hard assets. When we acquired a business it was basically buying blue sky. Banks don’t like to use blue sky as security or collateral when they loaned moneyand so the SBA helps the bank lower their risk by guaranteeing part of the loan. So that’s where the SBA really came into play for us, was again reducing the riskfor the banks so the bank would in turn lend us the moneythat we needed to acquire the business. >> Hear how Aaron Wolfson of Savvy Gourmet in New Orleans found moneyto grow his business with the SBA help. >> We sort of dealt what the SBA through our banker,so the SBA does not actually lend money to individuals. What they do is they give the lender a sense of comfortby guaranteeing a certain percentage of the loan that’s given out. So as long as the applicant satisfies a certain set of criteria the SBA signs offon a guarantee and the bank is more likely to be comfortablewith a new business, a startup business. And although we had been operatingfor several years before we opened our facility we were in essence a start up. So, you know, a very high percentage of start up businesses failin the first several years of operations. So in order to accept that level of risk the bank has a guaranteefrom the government basically. That if the applicant defaults, the government well guaranteed the loan. [ music ]>> For more information from SBA on financing a business, click on the provided linksand for business tips logon to the United States Postal Service at USPS. com/smallbiz[ music ]

Financing with Small Business Loans and Grants