BUSINESS SEMINAR — Brenda Sheehy, director of the Cleveland State Small Business Development Center, right, talks about her office and Small Business Administration loan programs available during a recent seminar. In the background is business development specialist Jacqueline Merritt, of Nashville. Seated at the table are Vince Rogers, left, and Kim Lumsford, owners of Lexieloo Designs. Banner photo, DAVID DAVIS
“My heart really is with small-business owners and we really are here to help them,” she said.
Counselor David Hudson, who recently joined the Cleveland office, brings international business experience.
“He’s had businesses in Guatemala and several businesses in the (United) States,” she said. “He’s very knowledgeable.”
Hudson has a master’s in business administration in finance from Tulane University and Sheehy has an advanced degree in human relations.
“Between the two of us, I think we bring a lot to the table,” Sheehy said. “We want to talk to our clients about not making the same mistakes we’ve made, because when you make mistakes in your own business — it costs you lots of money.”
Sheehy said when she had no idea how many pools of money were available when she began as a business counselor three years ago.
“There are a lot of pools of money and here’s what I learned,” she said. “You have to find the right lender who knows what you are doing.”
She said guaranteed loans through the Small Business Administration are beneficial to entrepreneurs and commercial bankers because their exposure is considerably reduced.
Sheehy said most standard SBA loans are guaranteed 85 percent of loans up to $150,000 and carry 75 percent guarantee on loans in excess of $150,000.
“If an entrepreneur gets one of the loans and defaults on it, SBA will write the bank a check for $85,000 on a $100,000 loan,” Sheehy said.
She said banks prefer short-term lending of 12 months or less, but SBA loans have longer repayment terms of seven to 10 years for working capital and up to 25 years for property and equipment, not to exceed the usefulness of the equipment.
“The interest rate is negotiated between the bank and the borrower,” she said. “It would be best if the borrower negotiated a fixed interest rate so they will know how much they need to repay.”
Some borrowers pay interest only for the first six months and then principal and interest from that time forward.
Entrepreneurs need a bank that embraces their industry and if the loan is for a startup company, then it needs to find a bank that works with startups and the borrower’s industry of choice.
“A number of banks consider an entity to be a startup for the first 24 months and will not touch them,” she said. “We encourage entrepreneurs to learn the personality of financial institutions and not randomly submit applications.”
The SBA asks borrowers to begin with their regular bank if it is an SBA lender.
Sheehy said the SBA assists with developing a business plan and financial projections and putting the loan packet together.
“We don’t go to the lender with the person,” she said.
Seminars are scheduled. Registration is required for access to quality programs at no cost. For more information, call the Cleveland State Small Business Development Center at 423-614-8746. For more information about the SBA, please visit www.sba.gov/tn on the Internet.
Aug. 19 — Borrego Springs (one of the largest SBA lenders) is presenting a program at the Cleveland Bradley County Public Library at 5 p.m. Borrego Springs is the lender for programs including the Patriot’s Express loan for veterans only. These loans are available to the military community with a maximum ceiling of $500,000.
Sept. 15 — BERO informational meeting with Ronnie Wade at 10 a.m. in the Cleveland State Technology Conference Room.
Oct. 22 — Quickbooks Training will be held in the Cleveland State Business & Technology Building. Class is already filled, but call to be put on the waiting list for the next class.
