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Este informe no está disponible en español. CARIBBEAN BUSINESS Starting a business during uncertain times Entrepreneurs with a well-prepared business plan and adequate financial and technical assistance improve their chances of success over time By JOSE L. CARMONA May 27, 2005 Small businesses are making big strides Plenty of financial and technical resources are available for those wishing to start or expand their own small business in Puerto Rico There are more than 120,000 small businesses in Puerto Rico, which together generate more than 60% of all new jobs and nearly half of the island’s gross domestic product, according to data from the U.S. Census Bureau and other federal and local government agencies. Small businesses are indeed the heart of Puerto Rico’s economy. In addition, when we talk about small businesses, we really are talking about small. U.S. Census Bureau data shows 95% of all businesses in Puerto Rico employ less than 50 workers and 60% have one to four employees. Since many have been displaced, laid off, got tired of working for others, or are simply looking for bigger and better economic opportunities, each year, scores of local entrepreneurs decide to start their own business. Unfortunately, a considerable number of them fail in their attempts because they lack the preparation, planning, or foresight. In 2004, there were 13,237 bankruptcy filings in Puerto Rico, of which 718 were commercial bankruptcies. What is more, recent statistics from the U.S. Census Bureau and the U.S. Small Business Administration (SBA) indicate 40% of new business start-ups fail within a year and 80% within five years. Frightening as they are, these statistics demonstrate it takes a little more than determination, luck, and a great idea or product to make a business successful. Starting a business is no walk in the park, even in the best of circumstances. Starting or expanding one during a soft economy like we have in Puerto Rico today is even more challenging. Statistics and those entrepreneurs who already have been down that path indicate that now, more than ever, businesses that are prepared–which entails finding a niche, analyzing the competition, developing business and marketing plans, and seeking financial and technical assistance–have a much better chance of succeeding in the long term than those that don’t. Help is available Several local and federal resources are available that provide business advice as well as financial and technical assistance to budding entrepreneurs who want to start or expand a business. Leading the pack is the U.S. Small Business Administration (SBA) and its resource partners such as the Puerto Rico Small Business Development Center, the Service Corps of Retired Executives (Score), the SBA Business Information Center, and the Women’s Business Institute. The SBA has numerous programs and services to assist entrepreneurs in almost every aspect of starting a business, including developing a business plan, obtaining financing, marketing the products and services, and managing the company. Best of all, many of their counseling and assistance services are free. SBA loan programs are available through SBA-designated preferred lenders, which are commercial lending institutions with the direct authority to approve SBA loans without having to submit applications to the SBA. Preferred lenders in Puerto Rico include Banco Popular of Puerto Rico, Banco Bilbao Vizcaya Argentaria Puerto Rico, Banco Santander, FirstBank, Westernbank, Doral Bank, Eurobank, Scotiabank Puerto Rico, Oriental Bank & Trust, and R-G Premier Bank. As of April 30, the SBA’s Puerto Rico & U.S. Virgin Islands District office had guaranteed 672 loans for $77 million. According to SBA District Director Carmen Ana Culpeper, the numbers compare favorably with those reported during the same period last year, when the SBA granted 636 loans for $75 million. "Although our most recent numbers don’t reflect a significant growth from last year, one must recognize all the economic problems Puerto Rico faced and that last year we experienced the largest volume of loans of the past 10 years," Culpeper told CARIBBEAN BUSINESS. "During the full fiscal 2004, the SBA guaranteed 1,192 loans for $152 million." The federal fiscal year begins Oct. 1 and ends Sept. 30. Other institutions that provide assistance to small businesses include the Puerto Rico Chamber of Commerce, United Retailers Association of Puerto Rico, the Puerto Rico Islandwide Minority Business Development Center, the Economic Development Bank for Puerto Rico, the Puerto Rico Trade & Export Co., and the Corporation for the Economic Development of the Capital City. "Each of these institutions and organizations in Puerto Rico are doing their part to help foster and develop more small businesses. [They are doing that] by bringing down the roadblocks that may impede their development. [They also] provide more information and assistance to small businesses and entrepreneurs to make their dreams a reality, with knowledge to reduce their risks," said Culpeper, a former president of the Puerto Rico Chamber of Commerce, the Puerto Rico Telephone Co., and a past secretary of the Puerto Rico Treasury Department. "We want more successful businesses." Interest in entrepreneurship growing Culpeper has noticed an increase in the number of people who attend community seminars given by the SBA in conjunction with other associations, stating there has been greater attendance than in previous years. "Every time we hear that a company or the government is going to lay off workers, many see it as an option to make it on their own, by setting up a small business," the local SBA district director said. "That desire to explore that additional avenue is there, right now. We saw it last month during the small-business week activities." It is unfortunate, said the local SBA district director, that on a local level, big companies get more recognition than small businesses, when it is the small businesses that take the leadership role and the risks without getting any government incentives. "The topic of discussion always has been the big companies, maybe because these are the ones that get the tax incentives, have more power, and get legislation passed that is beneficial to them. The reality is that small businesses are the ones set to become tomorrow’s midsize and large businesses, yet they are the ones that receive all the punches and still thrive during hard times," Culpeper said. Since most small businesses are family-owned, Culpeper said she is concerned many would-be entrepreneurs may not have the necessary collateral or good credit to acquire the money needed to start or expand a business. Traditionally, entrepreneurs have used property, usually their home, as collateral to obtain a loan to start or expand their business. As a result of the refinancing boom spurred by low interest rates during the past few years, many homeowners have used their home equity to pay off debt, thus leaving them with little or no collateral for a loan, whether for a line of credit as working capital, or to solve a temporary cash-flow problem. It must be noted that there are loans that don’t require collateral, such as the SBA’s 7(m) Micro Loan. To that end, Culpeper advises any person wishing to start or expand a small business to take good care of his or her credit, because it is that good credit that will allow them to get the loan to start the business or pay for unexpected expenses. "And take good care of that loan if you get one," she added. Access to capital not a problem There is a misconception that the main problem local entrepreneurs face is finding enough working capital, and that simply isn’t true, said Carmen Martí, executive director of the Puerto Rico Small Business Development Center (PR-SBDC). The PR-SBDC is a leading resource partner of the SBA which, through a partnership with Inter American University, provides management, financial and technical assistance, counseling, and training to prospective and small-business owners. "I say there is always an investor, a commercial banker, or a local or federal government entity that will be able to get you the money. It could be a joint venture or a private party. There is always someone who is going to like your project, but you must be able to sell it very well and really believe in it to make it happen," Martí added. "For every good idea, business plan, and proposal, there is good financing." The main reason loan applications are rejected is because people bring incomplete or inadequate documentation, Martí said. "I’ve seen a lot of people come for a loan, but they don’t bring the correct documentation, their application preparation is inadequate, or they aren’t prepared to negotiate or talk to a banker," Martí added. "We help that entrepreneur sit down with a banker and talk about financial projections and negotiate what he or she wants. That’s all part of the job we do here." That’s why, Martí added, planning is so important, as well as having a detailed business plan. "You have to take your time to do it right," she added. "There is no rush. Planning is very important." Since its inception in 1997, the PR-SBDC has provided direct counseling to more than 12,400 clients and $160 million in loans to small businesses, averaging nearly $25 million a year. It serves an estimated 2,700 small businesses on the island each year through seven regional centers: Inter American University’s Arecibo, Bayamón, Caguas, Fajardo, San Germán, San Juan, and Ponce campuses. It also has the Technology Development & Commercialization Center and the International Trade Center, both in Hato Rey. Government’s ‘Key to Your Business’ program As part of his political campaign platform, through an executive order issued in March, Gov. Aníbal Acevedo Vilá established a $30 million venture-capital fund through the Government Development Bank called La Llave Para Tu Negocio (The Key to Your Business). The fund is part of his economic development program called Apoyo Al De Aquí (Support of Local Entrepreneurs) that intends to create 1,000 new small businesses within the next four years. Although La Llave Para Tu Negocio program hasn’t begun and its specifics haven’t yet been worked out, it will invest primarily in business incubators that need capital to start operations as well as in established businesses that need additional money to expand. The maximum amount to be loaned through the program will be $50,000. Some type of guarantee (collateral) eventually may be required to those who request loans greater than $25,000, and entrepreneurs may have to take training to maximize the success of the businesses. SBA’s Culpeper said she was happy the government recognized the importance of small businesses with the program, although warned about changing its real purpose and objective. "The government must stay focused and must follow up on it. On many occasions, the government has promoted similar programs that were intended as loans in the beginning, but were then turned into grants later on," Culpeper explained. "The people could start their businesses, work on them for a year, and then shut them down without losing or having to pay anything back." Throughout this process, it is important for people in this type of program to receive technical assistance so that when they go to take the money to set up their businesses, they really have a guide about what to do to become successful, said the local SBA district director. "The government must implement its public policy. I believe La Llave Para Tu Negocio is a very important strategy, but we must try not to send the wrong message that everybody has a right to have his or her own small business without having to pay anything back," noted PR-SBDC’s Martí. "Guidelines must be very clearly established as to what type of financing will be provided and at what percentage, to avoid confusion. I am totally opposed to the government giving away 100% of the funds without any guarantees, because then there’s no commitment, no added value." It can be done With hard work, creativity, and resourcefulness, more and more local small businesses are living proof that challenging economic times and increased competition are no obstacles to achieving success. An automobile ignition-wire and accessories manufacturer in Bayamón is leaving stateside competitors in the dust through better products and pricing; a family restaurant in Guaynabo found success by offering exotic dishes at reasonable prices; an automobile-service center in Florida is filling the growing need for auto repair in the area; and a toy store in Caguas has found success by selling educational and interactive toys for children and adults. What are these businesses doing differently that has allowed them to achieve success? Can a new business really make it in Puerto Rico when consumers’ pockets are getting smaller? How do you beat the competition and succeed? To find out, CARIBBEAN BUSINESS interviewed these representative small businesses on the island and learned that each had carved out a niche, is sticking to the business plan, and is providing customers with excellent service and value for the money. Here are their inspiring stories. B&B Manufacturing In 1985, Orlando Burgueras started B&B Manufacturing, a maker of automotive ignition wire sets and accessories, after splitting up with a business partner doing the same line of work. Burgueras established B&B in a rented 4,500-square-foot module in Bayamón. With only seven employees, the company’s focus was on introducing its line of ignition wires to the local market. At the time, B&B manufactured quality original-equipment ignition-wire sets. By the beginning of the 1990s, B&B already had gained a majority share of the market in Puerto Rico by establishing innovative marketing strategies, such as a consignment program with local auto parts, which covered the entire island. For B&B to obtain substantial growth, Burgueras was aware he had to go beyond the island’s natural borders and decided to establish a strong presence in international markets. With few resources, but armed with a lot of creative ideas and vast export experience, Burgueras began his marketing efforts to position B&B products in the Caribbean and Central and South America. Burgueras used the assistance provided by the PR-SBDC’s International Trade Center in his export efforts. He obtained an additional 4,500 square feet of rented warehouse space next door, until he later was able to rent a new 23,000-square-foot building across from B&B’s original location. Through SBA’s Certified Development Company 504 Loan Program, Burgueras was able to buy the 23,000-square-foot building, something he wouldn’t have been able to do on his own. "Without the SBA, I wouldn’t have been able to acquire the building, which is now one of the company’s main assets," Burgueras noted. As all this was happening, the auto-parts industry was rapidly evolving, becoming more specialized and sophisticated. This had a dramatic impact on the entire industry. Of the 100 ignition-wire manufacturers operating on the U.S. mainland in 1992, fewer than 10 remain in business as a result of consolidations, intense competition, and bankruptcies. Out of the three ignition-wire manufacturers on the island 20 years ago, only B&B has remained in business. Two and half years ago, Burgueras purchased the 23,000-square-foot Fomento building as a step toward entering into the performance ignition-wire market for race cars, competing head-to-head with such leading brands as Accel, Moroso, and MCD. Last year, B&B’s performance ignition-wire set, called OML The Platinum Racing Wire, outbid two leading stateside performance-wire manufacturers and began selling at all Pep Boys auto-parts stores on the island. Burgueras plans to visit the Pep Boys headquarters this summer in hopes of securing a contract that will allow B&B to sell its entire product line, mainly the performance-wire sets, in all stateside stores as well. The contract between auto parts supplier Borg Wagner and Pep Boys expires in December. "We are the only ignition-wire company that sells to the aftermarket and to the performance market," noted Burgueras, who is very confident of securing the national contract with Pep Boys. Burgueras has plans to continue to expand the business through increased export sales and improving its product line, mainly the performance wires as well as the aftermarket business. B&B also manufactures products for private labels. He uses the services of the Ex-Im Bank when doing business with foreign countries. "I just came back from Spain where I attended an important auto show. The Puerto Rico Trade office in Spain arranged several business meetings. It would have been impossible for us to do business in Spain without their help," Burgueras said. Burgueras, who is a big supporter of trade missions and a member of trade organizations such as the Export Council and the Free Trade Agreement of the Americas, said the secret of B&B’s success lies in the fact that his company manufactures a much better product at a lower price than the leading stateside competitors. B&B Manufacturing and its products have received numerous awards and recognitions, both locally and nationally, including Exporter of the Year and Excellence in Quality awards on several occasions. The company, with 55 employees, reported $3.5 million in sales last year, of which 50% were export sales. Pícalo Restaurant Ricardo Mateo always dreamed of having his own small business. However, he was aware he needed to gain experience in such areas as management, marketing, and human resources. After working in the private sector for nearly 13 years–first with Plaza Provision in the areas of sales and marketing and later with Coors Brewing Co. as marketing manager–and completing a bachelor’s degree in accounting and a master’s in marketing and finance, Mateo felt the timing was right to become an entrepreneur. "At the time, I felt I was prepared, spending a year and half searching [for] what kind of adventure I could undertake that could be viable," Mateo recalled. Since Guaynabo is a fast-growing city, Mateo realized the restaurants available throughout the city were good, but their choices of food were somewhat limited. "I wanted to bring to Guaynabo the taste of international creative cuisine found in tourist areas, but at a reasonable price," Mateo explained. Mateo and his wife Vanessa visited the offices of the PR-SBDC to see what kind of assistance they could receive. There they received assistance in preparing a business plan and a financial-loan package. "The SBDC referred us to a bank and later helped us in submitting all the documentation required by the bank," Mateo said. "Since we were starting a business from scratch and not purchasing an existing one, banks usually are shy when it comes to approving loans. That’s why the SBDC came into the picture and helped us. Without them, I probably still would be working in the private sector. The SBA guarantee was crucial." Mateo received an SBA loan for approximately $300,000, which was used to refurbish a rental location, the site of the former Guaynabo Court building on PR-169. Part of the loan was used for working capital, as the remodeling work took four months. His wife carefully selected the name Pícalo (Cut It) for the restaurant, which means everything prepared at the restaurant has to be cut in pieces. In September 2003, Pícalo Restaurant opened its doors with rousing success. "From the first week, we have been able to meet or exceed our sales projections, even during periods considered slow in the restaurant industry," Mateo said. "We were able to pay the construction expenses during the first three months of operations. We don’t owe money to suppliers." Mateo declined to reveal sales figures for personal reasons, but added that sales during the second year of operations so far are up by 25% over the first year. The main area sits 110 guests, while the meeting room has a capacity for 34. There also is a bar and wine cellar. The restaurant’s meeting room has become a popular gathering place for healthcare professionals as well as for family gatherings, Mateo said. "Vanessa is the life of the party and the face of Pícalo, while I am more the manager behind the scenes," noted the restaurant owner. Pícalo is open Tuesday to Sunday and closed Monday. Mateo and his chef prepared the main menu, which features pastas, meats, seafood, and salads. Plate prices range from $5.50 to $33. Pícalo, which started with nine employees, now has 22. "Four months after we opened, we introduced exotic plates such as alligator, ostrich, bison, frog legs, and duck, which are highly requested when we have them available. Some order out of curiosity, others because they like it," Mateo added. "We plan to keep the exotic menu because it is very popular." There are plans to expand the restaurant by adding another section to it because there is vacant space available next door. Mateo said he also is considering opening a second Pícalo Restaurant in the not-so-distant future, probably in a large population city such as Ponce, Mayagüez, or Dorado, and following the same formula as the first one: a family-type restaurant. Mateo credits Pícalo’s success to its unique concept, where high-quality international cuisine and good service are offered at a reasonable price in a cozy, family-type environment. "Our clients compare our food and service to the best restaurants they have visited," Mateo added. Kosovo Auto Care Center Experiencing spinal damage from his participation in the military conflict in Kosovo, Julio Carrión received an honorable discharge from the U.S. Army, but had no idea what he was going to do when he returned in 2001 to the town of Florida in Puerto Rico. Having worked for the Puerto Rico Ports Authority for 11 years before being called to active duty, Carrión had his old job waiting for him, but because of his back injuries, he was unable to pick up where he left off. Moreover, Carrión had filed for bankruptcy under Chapter 7 (total liquidation) several years before, making it impossible for him to obtain any type of financial assistance to move on. He opened a small air-conditioner repair shop, but wasn’t garnering much success. To make matters worse, one night Carrión and his wife were victims of a carjacking, a crime that left her completely paralyzed after the perpetrator repeatedly shot her. Although his wife is much better now, the huge medical bills started to pile up. Carrión’s initial military pension was $540 a month which, along with his Ports Authority pension of $389, wasn’t enough to make ends meet. "I had a family to support and no idea how I was going to do it," Carrión stated. In January 2003, the veteran started to find a way to establish a car-inspection and repair center, but the permit request was revoked by the Department of Transportation & Public Works, stating there already was an inspection station in Florida. "Before me, several other applicants were revoked for the same reason," Carrión recalled. Carrión visited the Ombudsman’s Office for People with Disabilities and pled his case before them. Through the Ombudsman’s Office for Veterans, Carrión was able to obtain the elusive permit for his auto-inspection and repair center. Carrión met with the SBA and a local bank to obtain credit for the inspection center, but the application was rejected because of his past Chapter 7-bankruptcy filing. Carrión decided to call the Veterans Administration Rehabilitation Center, where he met with counselor Loraine Martínez who, in turn, called the Veterans Business Development Officer at the SBA’s Puerto Rico & U.S. Virgin Islands district office. "After hearing my story and understanding my situation, the SBA put me in touch with Pedro Acevedo, director of the Women’s Business Institute," Carrión recounted. "He asked me to meet him at the institute’s satellite office in Manatí." After meeting with Carrión, Acevedo visited the location and listened to the veteran’s ideas on how to turn it into an automobile-service center. The Women’s Business Institute did much of the legwork that Carrión needed, from market viability studies to demographic research, to setting up a brainstorming meeting with the SBA, the Veterans Administration (VA), and bank officials. "The consensus was a big ‘No,’" Carrión remembers. "That is perhaps the biggest obstacle I have encountered. There was no way I was going to get that loan. I was bankrupt, my credit was completely damaged." After much discussion about how Carrión could be helped, he obtained an $80,000 grant through the VA and, in October 2003, was able to transform a rental location into Kosovo Auto Care Center. Located on Arizmendi Street in Florida, the auto center offers basic services, from car inspections to oil changes, brake repairs, and alignments. "I already had about $35,000 worth of tools and equipment, and I did all the iron fence work, which saved me quite a bit of money," Carrión added. Carrión started the business with one employee. In just three months, he had generated close to $9,000 in sales. After six months, the business already had doubled the original sales projections. Now, with three employees, Kosovo Auto Care Center generates $6,000 to $7,000 monthly. Carrión is in conversation with the property owner where his repair shop is located to see if he can purchase it for $225,000 with help from the SBA. Carrión also has taken several management and technical assistance courses with the SBA. Intellikids In her quest to find better products to help her two young daughters improve their educational skills, in 2001, Alison Torres discovered a dire need for educational toys and tools for children and immediately saw a great business opportunity. "I was looking for a tool other than the traditional flash cards that would make it easier for me to teach my daughters math basics, but very little was available locally," explained Torres. "In the process, I also discovered parents of children with special needs were having a hard time finding educational tools for their children." With a solid educational background and previous management experience from a previous business, Torres decided to visit the PR-SBDC and take one of their workshops on preparing a business plan. "That’s when I realized I needed to do more research," she admitted. She decided the focus of her business would be selling educational toys and tools that could be used by teachers and parents to encourage the cognitive development of children during their formative years. Using her unused vacation days from her job with the municipality of Caguas, Torres started researching and fine-tuning her business idea, reading surveys and field studies on the subject, as well as visiting local toy stores to see what they offered. She also started her search for the right suppliers and different types of products she wanted to sell. Most of her research was done on the Internet. "I also visited the Toy Fair in New York and came back with a bag full of ideas. I also made contact with many distributors and suppliers," Torres added. "That was the turning point when I decided to quit my job with the city of Caguas to dedicate 100% of my time to opening the business." The PR-SBDC provided assistance with the permitting process, such as obtaining the patente (business license) and all the necessary government endorsements. Although Torres would establish the business at a location she owned in Caguas, the SBDC helped her obtain financial assistance through a $48,000 commercial loan from the Economic Development Bank. Torres used the loan to purchase additional inventory since she had started purchasing part of it with her own money. "Although I had previous business experience, the assistance provided by the SBDC was pivotal because there were things I didn’t envision, important things such as insurance," said Torres. "They did all the business analysis and helped me prepare a good business plan." Therefore, in March 2002, Intellikids opened its doors in Caguas with three employees: Torres; her mother, who is a special-education teacher; and an occupational therapist. The store carries $75,000 worth of inventory. Although in the beginning, she hadn’t contemplated having educational toys for children with special needs, her mother encouraged Torres to do so. Coincidentally, her first client was a father of an autistic child. "Now, we specialize in toys for children with special needs, such as those taking speech therapy or with cerebral palsy or autism," said the Intellikids owner. "We also sell to pathologists, therapists, psychologists, and physical-therapy centers because there is a huge need out there for these products. One out of every 166 babies born in Puerto Rico is autistic." Intellikids carries a full line of educational and entertainment-only toys that, although they aren’t all aimed at children with special needs, are designed to develop their cognitive and motor skills. Prices range from $4.99 to $99.99. "We also carry special-educational toys for adults because we learned that those who have had a stroke, an accident, or have Alzheimer’s lose their short-term memory," said Torres. "These products greatly help in keeping an active memory." The store also carries Spanish-language educational software games for computers that are specially designed for children with speech problems, dyslexia, and other problems. On Saturdays, Intellikids offers sensory art classes for children ages two and up, as well as for adults. The store also has a children’s group called Club de Intelliamigos that meets monthly for two hours every second and third Saturday to do handicrafts and to play games. The cost is $10 each session and includes materials. The club has 150 members. Although Torres declined to reveal sales figures, she said sales during the second year were up 65% from the first year, and she expects this year’s sales to double. "I am very happy with the store’s success, but one of the things I like most about it is that it promotes family unity since many of the games are played among family members," Torres concluded. Quick reference to SBA loan programs Here is a rundown of the U.S. Small Business Administration’s (SBA) most popular loan programs: 7(a) Loans: SBA’s primary business-loan program generally is used for business start-ups and to meet the varied short- and long-term needs of existing small businesses. Under 7(a), the SBA guarantees loans to small businesses that can’t obtain financing on reasonable terms through normal lending channels. The maximum loan amount is $2 million, and the SBA will guaranty 75% of the loan. SBA Loan Prequalification Program: This program enables the SBA to prequalify veterans, minorities, women, exporters, rural small-business owners, and others for a 7(a) loan guarantee before going to the bank. The maximum loan amount is $250,000. 7(m) MicroLoan: Provides short-term loans of up to $35,000 to small businesses and not-for-profit childcare centers for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery, and/or equipment. Proceeds can’t be used to pay existing debts or to purchase real estate. The SBA makes or guarantees a loan to an intermediary that, in turn, makes the microloan to the applicant. These organizations also provide management and technical assistance. The loans aren’t guaranteed by the SBA. Certified Development Company 504 Loan Program: Provides long-term, fixed-rate financing to small businesses to acquire real estate, machinery, or equipment for expansion or modernization. Typically, a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a certified development company (funded by a 100% SBA-guaranteed debenture) with a junior lien, covering up to 40% of the total cost, and a contribution of at least 10% equity from the borrower. The maximum SBA debenture generally is $2 million though it can go as high as $4 million in some cases. Export Working Capital (EWCP): This program was designed to provide short-term working capital to exporters. The EWCP supports export financing to small businesses when that financing isn’t otherwise available on reasonable terms. The program encourages lenders to offer export working-capital loans by guaranteeing repayment of up to $1.5 million or 90% of a loan amount, whichever is less. A loan can support a single transaction or multiple sales on a revolving basis. SBAExpress: The SBAExpress makes capital available to businesses seeking loans of up to $250,000 without requiring the lender to use the SBA process. Lenders use their existing documentation and procedures to make and service loans. The SBA guarantees up to 50% of an SBAExpress loan. Like most 7(a) loans, maturities are usually five to seven years for working capital and up to 25 years for real estate or equipment. For revolving credit, borrowers may take up to five years after the first disbursement to repay the loan. This Caribbean Business article appears courtesy of Casiano Communications. or
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