Mainebiz

V O L . X X V N O. X V I 46 Fact Book / Doing Business in Maine B U S I N E S S R E S O U R C E S Size Eligibility For a more in-depth listing of standards, visit www.sba.gov/size Eligibility is based size and nature of the business, use of proceeds and case- specific factors. Loan recipient businesses must be classified as small by the SBA. Manufacturing: 500 to 1,500 employees Wholesale Trades: Up to 100 employees Services: $2 million to $35.5 mil- lion in average annual receipts Retail Trades: $7 million to $35.5 million in average annual receipts Construction: $7 million to $33.5 million in average annual receipts Agriculture, Forestry, Fishing and Hunting: $750,000 to $17.5 million in average annual receipts Businesses that do not qualify under their industry size standards for SBA funding can't have a tangible net worth exceeding $15 million and aver- age net income exceeding $5 million for the previous two years, including affiliates. is makes more businesses eligible and applies to SBA non- disaster loan programs. Nature of Business e SBA has prohibitions against providing financial assistance to busi- nesses involved in lending, speculat- ing, passive investment, pyramid sales, loan packaging, presenting live perfor- mances of a prurient nature, gambling and illegal activity. e SBA also cannot make loan guaranties to non-profit businesses, private clubs that limit member- ship on a basis other than capacity, businesses that promote a religion, businesses owned by individuals incarcerated or on probation or parole, municipalities, and businesses or their owners that failed to repay a federal loan or federally assisted financing, or are delinquent on federal debt. Use of Proceeds 7(a) loan proceeds can be used to buy machinery, equipment, fixtures, supplies, and to make improvements to land and/or buildings that will be occupied by the business. Proceeds can also be used to: expand or renovate; acquire machinery, equipment, furniture, fixtures and leasehold improvements; acquire businesses; start businesses; acquire land and build a location for the applicant business; refinance existing debt under cer- tain conditions; as permanent working capital. SBA 7(a) loan proceeds cannot be used: to make investments; to provide money to owners, except for ordinary compensation for ser- vices provided; for floor plan financing; for a purpose that does not benefit the business. Miscellaneous Factors ere are also a variety of require- ments, including checking the per- sonal resources of the owners to see if they can make a contribution before getting a loan guaranty, as well as the SBA's anti-discrimination rules. SBA also has limitations on lending to agricultural enterprises because there are other federal agencies with pro- grams to fund such businesses. Generally: Every loan must be for a sound business purpose. ere must be sufficient invested equity in the business so it can operate on a sound financial basis. ere must be a potential for long- term success. e owners must be of good char- acter and reputation. All loans must be sound enough to reasonably assure repayment. Company loan programs (504 Loans) e 504 Loan program provides long- term, fixed-rate, subordinate mort- gage financing for acquisition and/or renovation of capital assets, including land, buildings and equipment. Some refinancing is also permitted. Most for-profit small businesses are eligible. e types of businesses excluded from 7(a) loans are also excluded from the 504 program. e SBA's 504 Certified Develop- ment Companies finance business expansion needs. CDCs work with banks and other lenders to make loans on reasonable terms, helping lenders retain growing customers and provide Community Reinvestment Act credit. The maximum debenture, or long-term loan, is: $5 million for businesses that cre- ate a certain number of jobs or improve the local economy; $5 million for businesses that meet a specific public policy goal, including loans for aiding rural development and expansion of small businesses owned by veter- ans, women, and minorities; $5.5 million for manufacturers and energy-related public policy projects. e program also allows $5.5 million for each project that reduces the borrow- er's energy consumption by at least 10%, and $5.5 million for each project that generates renewable energy fuel. Projects eligible for up to $5.5 million under one of these two requirements do not have to meet the job creation or retention requirement, so long as the CDC port- folio reflects a jobs-to-debenture portfo- lio ratio of at least 1 per $65,000. For more details, contact: U.S. Small Business Administration Maine District Office 68 Sewall St., E. S. Muskie Federal Bldg., Room 512 Augusta, ME 04330 207-622-8551 • 207-622-8277 Fax www.sba.gov/me Eastern Maine Development Corp. 40 Harlow St., Bangor (207) 942-6389 or (800) 339-6389 emdc.org Granite State Development Corp. 217 Commercial St., suite 301, Portland (207) 740-8659 or (207) 646-5988 granitestatedev.com Pine Tree State Certified Development Corp. 120 Exchange St., suite 205, Portland (207) 773-3104 frider@megalink.net pinetreestatecdc.com Microloan program Contact an SBA district office for information lenders or go to www.sba.gov/microloans. e program provides loans up to $50,000 to women, low-income, minority and veteran business owners by making money available to non- profit intermediaries that make the loans directly to start-up and existing businesses. e proceeds can be used for working capital, or to buy furni- ture, fixtures, supplies, materials or equipment. Microloans may not be used to buy real estate. Interest rates are negotiated between the borrower and the intermediary. e maximum term is six years. Because money is borrowed from the intermediary, SBA is not involved in the application or approval process. Payments are made directly from the business to the intermediary. Androscoggin Valley Council of Governments 125 Manley Road, Auburn (207) 783-9186 avcog.org CEI 30 Federal St., suite 100, Brunswick (207) 504-5900 ceimaine.org Community Concepts Finance Corp. 17-19 Market Square, South Paris (207) 743-7716 or (800) 866-5588 community-concepts.org MaineStream Finance 262 Harlow St., Bangor (207) 973-3500 or (800) 215-4942 mainestreamfinance.org Northern Maine Development Commission 11 W. Presque Isle Road, Caribou (207) 498-8736 or (800) 427-8736 nmdc.org

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