Access to Capital and Healthcare Reform Hot Topics at ABA's Small Biz Session

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On Saturday, May 30, at BookExpo America, more than 55 booksellers attended the American Booksellers Association session "How SBA and the Federal Stimulus Package Can Help Your Business" in the hopes of finding solutions to a wide range of issues currently facing small businesses in tough economic times, from access to capital to affordable healthcare.

Ana M. Ma

The 90-minute program, which took place at the Javits Convention Center, featured Ana M. Ma, chief of staff at the U.S. Small Business Administration, and Michael Goldman, a counselor and past executive committee member for the New York City chapter of SCORE, a nonprofit association dedicated to educating entrepreneurs and to the formation, growth, and success of small business nationwide.

ABA's new CEO, Oren Teicher, serving as session moderator, noted that President Obama had made clear that the long-term survival of small businesses, such as independent bookstores, is a priority for his administration. "The elaborate stimulus package that the Obama administration passed includes a whole series of reforms to SBA to help small business gain access to capital," Teicher explained. "For the entire time I've been at ABA... the one issue that comes up the most often is access to capital."

SBA Chief of Staff Ma discussed the president's commitment not only to small businesses, but also to reading and literacy. "Independent booksellers are a valued member of the small business community," she said. "And small businesses are the heartbeat of our economy." Ma noted that the Obama administration "values taking bold action," and revitalizing SBA is a key step it has taken to help spur economic growth. "SBA received $730 million in Recovery Act funding," she noted

Ma reported that SBA recently launched a new program to help businesses, the America's Recovery Capital (ARC) loan program, which carries a 100-percent guarantee from SBA to the lender. Small businesses suffering financial hardship as a result of the slow economy may be eligible to receive temporary relief to keep their doors open and get their cash flow back on track through the program.

On June 15, SBA will start guaranteeing ARC loans, she said, and she explained that ARC loans are deferred-payment loans of up to $35,000 available to established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt. ARC loans are interest-free to the borrower, 100 percent guaranteed by the SBA, and have no SBA fees associated with them. Loan proceeds are provided over a six-month period, and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years. "These loans will [help] small businesses keep their doors open," she said.

SBA defines a "viable" business as one that has been profitable in one of the past three years and one that is able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. "You can put [the ARC loan] toward your mortgage, credit card, or vendor debt," Ma said.

Overall, SBA can help booksellers in a number of ways. SBA has a "powerful, broad reach," she reported. "We have 14,000 SBA-affiliated counselors" who can help booksellers, and these counselors have experience working with women, minorities, and rural communities that are "traditionally underserved." The goal is to give small businesses "a stronger voice on the national level," said Ma.

Following Ma, Goldman urged booksellers to make use of SCORE's free mentoring. "We have nearly 400 chapters across the United States and more than 11,000 counselors. We are a resource of SBA, and we all come from the business world. We are men and women who have had senior positions.... We're all volunteers, and there is no charge for our counseling. You can maintain a mentor relationship for as long as you like."

Goldman, who comes from a highly successful accounting background, continued, "Each of us has his or her own expertise" and he noted that counselors frequently worked together to assist businesses, often helping develop business plans for either start-ups or small businesses seeking additional capital. "Please take advantage of this national organization."

A question-and-answer period followed the presentations, and questions regarding the application process for an ARC loan came up.

As with other SBA loan programs, booksellers interested in an ARC loan should contact their bank and find out if it is an SBA lender, Ma noted.

If the bank is an SBA lender, SCORE's Goldman stressed the banker should be able to help booksellers find the right SBA loan if the ARC loan isn't a good option. "A counselor from SCORE will even accompany you to your banker if necessary," he said. "The [ARC] loan program by SBA... is just one of many loan programs that SBA supports. It's not the only program available." Teicher added that if a bookseller's banker is not offering SBA loans, he or she should encourage the bank to do so.

There was also discussion regarding the consequences should a small business owner be unable to pay back an ARC loan, and what the 100-percent guarantee means. "The benefit of SBA making that guarantee is that the bank is more likely to give you the loan," Goldman explained. "That being said, if you are unable to pay off the loan, the bank will come after you. You are still liable. The bank can look to SBA in a worst-case scenario." He added: "I would urge you not to focus [only on the ARC loan program] -- focus on the money you need for you business and go to the bank and do whatever is necessary."

Ma concurred. "The bank will find the best fit based on your needs.... You can also talk to SCORE and our local offices." As with any loan, the bank will want to see a business' tax return, balance sheet, and debt.

Teicher further stressed, "ARC loans and other SBA loans are not mutually exclusive."

The issue of healthcare rounded out the session discussion, as booksellers questioned Ma about what steps the Obama administration planned to take to help provide affordable healthcare options to small businesses.

Healthcare reform is a key priority of the Obama administration, said Ma, and was "on the congressional agenda." She added: "SBA is at the table in this discussion," and would be sure the concerns of small business would be heard. "We realize you can't afford $3,000 a month" in health insurance costs.

For an overview on the small business programs included in the federal stimulus package, visit the following links:

And more information on the ARC loan program is available at

To locate a regional SBA office near you, go to

For more about SCORE, and to locate a SCORE counselor, to to --David Grogan