U.S. Small Business Administration

Michigan District Office
477 Michigan Avenue, Room 515
Detroit, Michigan  48226

Phone: (313) 226-6075
Fax:  (313) 226-4769

E-mail:  Michigan@sba.gov

The U.S. Small Business Administration helps people get into business and stay successful.  The agency accomplishes this mission by providing new and existing small businesses with loan guarantees, management counseling and training, and assistance in obtaining government contracts.  The SBA also acts as an advocate for small business interests.

WHAT IS A SMALL BUSINESS?

• Independently owned and operated
• For-profit business
• Meets SBA size standards (maximum) which are based on either number of employees or average annual sales.  In general they are as follows:

SBA provides small business assistance in four major areas: advocacy, procurement, business development, and financial assistance.

ADVOCACY

The SBA espouses the cause of and explains the role of small business in our society and economy, and advocates programs and policies that help small firms.  SBA’s Office of Advocacy maintains a hotline to assist callers with their small business questions at (800) 8-ASK-SBA.

GOVERNMENT CONTRACTING

SBA helps small businesses obtain a representative share of federal contracts through a variety of programs including assistance locating government contracts; subcontracting to small businesses; entry into PRO-Net, a computerized database which is accessed by all federal agencies and prime contractors; issuing certificates of competency to help qualify small businesses for government contracts, and more.  SBA programs include:

8(a)-Minority Enterprise Development Program:  a business development program for small businesses at least 51% owned, managed, and controlled by individual(s) who are socially and economically disadvantaged, and which have the capacity and capability to sell products and services directly to the federal government.  Through the 8(a) program, SBA acts as a prime contractor and negotiates subcontracts with 8(a) companies at prices which enable the firms to perform the contract and earn a profit.

PRO-Net:  an electronic gateway of procurement information, for and about small businesses.  It is a search engine for contracting officers, a marketing tool for small firms and a “link” to procurement opportunities and important information.  It is designed to be a “virtual” one-stop procurement shop.

Small Disadvantaged Business Certification Program:  to qualify as an SDB, a firm must be owned and controlled by one or more individuals who are socially and economically disadvantaged.  Under the new rule, before a small business concern can become eligible to receive benefit as an SDB, it must be certified as an SDB by SBA.

HUBZones:  the historically underutilized business zones (HUBZones) were created to encourage economic development through establishment of preferences for award of federal contracts to small businesses located in these areas.  There are over 400 HUBZones in Michigan with over 200 in the City of Detroit.  To see whether your business is located within a HUBZone, visit SBA’s Web page.

Very Small Business Set-Aside Pilot Program:  this pilot program improves access to federal government contract opportunities for businesses with 15 or fewer employees and average annual receipts that do not exceed $1 million by reserving certain procurements for competition among such businesses.  Procurement requirements estimated to be between $2,500 and $50,000 must be reserved for eligible VSB businesses.

ENTREPRENEURIAL DEVELOPMENT

Through its resource partners, the SBA offers free, one-on-one counseling, and no/low cost training, conferences, and seminars.  Major resource partners in Michigan include the following.

Michigan Small Business Development Centers (SBDC):  Help to foster small business concerns by providing “one-stop” guidance, assistance, and counseling to small business owners.  There are 12 regional centers and over 70 satellite and affiliate centers in Michigan.  To find the location closest to you, please call (616) 336-7480 or refer to Appendix C.

Service Corps of Retired Executives (SCORE):  This association is comprised of volunteer, retired business executives who share their management and technical expertise with small business owners.  There are nine SCORE chapters in Michigan with over 40 locations.  Please call (313) 226-7947 to locate the SCORE office closest to you or refer to Appendix D.

U.S. Export Assistance Centers:  A cooperative effort between the SBA, U.S. Department of Commerce and Export-Import Bank to provide, free trade counseling and advise on all facets of the export process.  There are four USEACs in Michigan: Detroit (313) 226-3650, Pontiac (248) 975-9600, and Grand Rapids (616) 458-3564.

Women Business Centers: provide a wide range of services to women entrepreneurs at all levels of business development, including the principles of finance, management and marketing, as well as specialized topics such as government contracting and certification.  There are four WBCs in Michigan and one Affiliate center: Detroit (313) 961-8426, Grand Rapids (616) 458-3404, Ann Arbor (734) 677-1400, Traverse City (231) 929-5000, and Flint (810) 239-9250.

Business Information Centers:  A wealth of resources including computer hardware and software, books, videos, and CD-ROMs are available for small business owners.  The centers also provide one-on-one counseling from SCORE and the MI-SBDC.  There are three BICs in Michigan: Detroit (313) 965-1100, Flint (810) 767-7272 and Grand Rapids (616) 771-6880.

FINANCIAL ASSISTANCE

The SBA provides financial assistance by guarantying loans made by lending institutions.  In most cases, the maximum amount the SBA may guaranty is $1,000,000.  Loans of $150,000 or less carry a maximum 85% guaranty rate.  Loans exceeding $150,000 have a maximum guaranty of 75%.  The maximum interest rate permitted is 2.75% over prime with higher rates permitted on loans $50,000 and under.

The SBA offers a variety of loan programs to meet nearly every financing need.  Programs include:

LowDoc loans:  For loans up to $150,000.  While the dynamics are the same for the borrower, the lender submits less paperwork to the SBA thereby reducing turn-around time for approval.

CAPlines:  This program offers a variety of lines of credit to help small businesses meet financing needs.  This program includes contract loans to help finance labor and materials for a project; seasonal lines of credit; asset-based loans for revolving lines of credit; and contractor loans to finance renovations of buildings for resale.

Export Working Capital Program:  Helps to finance labor, materials, and export expenses during any stage of the export process.

International Trade Loans: To finance facilities, equipment, or working capital for international sales.

Prequalification Loans:  Intermediary organizations work with minority, women, and disabled business owners to present a loan application for $250,000 or less for SBA review prior to submitting the proposal to a bank.  If SBA’s review is favorable, it will issue a letter of pre-commitment which states if a bank will do the deal, SBA will guaranty it.

Microloans:  this program provides small loans ranging from under $500 to $35,000.  Under this program, the SBA makes funds available to nonprofit intermediaries that, in turn, make the loans directly to entrepreneurs.  Proceeds can be used for typical business purposes such as working capital, machinery and equipment, inventory and leasehold improvements.  Interest rates are negotiated between the borrower and intermediary.  The average loan size is $10,000.

Certified Development Company-504 Program:  this program provides long-term, fixed-rate, subordinate mortgage financing for acquisition and/or renovation of capital assets including land, buildings, and equipment.   Projects are financed through a cooperative effort by the lender, the SBA, and a development company  which is SBA-certified.

Small Business Investment Company Program (SBIC):  licensed and regulated by SBA, SBICs are privately owned investment firms that make capital available to small businesses through investments or loans.  SBICs use their own funds plus funds obtained at favorable rates with SBA guarantees and/or selling their preferred stock to SBA.  SBICs are for-profit firms whose incentive is to share in the success of a small business.

eSMALL BUSINESS:

Tools to help businesses understand and participate in the Internet economy (www.sba.gov).

HOW TO GET ON-LINE

SBA’s on-line classroom (www.sba.gov/classroom).

Internet Essentials is a series of online courses – available 24/7 that provide everything you need to know to succeed in the new Internet economy.  You’ll learn how to market effectively on the Web, implement e-commerce and how to participate in the Internet economy!  The course content is divided into brief modules viewable in any order you choose.  You’ll get answers to questions most business owners like you want to ask about e-business.  Modules include:

1. The Internet Economy – learn how the Internet can help make your business more competitive.
2. Basics of the Internet – learn why it’s important for your business and which technologies and services you’ll need to start putting the power of the Internet to work for you.
3. Basics of E-commerce – overview of how to buy and sell on-line, the different kinds of e-commerce, and setting up a virtual storefront.
4. Growing Your Business on the Web – information about the technologies, software and products you will need for your Internet strategy.

HOW TO FIND A TECHNOLOGY COMPANY

Business cards (app1.sba.gov/buscard)

Search on-line through business cards posted by business owners to find a resource you need.  For example a recent search with keyword “internet” in Michigan yielded 42 companies.  Please note, these businesses are not endorsed by the SBA.  This feature is provided merely as a public service.

HOW TO MARKET YOUR BUSINESS ON-LINE

On-line Women Business Center (www.onlinewbc.gov)

This site is full of tested advice compiled from the experienced business counselors of the Women Business Centers nationwide.  There is a special marketing section devoted to the Internet.  There are numerous articles with advice on choosing a Web production company, selling online, promoting your Web page, and more.

PRO-Net

pronet.sba.gov

Pro-Net is an electronic gateway of procurement information for and about small businesses.  It is a search engine for contracting officers, a marketing tool for small firms and a “link” to procurement opportunities and important information.

E-COMMERCE REGULATORY ISSUES

SBA’s Office of Advocacy (www.sba.gov/advo)

It is important for small business to understand the laws, policies, and regulations that affect e-commerce.  SBA’s Office of Advocacy has created a Web page to provide small business owners and operators with up-to-date information on federal regulatory and legislative actions that affect e-commerce.  Information includes:

1. E-commerce issues – Information on specific issues, how these actions can affect you and how to get involved.  Top issues currently include: Alternative Dispute Resolution, Taxation, Top Level Domain Names Abuse (cybersquatting), and Trademarks.
2. E-commerce trends and statistics – latest research on e-commerce available to SBA.
3. E-commerce links – Web sites with important information for small businesses.