SBA pitch opportunities give entrepreneurs added chances
The number of loans backed by the U.S. Small Business Administration in Oklahoma climbed the over the past fiscal year.
In Fiscal 2017, which ended Sept. 30, the Oklahoma office of the SBA reports it backed portions of 584 loans involving about $265.8 million, compared to 562 loans worth about $257.4 million during Fiscal 2016.
The SBA’s top administrator in Oklahoma, Dorothy Overal, agrees the improved performance of the program likely has some ties to the contin- ued gradual recovery of the state’s economy.
But Overal also said she attributes some of that growth to ongoing efforts the agency has made to counsel entrepreneurs seeking dollars to open or grow their businesses.
Additionally, she said the SBA has helped those entrepreneurs get more chances to find the money they need by setting up pitch sessions attended by representatives from numerous banks and other nonprofit development organizations.
The SBA calls these lender matchmaking events for potential business owners. Think “Shark Tank,” but where you make your “eleva- tor” pitch to each bank or development organization separately, she said.
“It puts you in the driver’s seat,” Overal said. “If you interest any of these lenders, they’ll be calling you.”
Before that, though, Overal said the agency works with potential
business owners to help them refine their pitch.
“You can go to our resource partners, women’s and Small Business Development Centers, ahead of time and practice,” she said. “They’ll listen and give advice.”
Data released by Overal’s office this week shows it was involved in backing portions of loans from as small as $8,000 to as large as $5 million during Fiscal 2017.
Overal said the agency typically agrees to guarantee to lenders that it will back portions of qualifying loans in amounts ranging from 50 to 70 percent.
Advantages that backing provides to borrowers is that it gives lenders an assurance they can recover some of the money if the deal goes bad, particularly in cases where the loan involves an entrepreneur with no credit history who is seeking to create a startup business.
For already established, growing businesses, that SBA backing often makes it possible for the lender to provide a longer repayment period to the business owner, which lowers the loan payments the owner has to make to retire the debt.
Other times, that backing will lessen up-front investment requirements from owners seeking the loans.
“Our backing provides a level of security to the bank,” Overal said.
Linda Glass, vice president of BancFirst, agrees that the SBA and its loan guarantees make it easier for commercial lenders to help people start and grow their businesses.
During Fiscal 2017, BancFirst made 115 loans worth about $45.5 million that were backed by the SBA, topping the list of banks involved in SBA-backed loans for the year.
Glass observed the SBA guarantee involving a typical loan under $150,000 is 85 percent, and that larger loans carry a 75 percent guarantee.
‘’So the bank’s exposure is 25 percent (or less), and that helps mitigate potential weaknesses when you start talking about startup businesses, or business acquisitions that have a lot of blue sky (goodwill) involved.”
‘Take advantage’
One business owner who has benefited from SBA backing encourages anyone who is thinking about starting or growing a business to get in touch with the agency.
“Whether you need a loan or not, you need to visit with the Small Business Administration — people need to take advantage of that,” said “Bronko” Carr, a restaurateur and sauce maker in eastern Oklahoma.
“They educated me about the business of being in business.”
Earlier this decade, Carr worked with the SBA, the Oklahoma State Chamber, Oklahoma State University and Oklahoma’s Department of Agriculture, Food and Forestry to put together a barbecue sauce business that ultimately sold products both at home and abroad.
He started the business with the intent to become the world’s top sauce man, and before long, was selling seven different sauces, a seasoned flour and two types of rubs in his journey to make that happen.
As for the SBA, Carr said its networking system proved to be phenomenal in helping him get his business going.
For now, Carr’s pulled his products from the market as he continues to grow a barbecue restaurant he’s opened between Checotah and Eufaula off U.S. 69 called Bronko’s Pit Q and Grill.
He said establishing the restaurant “put him on the map,” drawing interested barbecue and barbecue sauce customers from as far away as Africa and China, all of whom want to learn more about the southern staple and his sauces.
On Thursday, Carr said he will reintroduce his line of sauces and other products to consumers across the globe.
He said he’s reworking his manufacturing and distribution plans to improve his ability to survive in a market that’s dominated by the international condiment producers he finds himself up against.
“We are revamping to hit the market again. But this time, we’ve got more experience,” he said.