woman excited and smiling about small business loan

Recently, I had the pleasure of working with a client who needed help re-branding her growing business. She makes up one-third of the ownership of Omaha-based party planning company-turned full-service event planning company, Mise en Scène (formerly A&K Party Pals, LLC).  Mise en Scène  made their mark on the Omaha market, putting together a constant string of fun-filled kids parties, many of which had visits by well-known characters like Ninja Turtles, Dora, and Princess Elsa. You know, the regular stuff.

A&K’s popularity in the kids’ party space spurred requests for the owners – Ashley Lewis-Redick, Kishia Lewis, and Toni Lewis-Miners – to plan weddings, corporate events, and even a celebrity shindig or two. In less than three years, A&K was evolving into something bigger, deffer, and greater than it had been. But in order to support the company’s growth, the women needed to expand the business and that meant getting access to capital.

Initially, the Lewis women applied for a loan with a local lender, but were quickly turned down. The lender told them all the reasons why A&K – despite its growth – was just too much of a risk.  But the lender pointed them to the Nebraska Enterprise Fund, which had recently become an SBA micro lender. A few weeks later, A&K had the loan and the resource to expand A&K Party Pals into Mise en Scène.  

It’s true that landing a small business loan in the current economy seems to require a mixture of master skill and luck, not to mention an A+ credit rating and years of successfully running a profitable business. Women have to be particularly resourceful in searching for the right opportunities to start and grow a business. As the Lewis women discovered, the SBA backs a catalog of loan products that can present women businesses owners with a diverse mix of opportunities to access capital.

An SBA survey, Credit Scores and Credit Market Outcomes: Evidence from the Survey of Small Business Finances and the Kauffman Firm Survey, noted women-owned businesses typically start with much less capital than male-owned businesses. That’s due, in large part, to the fact that women tend to forgo the small business loan process. Only 5.5% of women-owned businesses leveraged business loans in the startup phase. The inability to access adequate capital often results in a business being smaller, less profitable and more likely to succumb to an economic downturn.

How SBA small business loans meet capital needs

In 2011, the government doled out more than $50 million in loans per day to U.S. small businesses. 7(a) loans are the most frequently used SBA small business loans, likely because the catalog of varied types of loans. The SBA’s varied selection of loan products target the specific needs of small businesses.

If you want to launch a new business… The SBA provides funds to non-profit community organizations that lend to small businesses through the microloan program. For-profit small businesses can borrow up to $50,000 to start or expand. Business owners can use the small business loan to buy inventory and supplies, purchase furniture or fixtures, and machinery or equipment. Borrowers cannot use microloans to buy real estate.

If you need short-term, shifting capitalThe Working Capital Line of Credit provides small businesses with a revolving credit line based on the size of your accounts receivables, up to $5 million in some cases.

If you want to purchase new inventory or add staff in anticipation of the busy season… The SBA backs the Seasonal Line of Credit for businesses that operate year-round but that have a natural busy season. Business owners can use the credit line to buy additional inventory, add staff members, and take care of expenses that are above normal usage.

If you want funds to build or rehabilitate properties… The Builders Line provides a line of credit for small contractors to build or rehabilitate residential and commercial properties to put on the market. Borrowers must sell properties to people they do not know.

If you need to get back on track after a natural disaster The SBA backs low-interest disaster loans to help small businesses get back on track after droughts, hurricanes, or floods. This loan provides money to repair or replace lost inventory, furniture, fixtures, equipment and even real estate.

For a full catalog of loan products available through the Small Business Administration, visit the small business loans section of the SBA website.