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Q. What is
the Northwest Texas Small Business Development Center (NWTSBDC)?
A.
The Northwest Texas Small Business Development Center
is the premier small business resource for the South Plains, with sub
centers in Amarillo, Lubbock, Stephenville, Abilene, Odessa, and Wichita
Falls. The friendly staff at your local SBDC are highly trained and willing
to go the extra mile to provide the best in service and assistance to the
local community.
Q. What is a small business?
A. A small business size
standard is a threshold measured either in number of employees or by average
annual receipts, depending upon the industry. Each SIC code has a small
business size standard assigned to it. Businesses that meet or fall below
the assigned size standard for a particular industry are considered to be a
small business for that particular industry. Generally, a business is
considered to be small if it has no more than 500 employees.
Q. What
is a SBA loan and how do I get one?
A. A SBA loan is a loan that has been guaranteed by the U.S.
Small Business Administration (SBA). The guarantee assures the lender that
it will be repaid a portion of the money it loans even if the borrower fails
to repay it. The SBA will guarantee up to 85% on loans of $150,000 or less
and up to 75% on loans over $150,000. With few exceptions, the maximum SBA
guaranty is $1 million.
SBA is a federal agency created in 1953 to help America's
entrepreneurs form successful small businesses. One way SBA helps existing
and potential small business owners is when owners obtain financing from a
bank. The SBA does not administer grants or provide direct funding to
individuals or businesses. The SBA does not provide low interest loans.
As a business owner, you will make a request to a lender
(usually your local bank) for funds needed for your business plans. The
lender will evaluate your request and decide whether it can make the loan to
you on its own. If the lender feels the request has merit but cannot make
the loan without additional support, then the lender can request a SBA
guarantee. Not all banks participate in the SBA loan guarantee program, so
don't hesitate to ask whether the bank makes SBA loans. So, the SBA loan is
requested by your lender. Although you are the borrower, SBA considers its
applicant to be the lender to whom it provides the guarantee. The SBA
guarantee enables the lender to make a loan that it would not otherwise
provide.
In addition to getting a loan that you would not
otherwise receive, SBA- guaranteed loans usually can be borrowed for a
longer time and cannot be set up with a balloon payment due at maturity.
This assures you of having long-term debt for your business needs that you
repay in equal installments.
Q. Where
do I get a SBA loan application? My bank doesn't have any.
A. The SBDC does not provide blank SBA loan application
forms. Individuals seeking SBA loan applications should contact
participating lenders.
A borrower can download applications from the SBA web
site. However, SBA prefers original applications. Therefore, applications
from the SBA web site should be used as reference only and not as the
official application.
Q. What
assistance does the SBDC provide to me if
I am seeking a loan?
A. The SBDC is knowledgeable about the type of information
that lenders and SBA want to see when you make a loan request of them. The
SBDC can guide you through the process of assembling a good business plan
and/or loan proposal that presents your plans clearly. If you already have a
proposal, we can offer feedback on its contents and any modifications that
may be advisable.
When you present your loan request, the lender may
suggest that you work with the SBDC in preparing a formal SBA loan
application. Since we are very familiar with SBA's loan requirements, we can
assist you in presenting your loan application so that it contains all of
the required exhibits and tells your business story completely. Lenders and
SBA have told us that borrowers who work with our office usually do a better
job of presenting their loan request, thereby making it easier for the
lender and SBA to do their jobs and make a decision regarding your loan
request.
The SBDC does not have
authority to approve your loan request. We
cannot influence the lender or the SBA in their decision about your loan.
The SBDC does not have any money to loan
to individuals or businesses.
Q. How
long will it take to get a loan?
A. The time it takes to get a loan varies with each situation
and is determined by the amount and complexity of the loan request. A good
rule of thumb is to allow 60 to 90 days to have money. But realize that this
is only a rule of thumb, and your experience may differ.
Q. Will
the SBA deny a loan application based on personal history?
A. The SBA will not decline
a loan solely due to bad credit, no credit, unemployment, or serving prison
time. However, these circumstances will make the process more challenging.
In some cases, eligibility to apply for a loan can be limited or restricted
due to personal history issues. Explanation of prior bankruptcy experience
and investigation of past arrest records or criminal conviction may delay a
decision regarding a loan request. Therefore, a prospective business owner
should put forth the time and effort to produce a well thought-out business
plan that discusses owner experience and personal character issues that may
affect a loan decision.
Q. What
is SCORE and how do I contact them for assistance?
A. The Service Corps of
Retired Executives, commonly called SCORE, is a volunteer program
administered by the SBA that also provides small business assistance.
Retired and actively employed individuals from a variety of business
backgrounds volunteer to help small business owners manage their businesses
more profitably and compete more effectively. S.C.O.R.E. volunteers also
provide start-up assistance to individuals considering opening a business.
For more information about S.C.O.R.E. services or to sign
on for online consulting, log on to their web site at
www.score.org.
Q. Is
assistance available to help minority entrepreneurs to start a small
business? Women? Veterans? Disabled?
A. The services provided by
the SBDC are available to all groups including minorities, women, veterans
and disabled on a non-discriminatory basis.
The SBA has created the small business loan
pre-qualification program that is designed especially for those groups who
are historically underrepresented in the business community. Other groups
may include borrowers in specially designated geographic areas, exporters,
rural businesses and other selected industries. The pre-qualification
program works in reverse order to the standard loan application process. The
pre-qualification application is prepared and submitted directly to SBA. If
the loan application is approved, the SBA issues a pre-qualification letter
stating the agency's intent to authorize a loan guaranty. You can take the
letter to prospective lenders to seek their participation in the
SBA-guaranteed loan. Until you have a lender willing to participate with
SBA, you do not have a loan.
The SBA also offers the 8(a) Business Development Program
to help small disadvantaged businesses compete in the American economy and
access the federal procurement market.
For more information on the programs offered by the SBA
log onto their web site at
www.sba.gov.
WOMEN
VETERANS
The Veterans' Business Outreach Program (VBOP) is offered
by the SBA and designed to provide entrepreneurial development services such
as business training, counseling, and mentoring to eligible veterans owning
or considering starting a small business.
The Veterans' Business Outreach Center provides business
training, counseling, technical assistance and mentoring to veteran business
owners and start-up candidates. The VBOC is located in Edinburg, TX and
provides assistance for veterans within SBA's Region VI serving Arkansas,
Louisiana, New Mexico, Oklahoma and Texas.
For more information, contact the VBOC at 956-316-2610 or
log on to their web site found at
http://www.sbaonline.sba.gov/VETS/vbop.html
DISABLED
The DISABLED BUSINESSPERSONS ASSOCIATION (DBA) is a
national 501(C)(3) nonprofit, public charity and educational organization
founded in 1991 to help disabled entrepreneurs and professionals maximize
their potential in the business world and to encourage the participation and
enhance the performance of the disabled in the workforce.
For more information, log on to their web site found at
http://www.disabledbusiness.com.
Q. How can I receive
grant money for my small business?
A. To our knowledge, there
is no grant money available for starting a small business. In some cases,
there may be grant programs available to existing small businesses or
entrepreneurs for a particular industry serving a specific purpose.
Nonprofit organizations, 501(c)(3), are the most likely candidates to
receive grant monies. Locating grant-funding sources is a time-consuming
process that entails utilizing resources such as grant indexes available at
public libraries and on the Internet.
Refer to: BizFacts
document #510, Grant/Non-profit Information Sheet
Q. How do I become a
non-profit organization?
A. The SBDC serves the
for-profit business community. Those wanting to form a nonprofit
organization should contact local or national groups that specialize in the
nonprofit arena. To become a non-profit organization you must become
501(c)(3) certified through the IRS and incorporate as a non-profit
organization at the Secretary of State's office.
Refer to:
BizFacts
document #510, Grant/Non-profit Information Sheet
Q. What do I need to do to start
my business?
A. One of the most
important things to do before starting your business is to plan and research
your idea to ensure that your business has a favorable chance for success,
will meet your expectations, and will provide an adequate reward for the
risk involved. It is wise to validate your beliefs about your plans through
research and careful planning because you will not have time to do it once
you start your business. We offer some excellent tools that you can use
during your planning. Our Business Industry and Data Center (BIDC) in our
Region office,
provides a variety of services to counselors in the NWTSBDC network. The
NWTBIDC focuses on demographic and business statistics and market research
in order to compliment the services provided by the counselors in the
NWTSBDC network , in addition our "Starting your own
Business" workshops can help the person who has not owned or managed a
business before. Check our
Workshop Schedule for upcoming classes.
Here are some questions one should ask when faced with this general
question:
-
Will you need financing?
-
Have you written a
business plan?
-
Have you received zoning
approval?
-
Have you obtained a
business license?
Q. Do I
need to write a business plan? What do I need to include in my business
plan?
A. The SBDC always
recommends that individuals wanting to start a business complete a business
plan. The business plan is used as an operating guide and as an aid to
securing financing. Existing businesses wanting to grow or expand their
product and service offerings, relocate their facility or add facilities, or
better meet other challenges are also encouraged to prepare a business plan.
The business plan helps you evaluate your business on paper to determine if
the idea is worth the investment of more time and resources. Our research
library contains sample business plans, business plan outlines that
are helpful in writing your business plan. Our center has
business consultants you can meet with on an appointment basis who will
review your business plan once it is completed and suggest possible changes
that need to be made before you present it to a bank.
Q. Who
can write my business plan?
A. The SBDC strongly
advises prospective and existing business owners to prepare their own
business plans. Neither the SBDC nor SCORE will write a client's business
plan. However, either will provide feedback on a completed business plan
before it is presented to a lender.
Q. What
do I need to do to obtain a business license?
A. A business license or
privilege license is required to operate a business in Texas. The first step
is to visit your city or county zoning commission to make sure the location
of the business is zoned properly. If zoning is not a problem, the business
application license will be approved, and the next step is to go to the city
or county clerk's office to pay a fee and obtain the license.
Refer to:
Q. I want
to start a business from my home, what should I do?
A. As with any other
business, a home-based business must have proper zoning approval and a
business license. For home-based businesses, zoning is particularly
important. Please check with the city or county clerk to find out the zoning
laws for a particular area.
Q. How do
I know if my business name is being used? How do I register my name?
A. A Doing Business As (DBA)
Certificate is required for any sole proprietorship or general partnership
operating under a fictitious name or names other than the owners. There is a
nominal fee that varies from county to county. The DBA Certificate records
the full name and address of the business owner and the fictitious name and
is kept on file at the county clerk's office. To do a business name search
for a sole proprietorship or partnership, contact the county clerk's office
in the county where the business is located. The records are open to the
public, so you can check to make sure the name is not currently being used.
Q. What
is the difference between a sole proprietorship, partnership, corporation,
and limited liability company. Should I incorporate my business?
A. A sole
proprietorship is a business with one owner. The owner is the
business and the business is the owner. All income and expenses pass through
to, and are filed as part of, the owner's personal return. If there is a
business loss, the owner will enjoy a deduction to offset personal
(paycheck) income. If the business makes a profit, the owner is responsible
for any taxes due.
A partnership is similar to a sole
proprietorship but has two or more owners. The partnership is not a separate
legal entity from its owners but can hold property and incur debt in its
name. A partner can be held liable for the acts of the other partners,
increasing personal liability. The partnership must also file an
informational tax return with the IRS.
A corporation is a separate legal entity.
Incorporating allows a group of entrepreneurs to act as one, much the way a
partnership does. It can protect its owners by absorbing the liability if
something goes wrong. For example, lawsuits can be brought against the
company instead of you personally; debt is incurred in the company name and
you are not personally liable (unless you provide a personal guarantee). The
owner of a corporation is known as a shareholder.
The limited liability company features
pass-through taxation of the partnership, and limited liability of the
corporation. Laws are still developing on this form of business
organization.
Q. Do I
need a Federal Employer Identification Number (FEIN)? If so, how do I obtain
it?
A. The FEIN is essentially
the social security number for your business. A FEIN is a nine-digit number
assigned to sole proprietors, partnerships, corporations, estates, trusts,
and other entities for filing and reporting purposes. Every business with
employees has to have a FEIN as do businesses that need to collect and remit
sales tax. However, even a sole proprietor might need to have a FEIN to open
a business account at a bank. Otherwise, sole proprietors can use their
social security number for tax reporting purposes. You can apply for a FEIN
by telephone, fax, or by mail.
Q. How do
I sell my product or services to the government?
A. The Procurement
Assistance Center (PAC) provides training and technical
assistance to area businesses interested in contracting with federal, state,
and local governments.
For more information, contact PAC at (806) 745-3973
For more information, log on to their web site found at
http://www.nwtsbdc.org/PAC.htm |
