Not that I’m saying they get offended, but they feel now, I don’t think the bank’s helping me on this
Usually they want two years of proven viability before they actually lend to you. However, here’s where SBA now stands in. Bank turns to pages and sees, oh, restaurants are included as a way of lending using the SBA guarantee. And we will now guarantee the bank and we’ll take the risk through SBA, which basically, if you think about is the tax payers. The SBA guarantee is a taxpayer program. At the end, the tax payers are taken on the risk that that business is good for the money. And the lender’s now going to go out and lend to that business.
So if we’re a startup and you open the restaurant today, or you plan to open a restaurant tomorrow, chances are the lender’s going to tell you, we can’t lend you strictly because of the risk
Jon: Got yah. And when you think about kind of that 7A program. So if I’m a business owner and I’m interested in taking out a 7A loan, are there certain criteria or preparations that I would make that would be unique from a normal prep that you take for more of a traditional loan? Is there some kind of like information documentation, kind of homework you can do to make sure if you’re going to go have that conversation with a community lender or a more traditional bank that you kind of buttoned up and ready to go?
Julio: This is where the borrower, the applicant or the entrepreneur that press taker that wants to get into business needs to take a step back. They need to reach out to what we call resource partners. Our resource partners will help them package their loan or application to the level that it meets the standards of not only the SBA, what the SBA requires. Because the SBA wants these applicants to take on, to meet with our resource partners, because it’s been proven that if businesses look for assistance, look for advice and it’s provided to them, they tend to last longer than those businesses that take on the risk on their own. The banks on the other hand, also like the fact that one of our partners is now working with the business and together the bank will then be introduced either through the partner and the borrower to the bank.
And the bank then has a little bit more confidence that the package that they’re being submitted has been kind of reviewed and checked by professionals or people that have expertise in the subject matter where if you just walked into a bank and said, “I want a $50,000 loan to open up my beauty salon.” The bank is going to ask, “Where are your papers? How do you know? Have you been in business?” And all of a sudden the borrower gets… They’re just basically telling me I don’t need you. But if you go to our resource partners and the resource partners are SCORE, the Service Corps of Retired Executives, which they’re now just called SCORE. They have six locations around this state with hundreds of professional people. They could actually match you to the industry or the business that you’re doing, where they get a retired executive to work with you and help you with your business plan.
Then we have the Small Business Development Center. There’s a quasi organization that is funded by the SBA, the state of Connecticut and the University of Connecticut. And they’re housed around the state of Connecticut at various chambers town halls. And they will also work with you to help you with your business plan. Then we have the women’s business centers in which if a woman wants to get into business and they feel more comfortable talking to other professional women then you have the women’s business centers. These are all funded through one way or the other by SBA. And here’s the four letter word, it’s free. You don’t have to pay for this.