Small Business Administration Tools

Dan Blake (left) and Jeff Vaughan used SBA financing for their Blake & Vaughn Engineering office at 800 Woodlawn Avenue. Another SBA-backed business moved in upstairs. - Photography by Ron Dubick
Dan Blake (left) and Jeff Vaughan used SBA financing for their Blake & Vaughn Engineering office at 800 Woodlawn Avenue. Another SBA-backed business moved in upstairs. – Photography by Ron Dubick

By Kathy Canavan

Iconic Delaware brands like Grotto, Iron Hill, Dogfish Head, and Brew Ha Ha got Small Business Administration help along the way, but the SBA paperwork used to be a speed bump for banks and borrowers alike.

“A lot of banks didn’t want to touch the SBA,” said Darrell Stayman, commercial credit manager for Applied Bank in Wilmington. “It was so time-consuming that, at the end of the day, you didn’t make a profit.”

It still takes Kelly Sylvester almost eight hours to type information online and upload documents, but she said it’s faster than it once was. A new program coming in September will speed things up.

“I think they heard banks saying this paperwork is killing us, and I think they’ve tried to fix the system,” said Sylvester, business development officer for County Bank in Rehoboth.

The Small Business Administration is on a self-improvement kick, and banks and businesses can benefit. It is rolling out three programs to cut through the red tape and speed loans.

Because the SBA measures borrowers by a yardstick different from that used by banks, it can be worth a business’s time to apply. The state SBA office has backed $70.3 million in loans this fiscal year – and they still have found months to go. Loan production is up 49 percent and dollars financed is up almost 111 percent.

With the SBA’s 28 local lending partners and its trinity of new tools, it’s time small businesspeople took another look at government-backed financing.

Inez Conover, owner of Bewitched and BEDazzled B&B in Rehoboth Beach, pictured with her spouse Rev. Sharon Marquart, said the SBA process was very involved but she had no  problem with that because she was borrowing almost $1 million. She said her loan officer from Applied Bank was very helpful. “The most difficult process was explaining the value of,  not only the property, but the business and the past years’ performance and growth, good will, projection of income, and how you spend your dollars for everything down to toothpicks.” -Photography by Brian Harvath
Inez Conover, owner of Bewitched and BEDazzled B&B in Rehoboth Beach, pictured with her spouse Rev. Sharon Marquart, said the SBA process was very involved but she had no problem with that because she was borrowing almost $1 million. She said her loan officer from Applied Bank was very helpful. “The most difficult process was explaining the value of, not only the property, but the business and the past years’ performance and growth, good will, projection of income, and how you spend your dollars for everything down to toothpicks.” – Photography by Brian Harvath

1. The Linc tool 

It’s a new one-stop-shopping program on SBA.gov that matches some small-business borrowers with SBA-approved lenders. Borrowers complete a 20-question preliminary application. The questions are basic ones such as name, address, amount of financing needed, estimated annual revenue, why you need financing. It will ask if you have collateral and a written business plan, although the SBA may not require them, because having both will increase your chances of a bank match. Say you don’t match with anyone: The SBA will pair you with a free counselor so you can massage your application and apply again.

2. SBA credit scoring 

This automated credit-scoring program for business loans up to $350,000 fuses your personal credit score, ranging from 300 to 850, and your business credit score, ranging from 0 to 100, to make it speedier for lenders to size up your prospects. Often a good business score can help out when your personal credit score is lagging. The SBA has lifted its limit on a borrowers’ personal resources so high-income borrowers can also avail themselves of SBA guarantees.

3. SBA One 

While SBA One mainly helps bankers, it also helps borrowers by speeding the loan process. The SBA expects this new tool to result in more small-potatoes loans because bankers won’t have to spend three to four hours keying in information and another four hours uploading documents.

David Lightcap used an SBA loan to build Lightcap Fitness upstairs from Blake&Vaughn Engineering. - Photography by Ron Dubick
David Lightcap used an SBA loan to build Lightcap Fitness upstairs from Blake&Vaughn Engineering. – Photography by Ron Dubick

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