The World of Computer Software/World_Of_Computer_Software-02-387-Vol-3of3.iso/f/finall.zip/FINALL.TXT

Text File | 1992-09-10 | 99KB | 2,383 lines

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║ HOW TO RAISE MONEY FOR A SMALL BUSINESS║
╚════════════════════════════════════════╝
Successful small business expansions and new
formations lead the way in creating new
markets, innovations and jobs that fuel
economic growth and prosperity.

In recognition of the importance of
small business to a strong economy, the
U.S. Small Business Administration
(SBA) is pleased to help meet the
information needs of existing business
owners and aspiring entrepreneurs.

We hope "Focus On The Facts" meets your
needs and we invite your comments and
questions. Your success in business depends
on what you know and how well you can apply
what you have learned.

╔════════════════════════════════════════╗
║ RAISING MONEY                          ║
╚════════════════════════════════════════╝
One key to successful business start-up and
expansion is your ability to obtain and
secure appropriate financing. Raising
capital is the most basic of all business
activities. But as many entrepreneurs who
are just beginning quickly discover, raising
capital may not be easy. It can be a
complex and frustrating process. But if
you are informed, well prepared and
have planned effectively, raising money for
your business will not be a painstaking
experience.

This information summary focuses on the ways
a small business can raise money and
describes how to prepare a loan proposal.

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║ WHERE TO FIND THE MONEY YOU NEED       ║
╚════════════════════════════════════════╝
There are several sources to consider when
looking for funding. It is important that
you explore all of your options before
making a decision.

∙  Personal Savings: Most new businesses are
   started with the primary source of
   capital coming from personal savings and
   other forms of personal equity.

∙  Friends and Relatives: Many entrepreneurs
   look to private sources such as friends
   and family when starting out in a
   business venture. Oftentimes, money is
   loaned at no interest, or with low
   interest, which can be beneficial when
   getting started.

∙  Venture Capital Firms: These firms
   provide start-up and other needed money
   for new companies in exchange for equity
   or part ownership.

∙  Banks and Credit Unions: the most common
   source of funding, banks and credit
   unions will provide a loan if you can
   show that your business is sound.

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║ BORROWING MONEY                        ║
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It is often said that small business
people have a difficult time borrowing
money. This is not necessarily true.
Banks are in the business to make
money, and the way they make money
is by lending money. However, it is the
inexperience of small business owners
in financial matters, that prompts many
small business loan requests to be
turned down. To be successful in
obtaining a loan, you must be prepared
and organized. You must know exactly
how much money you need, why you
need it and how you can pay it back.
You must be able to convince your
lender that you are a good credit risk.
Requesting a loan when you are not
properly prepared makes a statement to
your lender. That statement is. . ."High
Risk!"

╔════════════════════════════════════════╗
║ BUILDING EXCELLENCE IN ENTERPRISE      ║
╚════════════════════════════════════════╝
Types Of Business Loans

Short-Term Loans: Loans that are paid
back in less than one year. Types of
short-term loans include:

∙  Working Capital Loan
∙  Accounts Receivable Loan
∙  Line of Credit (Revolving Credit Line)
Long-Term Loans: Loans with
maturities greater than one year but
usually less than seven years. These
loans are used for major business
expansions, purchases of real property,
acquisitions and in some instances
start-up costs. Types of long-term loans
include:

∙  Personal Loan
∙  Commercial Mortgage
∙  Term Loan


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║ HOW TO WRITE A LOAN PROPOSAL           ║
╚════════════════════════════════════════╝
Approval of your loan request
depends on how well you present
yourself, your business and your
financial needs to a lender. Remember
lenders want to make loans, but they
want to make good loans, loans they
know will be repaid. The best way to
improve your chances of obtaining a
loan is to prepare a written loan
proposal.

A good loan proposal will contain the
following key elements:

General Information

∙  Business name, name of principals social
   security number of each principal and
   business address.

∙  Purpose of the loan - State exactly what
   the loan will be used for and why it is
   needed.

∙  Amount required - Request the exact
   amount you need to achieve your purpose.

Business Description

∙  History and nature of business - Give
   details of your business's age, number of
   employees and current business assets.

∙  Ownership structure - Provide details on
   your company's legal structure.

Management Profile

∙  Management description - Develop a short
   statement on each principal staff member
   in your business; provide background,
   education, experience, skills and
   accomplishments.

Market Information

∙  Clearly define your products and market.

∙  Identify your competition and explain how
   your business competes in the
   marketplace.

∙  Profile your customers and explain how
   your business can satisfy their needs.

Financial Information

∙  Financial statements - Provide balance
   sheets and income statements for the past
   three years. If you are just starting
   out, provide a projected balance sheet
   and income statement.

∙  Personal financial statement - Prepare a
   personal financial statement on yourself
   and other principal owners of the
   business.

∙  Collateral - List all collateral you
   would be willing to pledge to the bank as
   security for the loan.

╔════════════════════════════════════════╗
║ HOW YOUR LOAN REQUEST WILL BE REVIEWED ║
╚════════════════════════════════════════╝
A loan officer's primary concern
when reviewing a loan request is
whether or not the loan will be repaid.

To help answer this question, many
loan officers will order a copy of your
business credit report from a business
credit reporting agency. Therefore, it is
helpful if you work with these agencies
to help them prepare an accurate picture
of your business. Using the credit
report, and the information you have
provided, the lending officer will
consider the following issues:

∙  Have you invested savings or personal
   equity in your business totaling at least
   25% - 50% of the loan you are requesting?
   Remember a lender or investor will not
   finance 100% of your business.

∙  Do you have a sound record of credit
   worthiness as indicated by your credit
   report, work history and letters of
   recommendations? This is very important.

∙  Do you have sufficient experience and
   training to operate a successful
   business?

∙  Have you prepared a loan proposal and
   business plan which demonstrates your
   understanding of the business and your
   commitment to the success of the
   business?

∙  Does the business have sufficient "cash
   flow" to make the monthly payments on the
   loan request?

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║ SBA FINANCIAL PROGRAMS                 ║
╚════════════════════════════════════════╝
The SBA offers a variety of
financing options for small businesses.
However, it rarely makes a direct loan
to an individual or company. The
Agency is primarily a guarantor - it
guarantees loans made by banks and
other private lenders to small business
clients.

SBA guaranteed loans generally do not exceed
$500,000, of which the Agency guarantees 85
or 90 percent of the loan balance to the
bank. The average size of an SBA guaranteed
loan is $175,000 and the average maturity
about eight years. SBA guaranteed loans are
obtained through
private lenders.

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║ HOW TO GET MORE INFORMATION            ║
╚════════════════════════════════════════╝
Information is power! - Make it your
business to know what business
information is available, where to get it
and most importantly, how to use it.
Sources of information include:

╔════════════════════════════════════════╗
║ U.S. SMALL BUSINESS ADMINISTRATION     ║
╚════════════════════════════════════════╝
∙  SBA District Offices

∙  Small Business Development Centers
   (SBDCs)

∙  Service Corps of Retired Executives
   (SCORE)

∙  Small Business Institutes (SBIs)

Consult your telephone directory
under U . S . Government for your local
SBA office or call the Small Business
Answer Desk at l-800-368-5855 for
information on any of the above
resources. In Washington D.C. call
653-7561. Also, you may request a free
Directory of Business Development
Publications from your local SBA
office or the Answer Desk.

Other Sources

∙  State Economic Development Agencies
∙  Chambers of Commerce
∙  Local Colleges
∙  The Library
∙  Manufacturers and suppliers of small
   business technologies and products.

Good Luck!SMALL LOAN PROGRAM

THE PROGRAM

The U.S. Small Business Administration (SBA) started the Small Loan Program
to meet the ever-growing need for loans of $50,000 or less.  These loans will
be particularly valuable to small firms in the service sector.  Under this
program, the SBA changed the guaranty fee to participating lenders and
simplified the application form to encourage lenders to consider SBA-
guaranteed loans of $50,000 or less.  The change in the program allows
lenders making SBA-guaranteed loans of $50,000 or less with maturities
greater than 12 months to retain half of the guaranty fee that is normally
paid to the SBA.  For example, a $50,000 loan with a 90 percent guaranty has
an SBA- guaranteed portion of $45,000, and the two percent guaranty fee would
be $900.  Under the new changes, the lender may retain $450 and forward $450
to SBA, or, at its option, the lender may choose not to charge the small
business borrower the half of the guaranty that it would have retained.  The
guaranty fee remain at two percent of the amount that the SBA guarantees on
loans exceeding $50,000 with maturities greater than 12 months.  The lender
pays the guaranty fee to SBA.  However, the lender may charge the fee to the
small business borrower.  A new and simplified application form (SBA Form 4
Short Form) has been designed by the SBA to make the program easier to use.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.  The SBA has offices located around the country.  For
the one nearest you, consult the telephone directory under U.S. Government,
or call the Small Business Answer Desk at 1-800-U ASK SBA.

All of SBA's programs and services are extended to the public on a non-
discriminatory basis.
INTEREST RATE POLICY



POLICY

The U.S. Small Business Administration's (SBA) interest rate policies vary,
depending on the typeof loan assistance.

Interest rates for direct loans are based on a survey of the investment
market for federal fixed-income securities.  The rates are adjusted
quarterly.

On the other hand, interest rates on guaranteed loans are negotiated between
borrowers and lenders, although rates cannot be any higher than maximum
levels set by SBA regulations.

Maximum rates are based on the lowest New York prime rate on the date the SBA
receives the application.  For loans with maturities of less than seven
years, the maximum rate is 2.25 percentage points above the prime rate.  For
loans with maturities of seven or more years, the maximum rate is 2.75
percentage points above the prime rate.

For immediate participation loans, the maximum interest rate for the lenders'
share is one percentage point below the maximum guaranty rate for loans with
comparable maturities.

The interest rate may be fixed or variable, depending on negotiated loan
agreements between the borrower and the lender.

VARIABLE RATE PEGS

Variable rate loans may be pegged to either the lowest New York prime rate or
the SBA optional peg rate.  The optional peg rate is a weighted average of
rates the federal government pays for loans with maturities similar to the
average SBA loan.  It is calculated quarterly and published in the Federal
Register.

The lender and borrower negotiate the amount of "spread" which will be added
to the "base"  (New York prime or optional peg) rate; not more than 2.25
percentage points on loans with maturities of less than seven years, and not
more than 2.75 percentage points on loans with longer maturities.

Although there may be exceptions, generally, the rate cited in the note upon
which payment calculations are based will be the base rate plus the
negotiated spread.

An adjustment period is selected which will identify the frequency with which
the note rate will change.  It can be monthly, quarterly, semi-annually, or
annually.  While it is possible that the base rate (prime, for example) could
change numerous times in one month, the note rate would only be adjusted
once, on the first business day of the month following the last change.  This
example assumes that the adjustment period had been identified as being
monthly.

On the day of the application, the participating lender must have determined:
(l) the base rate, (2) the spread, (3) the note rate, and (4) the adjustment
period.

EXAMPLE

A lender agrees to request SBA's guaranty of a loan to have a 10-year
maturity.  New York prime on the day the lender submits the application to
SBA is nine percent.  The lender and borrower have agreed that payments will
be calculated at "prime plus 2.50 percent" and that the rate will fluctuate
on a quarterly basis.

The base rate is nine percent; the spread is 2.50 percent; the note rate is
11.50 percent; and the adjustment period is quarterly.  If the New York prime
changes either up or down during any calendar quarter, the note rate will
change by the same amount on the first business day of the calendar quarter
following the quarter in which the change occurred.  The spread stays
constant throughout the term of the loan.  Therefore, while the maximum note
rate at the time this loan was made was 11.75 percent, if prime goes up to 12
percent during the life of the loan, the rate on the note at that time would
go up to 14.75 percent.


ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA or [phone].  For the hearing
impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.SURETY BOND GUARANTEE PROGRAM

THE PROGRAM

The U.S. Small Business Administration (SBA) can guarantee bonds for
contracts up to $1.25 million, covering bid, performance and payment  bonds
for small and emerging contractors who cannot obtain surety bonds through the
regular commercial channels.

ELIGIBILITY

Businesses in the construction and service industries can meet the SBA's size
eligibility standards if their average annual receipts, including those of
their affiliates, for the last three fiscal years do not exceed $3.5 million.
Local SBA offices can answer questions dealing with size standard
eligibility.

TYPES OF ELIGIBLE BONDS

Any contract bond (bid, performance or payment) is eligible for SBA guarantee
if the bond is:

covered by the contracts bonds section of the Surety Association of America
Rating Manual;

    required by the invitation to bid or by the contract; and

    executed by a surety company that is determined by SBA to be eligible to
     participate in the program and is certified acceptable by the U.S.
     Treasury (Circular 570).

Some non-competitive negotiated contracts are eligible if they are in accord
with appropriate federal regulations.
SIZE OF ELIGIBLE CONTRACTS

The SBA can guarantee bonds for contracts up to $1.25 million.

SBA GUARANTEE

The SBA guarantees surety companies against a percentage of losses sustained
on contracts up to $1.25 million in face value.

DUTIES OF CONTRACTOR

Contractors should apply for a specific bond with a surety company of their
choice, providing background, credit and financial information required by
the surety company and the SBA.

The contractor must use the following forms, which are available from the
SBA:

SBA Form 994:  Application for Surety Bond Guarantee Assistance

SBA Form 912:  Statement of Personal History (on first application and once
every two calendar years thereafter)

SBA Form 994F: Schedule of Uncompleted Work on Hand (required initially and
then at least quarterly)

DUTIES OF SURETY COMPANY

After an applicant completes the forms and furnishes the surety company with
sufficient underwriting information, the surety company processes and
underwrites the application in the same manner as any other contract bond
application.  The surety company decides whether to:

-    execute the bond without the SBA's guarantee;

-    execute the bond only with the SBA's guarantee; or

-    decline the bond even with the SBA's guarantee.

If the surety company determines an SBA guarantee is required in order to
provide the bond, it must then complete an SBA Form 994B: Underwriting Review
and the  SBA Form 990: Guarantee Agreement.  These forms -- and supporting
documents -- are submitted along with the 994, 912 and 994F to the
appropriate SBA office.  If the application is for a final bond, the
contractor's guarantee fee check must be attached.

DUTIES OF THE SBA

The SBA determines an applicant's ability to complete the contract based on
the information, documentation and underwriting rationale provided by the
surety company.  If the review establishes performance capacity, and all
other aspects of the application are approved, a duly authorized SBA official
signs a guarantee agreement and returns it to the surety company.  If the
review fails to establish performance capacity, the SBA seeks clarification
from the surety underwriter.  If performance capacity cannot be reasonably
assured, the SBA rejects the application.

COST OF AN SBA
GUARANTEED BOND

The SBA charges fees to both the contractor and the surety company, as
described in the most recent edition of 13 CFR 115:

The small business pays the SBA a guarantee fee of six dollars per thousand
of the contract amount.

When the bond is issued, the small business pays the surety company's bond
premium.  This charge cannot exceed the level approved by the appropriate
state regulatory body.

    The surety company pays the SBA a guarantee fee as determined by the
     SBA.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone].


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.LOANS TO
SMALL GENERAL CONTRACTORS

THE PROGRAM

The U.S. Small Business Administration (SBA) makes regular business loans to
small general contractors to finance construction or renovation of
residential or commercial buildings that will be offered for sale.  These
loans are available only under the guaranty loan program.

ELIGIBILITY

Eligibility rules require construction contractors and homebuilders to have
already demonstrated the managerial and technical ability to build or
renovate projects comparable in size to those for which they are seeking SBA
financing.  In addition, they must qualify as small businesses under the
SBA's size standards and meet the Agency's credit criteria.

AMOUNT

The SBA can guarantee as much as 85 percent of the loan up to $750,000.  The
maximum guaranty for loans up to $155,000 is 90 percent.

TERMS

The loan maturity cannot be more than 36 months plus a reasonable estimate of
the time it takes to complete the construction or renovation.  Principal
repayment may be required in a single payment when the project is sold.
Interest payments, however, are required at least twice a year and must be
paid from the applicant's own resources, not from loan proceeds.

INTEREST RATES

A lender may charge 2.25 percentage points over the New York prime interest
rate.

USE OF PROCEEDS

Loan proceeds can be used only for direct expenses of the project.
Rehabilitation projects also qualify if they are "significant" and if, at the
time of loan application, the estimated costs are equal to or more than a
third of the purchase price or the fair market value of residential or
commercial buildings at the time they are offered for sale.

Loans also can be used to purchase vacant land if the price is no more than
20 percent of the total loan.  Not more than 5 percent of the loan can be
used for streets, curbs and other developmental costs that benefit properties
other than the one being built or rehabilitated.

SPECIAL APPLICATION REQUIREMENTS

In addition to the requirements of SBA's regular business loan program, the
applicant must submit three letters to SBA (or to the participating lender).

One letter must be from a mortgage lender doing business in the area
affirming that permanent mortgage financing for qualified purchasers of
comparable real estate is normally available in the project's area.

Another letter must come from an independently licensed real estate broker
with three years of experience in the project area.  The letter must state
whether a market for the proposed structure exists and whether it is
compatible with other buildings in the neighborhood.

The third letter must be from an independent architect, appraiser or
engineer, confirming availability of construction inspection and
certification at intervals during the project.  This letter writer cannot be
affiliated with the applicant in any way.

The cost of construction inspections must be paid by the applicant and can be
paid from the loan proceeds.

COLLATERAL

Loans for the project must be secured by not less than a second lien.  The
total amount of the first and second liens on a property cannot exceed 80
percent of the contractor's anticipated selling price.  The first lien must
include provisions for transferring clear title to the purchaser of each
parcel.  The SBA will not take a second position in a subdivision that is
subordinate to a lien requiring the entire loan to be paid in full before any
property is released.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone].  For the hearing
impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.

8(a) PARTICIPANT LOANS


The Program

This program provides financial assistance to businesses participating in the
8(a) program.  Loans may be made on a direct basis, or through lending
institutions under SBA's immediate participation or guaranty program.

ELIGIBILITY

Only applicants currently participating in the 8(a) program and therefore
eligible for contractual assistance under that program are eligible.

LOAN AMOUNTS

The maximum SBA guaranty of a loan through a lending institution is $750,000.
Direct and immediate participation loans are limited to an SBA share of
$150,000.

LOAN PROCEEDS

Loan proceeds are to be used within a reasonable time for plant construction,
     conversion or expansion, machinery and equipment, or facilities.  Loan
proceeds to manufacturers may be used for working capital purposes.  For non-
manufacturers working capital loan proceeds are limited to inventory,
supplies, and materials.  No debt payment is permitted.

INTEREST RATES

Interest rates on guaranty loans are set by the lender, not to exceed two and
three quarter percentage points over the New York prime interest rate.  The
interest rate on direct loans will be one percent less than the SBA direct
loan rate, which changes each calendar quarter.

COLLATERAL

Collateral requirements for guaranteed loans are the same as SBA's regular
program.  Generally, collateral is required to the extent it is available and
in value sufficient to secure the loan.  Direct or immediate participation
loans will be subordinate to perfected security interests held by financial
institutions arising from the borrower's past borrowings.  This provision
does not apply to past borrowings from individuals.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone].  For the hearing
impaired, call [phone] (TDD)


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.LOANS FOR VIETNAM-ERA
AND DISABLED VETERANS

THE PROGRAM

Disabled and Vietnam-era veterans who cannot secure business financing on
reasonable terms from private sector or guaranty loan  sources can turn to
the U.S. Small Business Administration (SBA) for direct loans.  Veterans can
use the loans to set up a small business or to operate or expand an existing
small business.  The ceiling on these loans is $150,000.

While all qualified veterans get special consideration when they apply for
SBA assistance, most loans are made by financial institutions and many are
guaranteed by SBA.  When a guaranteed loan or other reasonable credit
financing is available, SBA cannot make a direct loan.

Applicants must meet certain basic credit criteria.  They must, for example,
have sufficient equity in the business and the ability to repay the loan from
business earnings.  Applicants must apply to local financial institutions for
loans in order to show that they cannot get financing on reasonable terms
without SBA assistance.  Applicants must provide evidence that a request for
a loan on the same or similar terms as  those sought from the SBA was
rejected for reasons other than credit factors.

ELIGIBILITY

Vietnam-era veterans are veterans who served for more than 180 days, any
part of which was between August 5, 1964, and May 7, 1975, and were
discharged other than dishonorably.  Disabled veterans are veterans with 30
percent or more compensable disability or veterans with a disability
discharge.

A veteran who meets the above criteria must own at least 51 percent of the
firm, participate in the actual day-to-day operation of the business, show
ability to successfully run a business, show significant capital investment
in the firm, and show that the loan requested is not available   elsewhere.
Loans for investment, rental real estate and gambling are prohibited by law.

INTEREST RATE

The interest rate on Vietnam-era and disabled veteran loans is the same as
the current rate for SBA direct loans, which is adjusted quarterly.

COLLATERAL

The SBA must be satisfied that loans are of sufficiently sound value or
reasonably secured to assure repayment.  Generally, applicants must pledge
available collateral.  The Agency may also require personal guarantees by
principals.

SINGLE LOAN BENEFIT

The veteran status of an individual may only be used one time to qualify for
an SBA loan.  Subsequent loans under this program must be based on 51 percent
minimum ownership by persons with unused eligibility.

ADDITIONAL INFORMATION

Most SBA offices cosponsor training to help veterans make decisions on going
into business, acquaint them with lender requirements and help them determine
what paperwork may be required.

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, international trade and rural
development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA.


All of SBA's programs and services are extended to the public on a
nondiscriminatory basis.
BLACK-OWNED SMALL BUSINESSES

SBA ASSISTANCE

The U.S. Small Business Administration (SBA) provided a total of 518 direct
and guaranteed loans (excluding disaster loans) worth more than $91.1 million
and 1,628 8(a) contracts totaling nearly $1.44 billion to Black-owned firms
in FY 1990.

More than 1,870 Black-owned firms participate in the 8(a) program.  The SBA
also maintains the Procurement Automated Source System (PASS), a computerized
listing of small business contractors seeking government procurements.  More
than 13,430 Black-owned firms are profiled in the system.

CENSUS STATISTICS

According to the latest U.S. Bureau of the Census statistics, there were
424,165 Black-owned businesses in the United States in 1987.  That is a 38
percent increase from the 1982 total of 308,260.  This rate of growth is
nearly three times the rate for all businesses during that time.

In 1987, 49.4 percent of the Black-owned firms were concentrated in the
service industries.  These categories accounted for 31 percent of the gross
receipts.  Retail trade had the next largest concentration with 15.6 percent
of the firms and 29.8 percent of the receipts.

The manufacturing and wholesale trade industries experienced strong growth
among Black-owned firms between 1982 and 1987.   Black-owned manufacturing
firms more than doubled, rising from 3,707 in 1982 to 8,004 in 1987.  The
growth in receipts in this industry was nearly a four-fold increase, from
$345 million in 1982 to just over $1 billion in 1987.  Black-owned firms in
the wholesale trade industry increased from 3,119 businesses in 1982 to 5,519
businesses in 1987, an increase of 77 percent.  Receipts more than
quadrupled, rising from $432 million in 1982 to $1.3 billion in 1987.

The majority of the firms (400,339 or 94.4 percent) owned by Blacks in 1987
operated  as sole proprietorships.  Partnerships accounted for 3.3 percent of
the Black-owned firms, with Subchapter S corporations accounting for three
percent.

Gross receipts in 1987 for Black-owned businesses were $19.8 billion, up from
$9.6 billion in 1982.  Sole proprietorships  accounted for 50.9 percent of
the gross receipts, partnerships for 10 percent, and  Subchapter S
corporations, 39.2 percent.

Almost one-quarter million Americans were employed in Black-owned firms in
1987, up 82 percent from 1982.  The number of Black-owned businesses  with
paid employees rose by 87 percent, from 37,841 in 1982 to 70,815 in 1987.

In 1987, the largest number of Black-owned firms -- 47,728 -- were located in
California, with gross receipts of $2.4 billion.  New York was second with
36,289 firms   and receipts totaling $1.9 billion.

Slightly less than 44 percent of the    Black-owned firms and 44.7 percent of
gross receipts were concentrated in California, Texas, New York, Florida and
Illinois.

The 10 metropolitan areas with the most Black-owned firms in 1987 were:

City # Firms      Receipts
New York  28,063    $1.2 billion
Los Angeles    23,932    $1.3 billion
Wash., D.C.     23,046   $1.0 billion
Chicago   15,374    $0.9 billion
Houston   12,989    $0.4 billion
Atlanta   11,804    $0.7 billion
Philadelphia    10,249   $0.6 billion
Detroit   9,852     $0.5 billion
Baltimore  8,593    $0.3 billion
Dallas    7,857     $0.2 billion

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract and export assistance.  The Agency also offers
specialized assistance to women business owners, other minorities and
veterans.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA.


All of SBA's programs and services are extended to the public on a
nondiscriminatory basis.
HISPANIC-OWNED SMALL BUSINESSES

SBA ASSISTANCE

The U.S. Small Business Administration (SBA) provided a total of 894 direct
and guaranteed loans (excluding disaster loans), totaling 168.3 million to
Hispanic-owned small businesses in the United States and Puerto Rico in FY
1991.

The SBA awards federal contracts through the 8(a) program to eligible
socially and economically disadvantaged firms.  In FY 1991, 1,265 contacts
were let to Hispanic-owned 8(a) firms totaling more than $1.2 billion.  There
are approximately 1,060 Hispanic-owned firms in the United States and Puerto
Rico participating in the 8(a) program.

The SBA also maintains the Procurement Atomated Source System (PASS), a
computerized data base of small business contractors.  The system responds to
requests made by government agencies or major contractors for potential small
business suppliers.  More than 11,605 Hispanic-owned firms are profiled in
the system.

GENERAL information

The most recent data available from the U.S. Bureau of the Census show that
in 1987, there were 422,373 U.S. businesses owned by Hispanic persons, up
from 233,975 in 1982, an increase of 80.5 percent.  The rate of growth is
almost six times the rate for all businesses.  Hispanic firms account for
roughly 3.1 percent of all U.S. businesses.

Hispanic firms were concentrated in the service industries, which accounted
for 43.7 percent of all Hispanic-owned firms.

The industries with the strongest relative growth in both number and receipts
are wholesale trade and manufacturing.  The wholesale trade industry saw a
202 percent increase in the number of businesses, up  from 3,359 in 1982 to
10,154 in 1987.  Receipts grew by 219 percent, from $766.65 million in 1982
to $2.45 billion in 1987.

The majority of firms -- 396,769 (93.9 percent) -- owned by Hispanics in 1987
operated as sole proprietorships.  Partnerships totaled 12,230 or 2.9 percent
of the firms.  Corporations accounted for 3.2 percent of the firms.

Hispanic businesses had gross receipts  of $24.73 billion in 1987, up from
$11.76 billion in 1982.  Sole proprietorships accounted  for 61.3 percent of
the gross receipts;  partnerships, 9.3 percent; and corporations, 29.4
percent.

The Census Bureau data show that between 1982 and 1987, Hispanic-owned
businesses with paid employees more than doubled, rising from 39,272
businesses in 1982 to 82,908 such businesses in 1987.  Hispanic-owned firms
provided jobs for 264,846 Americans in 1987.

Approximately 76 percent of all Hispanic-owned businesses in the U.S. are
located in California, Texas, Florida and New York.  California has the
largest number with 132,212, followed by Texas, 94,754; Florida, 64,413; and
New York, 28,254.

The firms in these states generated about 76 percent of the receipts of all
such businesses in the country in 1987.

The cities with the largest number of Hispanic-owned firms in 1987 were:

City                # Firms        Receipts
Los Angeles         21,819         $1.22 billion
New York            20,945         $1.1 billion
San Antonio         13,405         $580 million
Miami               12,771         $1.29 billion
Houston             10,872         $406 million
Hialeah, Fla.        8,100         $513 million
El Paso              7,399         $415 million
Chicago              5,021         $294 million
San Diego            4,083         $205 million
San Jose             3,609         $166 million

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, other minorities, veterans, international
trade and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, calll [phone] (TDD)


All of SBA's programs and services are extended to the public on a
non-discriminatory basis.

SMALL BUSINESSES OWNED BY ASIANS,
AMERICAN INDIANS AND OTHER MINORITIES


(NOTE:  Black and Hispanic-owned businesses are covered in other SBA fact
sheets.)

THE PROGRAM

The U.S. Small Business Administration (SBA) provided a total of 1,315 direct
and guaranteed loans (excluding disaster loans) in 1991 to small firms owned
by   Asian Americans, American Indians and other minorities in the United
States and Puerto Rico.  The loans were worth $425.6 million.

The SBA awards federal contracts through the 8(a) program to eligible
socially and economically disadvantaged firms.  During FY 1991, 1,458 8(a)
contracts were let to firms owned by Asians, American Indians, and other
minorities.  These contracts were worth $1.04 billion.  There are
approximately 979 such firms in the 8(a) program in the United States and
Puerto Rico.

The SBA maintains the Procurement Automated Source System (PASS), a
computerized database of small business contractors.  PASS responds to
requests made by government agencies or major contractors for potential small
business  suppliers.  More than 15,250 firms owned by the above-named groups
are profiled in PASS.

CENSUS STATISTICS

According to the 1987 Economic Census, there were 376,711 firms in the United
States owned by Asians, American Indians and other minorities.

Firms owned by these groups had gross   receipts of $34 billion.  Sixty-eight
percent of these firms were concentrated in California, Hawaii, Texas, New
York and Illinois.

The majority of these firms operated as sole proprietorships: 340,615, or
90.4 percent.  They accounted for 62.4 percent of the gross receipts.  Of the
total number of firms owned by Asians, American Indians and other minorities,
5.1 percent, or 19,261, were partnerships, accounting for 12.4 percent of the
gross receipts.  Only 4.5 percent were  corporations, but they collected 25.1
percent of the gross receipts.

More than 70 percent of all firms owned by Asians, American Indians and other
minorities were concentrated in the services and retail trade industry
divisions.  The 1987 Census data show that the two largest major industry
groups were business services, with 48,598 firms, and personal services with
38,111 firms.

California led the way with the largest number of businesses, 147,633 and
gross receipts of $14.8  billion.  New York was second with 36,257 firms,
reporting $3.2 billion in gross receipts.

The metropolitan areas with the         largest number of firms owned by
Asian Americans, American Indians and other minorities in 1987 were:

City           # Firms        Receipts
Los Angeles    63,139         $ 6.9  billion
New York       29,248         $ 2.4  billion
Honolulu       24,452         $ 1.3  billion
San Francisco  17,260         $ 1.7  billion
Anaheim-
 Santa Ana     15,407         $ 1.4  billion
Chicago        12,593         $ 1.2  billion
Oakland        12,011         $ 1.1  billion
Wash., DC      11,693         $925 million
San Jose       11,566         $993 million
Houston         8,777         $805 million


ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, other minorities, veterans, international
trade and rural development.

The SBA has offices located around the country.  For the one nearest you,
check the telephone directory under U.S. Government or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a
non-discriminatory basis.
HANDICAPPED ASSISTANCE LOANS


THE PROGRAM

Handicapped individuals and public or private non-profit organizations for
the employment of the handicapped can get U.S. Small Business Administration
(SBA) financing for starting, acquiring or operating a small business.  The
loans are available under the Handicapped Assistance Loan Program.

ELIGIBILITY

Public or Private Non-profit Organizations (HAL-1)

Financial assistance is available to state- and federal-chartered
organizations that operate in the interest of handicapped individuals.
Eligibility rules specify that the applying organization's net income cannot
benefit any stockholder or other individual, and that at least 75 percent of
the direct work involved must be done by handicapped persons.

To establish HAL-1 eligibility, applicants must provide evidence that the
business is operated in the interest of handicapped individuals.  The
evidence may consist of copies of by-laws, incorporation papers,
certification of tax-exempt status as determined by the Internal Revenue
Service, or recognition and approval by the U.S. Secretary of Labor or a
state vocational rehabilitation agency.

Handicapped Individuals (HAL-2)

To be eligible for loans under the HAL-2 program, handicapped individuals
must provide evidence of the following:

Their business is a for-profit operation and qualifies as small under the
SBA's size standard criteria.  Loans cannot be made to businesses involved in
creating or distributing ideas or opinions -- such as newspapers, magazines
and academic schools -- or businesses engaged in speculation or investment in
rental real estate.

The business must be 100 percent owned by one or more handicapped
individuals.  A handicapped individual is a person who has a permanent
physical, mental, or emotional impairment, defect, ailment, disease or major
disability.  Applicants must show that their disability keeps them from
competing on a par with non-handicapped competitors.

The handicapped owner(s) must actively participate in managing the business.
Applications that propose absentee ownership are not eligible.

Whether the business is organized as a proprietorship, a partnership or a
corporation is not a determining factor with respect to eligibility as a
small business.

AMOUNT, TERMS AND INTEREST RATES

The SBA can guarantee up to $750,000 of a loan made by a private lending
institution.  Direct loans from the SBA are limited to $150,000.  Interest
rates on direct loans are three percent per year.  Interest rates on
guaranteed loans are set by the private lending institution and must be
legal, reasonable and within a maximum allowable rate established by SBA.
No direct loan can be approved if a guaranteed loan is available.

The SBA will not provide financial assistance if funds are otherwise
available from the applicant's own resources, from a private lending
institution or through financing by a government entity other than the SBA.

HAL-1 loan proceeds may be used for most business purposes.  They may not be
used for supportive services.

Supportive services refers to expenses incurred by HAL-1 organizations to
subsidize wages of low producers, health and rehabilitation services,
management, training, education and housing of handicapped workers and other
such uses.

BASIS FOR LOAN APPROVAL

Nonprofit organizations must have the capability and experience to
successfully produce or provide marketable goods and services.

An evaluation of the experience, competency and ability of the owners and
operators of the small business must indicate that they can operate it
successfully and can repay the loan from business earnings.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans,international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone] (TDD)


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.INTERNATIONAL TRADE LOAN PROGRAM

THE PROGRAM

The International Trade Loan Program helps small businesses that are engaged
or preparing to engage in international trade, as well as small businesses
adversely affected by competition from imports.  Loans are made by lending
institutions with the U.S. Small Business Administration (SBA) guaranteeing
a portion of the loan.

ELIGIBILITY

The applicant must establish either of the following:

The loan proceeds will significantly expand existing export markets or
develop new export markets.  The applicant must submit a business plan,
including sufficient information to reasonably support the likelihood of
expanded export sales.  The plan must include both a profit and loss
projection and a narrative rationale.

The applicant is adversely affected by import competition.  Injury
attributable to increased competition with foreign firms must be
demonstrated.  A narrative explanation and financial statements must show
that directly competitive imported products have made an important
contribution to a decline in the firm's competitive position.  This can be
demonstrated by factors such as a  decline in sales, production, and
underutilization of capacity, decreased profitability, or the threat of (or
actual) loss of production employees.

AMOUNT OF LOAN

The SBA can guarantee up to $1.25 million, less the amount of SBA's
guaranteed portion of other loans outstanding to the borrower under the SBA's
regular lending program. The SBA's guaranteed portion of loans for facilities
and equipment is limited      to $1 million, and SBA's share of loans for
working capital is limited to $250,000.      The working capital portion of
the loan will be administered according to the provisions   of the SBA's
Export Revolving Line of Credit (ERLC).

USE OF PROCEEDS

Proceeds may be used for:

Working capital.

Facilities or equipment, including purchasing land and building(s); building
new  facilities; renovating, improving or    expanding existing facilities;
purchasing or reconditioning machinery, equipment, and fixtures; and making
other improvements that will be used within the United States for producing
goods or services.

Proceeds may not be used for debt payment.

COLLATERAL

Only collateral located in the United States (including its territories and
possessions) is acceptable for a loan made under this program.  The lender
must take a first lien position (or first mortgage) on the items financed
under this section.  Additional supportive collateral may be required as
appropriate, including personal guaranties, subordinate liens or items which
are not financed by loan proceeds.

MATURITY

Maturities of loans for facilities or equipment may extend to the 25-year
maximum applicable to most SBA loan programs.  The working capital portion of
loans, under ERLC provisions, have a three-year maturity.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory       services, publications,
financial programs and contract assistance.  The Agency also offers
specialized programs for women, minorities, veterans and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA.


All of SBA's programs and services are extended to the public on a
nondiscriminatory basis.CONTRACT LOAN
PROGRAM



THE PROGRAM

The Contract Loan Program (COL) is a short-term line of credit designed to
finance the estimated costs of labor and materials needed to perform a
specific contract.  The loans are guaranteed by the U.S. Small Business
Administration (SBA) and do not allow revolving account access to funds
guaranteed by the Agency.

These loans are available only under SBA's guaranty program. Eligible
businesses may have more than one COL outstanding at any given time as long
as SBA's total exposure does not exceed $750,000.

ELIGIBILITY

To be eligible, a business must be for-profit and qualify as small under the
SBA's size standard criteria, with an exception for sheltered workshops under
the Handicapped Assistance Loan Program.  Businesses involved in creating or
distributing ideas or opinions -- such as newspapers, magazines, and academic
schools -- and businesses engaged in speculation or investment in rental real
estate are not eligible.

Also, the business must have been in continuous operation for 12 months
immediately preceding the application date.

Contractors and subcontractors in the construction, manufacturing and service
industries may apply.  Applicants must provide a specific product or service
under an assignable contract.  The program is not intended to provide money
to finance receivables or inventory on-hand.

AMOUNT, TERMS AND INTEREST RATES

SBA can guarantee as much as 85 percent of the loan up to $750,000.  For
loans up to $155,000, the maximum guaranty is 90 percent.  Under the program,
loan maturity usually will be 12 months or less from the date of the first
disbursement by the SBA.  For larger contracts, the Agency may permit loan
maturities of up to 18 months.  Any request for any maturity longer than 18
months requires special approval from the director of the SBA Loan Policy and
Procedures Branch.

COLLATERAL

Collateral includes an assignment of contract proceeds, although the Agency
usually requires a pledge of outside assets and secured personal guaranties.

TAX REQUIREMENTS

All applicants must be current on payroll taxes and provide a depository plan
for payment of future withholding taxes.

Special Program Requirements

Applicants must submit a proposed schedule of draws against the loan and
payments on it.  They must also submit a projected cash flow for all business
operations over the term of the contract and the loan.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For hearing
impaired, call [phone].


All of SBA's programs and services are extended to the public on a non-
discriminatory basis.



SEASONAL
LINE OF CREDIT PROGRAM


THE PROGRAM

The Seasonal Line of Credit Program offers short-term loans to help small
businesses get past cash crunches attributable to seasonal changes in
business volume.  The loans are guaranteed by the U.S. Small Business
Administration (SBA) and are used to finance increases in trading assets,
such as receivables and inventory, required as a result of seasonal upswings
in business.  These loans are available only under the guaranty loan program.

ELIGIBILITY
Eligible businesses must be for-profit operations.  They also must qualify as
small according to the criteria set by the SBA's size standards, although an
exception is provided for sheltered workshops qualifying under the
Handicapped Assistance Loan Program.  Loans cannot be made to businesses
involved in the creation or distribution of ideas or opinions -- such as
newspapers, magazines, and academic schools -- or those engaged in
speculation or investment in rental real estate.

In addition, businesses must have been in operation continuously for one year
immediately preceding the application date.  They also must have established
a definite pattern of seasonal activity.

Applicants who are eligible under the Contract Loan Program are not eligible
under this loan program.

AMOUNT OF LOAN

The SBA can guarantee as much as 85 percent of the loan up to $750,000.  For
loans of up to $155,000, the Agency can guarantee up to 90 percent of the
principal.  The loan amount is determined by the increased working capital
needed to meet the seasonal increase in business.

MATURITY

The term of the Seasonal Line of Credit loan cannot be more than 12 months
from the date of the SBA's first disbursement.

Only one Seasonal Line of Credit loan can be outstanding at any one time and
each loan must be followed by an out-of-debt period of at least 30 days.
These restrictions do not apply to agricultural enterprises.

COLLATERAL

The collateral required for the loans is primarily liens on all inventory and
          accounts receivable.  Additional collateral, including the pledge
of outside assets and personal guaranties, also may be required.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a non-
discriminatory basis. SOLAR ENERGY
AND CONSERVATION LOAN PROGRAM


THE PROGRAM

Small firms in the energy conservation business can get financial help under
the U.S. Small Business Administration's Small Business Solar Energy and
Conservation Loan Program.

Financing is available for small businesses engaged in engineering,
manufacturing, distributing, marketing, installing or servicing products or
services designed to conserve the nation's energy resources.

Loans can also be used to buy land for plant construction; convert or expand
existing facilities; purchase machinery, equipment, furniture, fixtures,
facilities, supplies and materials; or provide working capital for entry or
expansion into eligible conservation project areas.

Firms installing or undertaking energy conservation measures in their own
plants or offices are not eligible under this program, although they can
apply for financing under the SBA's regular business loan program.

Up to 30 percent of loan proceeds can be used for research and development if
the business plan shows strong repayment ability or when a product or service
already being marketed needs further development.

ELIGIBILITY

Small firms engaged in the following energy production or conservation
activities are eligible:

Wind energy conversion equipment;

Solar thermal energy equipment;

Photovoltaic cells and related equipment;

Hydroelectric power equipment;

Equipment primarily used to produce energy from wood, biological waste, grain
or other biomass sources;

Equipment for industrial cogeneration of energy, heating or production of
energy for industrial waste;

Products or services that use devices that increase the energy efficiency of
existing equipment, or improve operation of systems that use fossil fuels and
are on the Energy Conservation Measures List of the Secretary of Energy or
approved by the SBA.  These include insulation procedures and procedures
involving heating, cooling and lighting in residential, commercial and
industrial buildings; and

Engineering, architectural, consulting or other professional services that
are necessary or appropriate to help citizens use any of the conservation
resources described above.

AMOUNT, TERMS AND
INTEREST RATES

An SBA loan guaranty can cover up to 85 percent of loans up to $750,000.  The
maximum guaranty for loans up to $155,000 is 90 percent.  Both direct and
immediate participation (IP) loans, when funds are available, are limited to
$150,000 of SBA participation.

The maturity of a Small Business Energy Loan is set according to the
borrower's ability to repay and the proposed use of proceeds.  The maximum
maturity is 25 years, but maturities of that length are used to finance fixed
assets.  Lenders may charge 2.25 or 2.75 percentage points above the New York
prime rate, depending on the maturity of the loan.

COLLATERAL

Applicants must pledge adequate collateral and provide personal guaranties if
required by the Agency.  Refusal to pledge available collateral may be
sufficient reason for declining the loan.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA.


All of SBA's programs and services are extended to the public on a
nondiscriminatory basis.



  ╔════════════╗
  ║  SECONDARY ║
  ║  MARKET    ║
  ║  PROGRAM   ║
  ╚════════════╝
     THE PROGRAM

     Lenders who hold business loans
     guaranteed by the U.S. Small Business
     Administration (SBA) may be able
     to profit by selling the guaranteed
     portions of those loans in the active
     secondary market. Banks, savings
     and loan associations, credit unions,
     pension funds and insurance compa-
     nies are frequent buyers.

     U.S. Small Business
     Administration





  ╔════════════════════════════╗
  ║  WHY WOULD I WANT TO SELL  ║
  ║  MY LOANS?                 ║
  ╚════════════════════════════╝
     Lenders sell loans to improve liquidity
     and profits.

  ╔════════════╗
  ║  LIQUIDITY ║
  ╚════════════╝
     The SBA guarantee can be converted
     to cash, and the whole process can be
     completed in as little as two weeks.
     The lender and buyer sign an agreement
     describing the rights and responsibilities of
     both parties (SBA Form 1086, Secondary
     Participation Guarantee and Certification
     Agreement). This agreement is sent to the
     fiscal and transfer agent (FTA), who
     reviews the documents for completeness and
     contacts both parties to arrange a settlement.

     On the settlement date, the buyer wires
     money to the FTA. The FTA receives the
     money, issues a certificate to the buyer and
     wires the money to the seller.



  ╔═════════════╗
  ║  PROFITS    ║
  ╚═════════════╝
     The profits from selling a loan come
     from three areas: a premium at the time of
     sale, a servicing fee during the life of the
     loan, and the float on the borrower' s loan
     payment. Variable rate SBA loans usually
     sell at a premium. The premium varies
     with market conditions and the servicing
     fee retained by the lender. SBA requires
     that an originating lender retain a servicing
     fee of at least one percent, although they are
     free to retain a larger fee. This fee consists
     of the cash flow from the portion of the loan
     retained by the lender to cover the cost of
     borrower visits, financial statement analysis,
     and other items necessary to service small
     business loans. The payment flow from the
     borrower to the investor allows the lender to
     hold the loan payment until the end of the
     month in which it was received. If the
     borrower pays at the beginning of each
     month, the lender receives about one month's
     float on each payment. This additional float
     increases the yield.

     For example, assume that a $100,000,
     90 percent guaranteed loan with a 10.5
     percent note rate and a seven-year maturity is
     sold to an investor at a net coupon rate of
     8.375 percent, and that the lender retains a
     two percent servicing fee. (The remaining
     0.125 percent is the FTA fee.)

     The borrower's payment date is the first
     of each month. The approximate first year
     cash flow to the lender would be $1,050 (10.5
     percent) on the $10,000 unguaranteed portion
     and $1,800 (two percent) on the $90,000
     guaranteed portion, for a total of $2,850.

     In addition, the $1,357 float that must be
     paid to the FTA each month would earn six
     percent, about $80 per year. Applied to the
     $10,000 investment of the lender, the gross
     yield before servicing expenses is almost 30
     percent. The gross yield is further increased
     by any premium received because the
     premium will lower the lender's investment in
     the loan.




  ╔═══════════════════════════╗
  ║  HOW BIG IS THE SECONDARY ║
  ║  MARKET?                  ║
  ╚═══════════════════════════╝
     About $1.7 billion in new loans enter
     the secondary market each year. An
     additional $1.0 billion of previously sold
     loans are traded.

  ╔═════════════════════╗
  ║  HOW DO I GO ABOUT  ║
  ║  SELLING MY LOANS?  ║
  ╚═════════════════════╝
     While there is no requirement that a
     broker/dealer be used, a good first step is
     to call a few and get price quotes. These
     people are familiar with the paperwork
     and the selling process and make a market
     in the securities. After the deal is made,
     SBA Form 1086 is signed by all parties
     and, along with other required documents,
     is sent to the fiscal and transfer agent.
     The SBA has a list of broker/dealers and
     other entities that have been approved as
     loan pool assemblers.



  ╔════════════════════════╗
  ║  WHAT DOCUMENTATION IS ║
  ║  NEEDED?               ║
  ╚════════════════════════╝
     The sale is accomplished on SBA
     Form 1086, Secondary Participation
     Guarantee and Certification Agree-
     ment. A copy of the Note (SBA Form
     147) also is required.

  ╔════════════════════╗
  ║  WHAT ARE MY       ║
  ║  RESPONSIBILITIES  ║
  ║  AFTER THE SALE?   ║
  ╚════════════════════╝
     The lender remains responsible for all
     loan servicing activities. After the sale, the
     lender must forward the borrower's monthly
     payment to the FTA, along with a complete
     accounting of the funds (using SBA Form
     1502, Standard Remittance Form).
     Furthermore, with the exception of one
     three-month payment deferment, any servic-
     ing action that would affect the payment
     flow must be approved by the investor
     before implementation.




  ╔═════════════════════╗
  ║  WHAT ARE THE       ║
  ║  RESPONSIBILITIES   ║
  ║  OF THE FTA?        ║
  ╚═════════════════════╝
     The Secondary Market Improvements
     Act of 1984 requires central registration of
     all transactions. The FTA facilitates the set-
     tlement of the first sale of a loan. On all
     subsequent sales, the buyer gives the money
     directly to the seller who in return gives the
     buyer the certificate. The new owner must
     forward the certificate to the FTA so that a
     new certificate can be issued in his or her
     name, and the sale can be recorded on the
     FTA's books. The FTA also receives bor-
     rower payments from lenders each month
     and forwards them to investors.

     The FTA eliminates the need for lenders
     to keep track of the owners of the loans and
     permits lenders to write just one check each
     month to cover all loans that have been sold.
     From the investor's standpoint, the FTA

     keeps track of which lenders made a monthly
     payment, sends one check to the investor and
     includes an accounting of the funds. The
     also forwards all servicing requests from
     lenders to investors and forwards the response
     to the lender.




   ╔════════════════════════╗
   ║ ADDITIONAL INFORMATION ║
   ╚════════════════════════╝
     For further information, please write to the
     Office of Secondary Market Activities, SBA,
     409 - 3rd Street, S.W., 8th Floor, Washington,
     D.C. 20416, or call 202/205-6493.

     The SBA has a number of programs and
     services available. They include training and
     educational programs, advisory services,

     publications, financial programs and contract
     assistance. The Agency also offers special-
     ized programs for women business owners,
     minorities, veterans, international trade and
     rural development.

     The SBA has offices located around the
     country. For the one nearest you, consult the
     telephone directory under U.S. Government,
     or call the Small Business Answer Desk at
     1-800-U ASK SBA.

     All of SBA's programs and services are extended to the
     public on a nondiscriminatory basis.SECTION 504 CERTIFIED DEVELOPMENT COMPANY PROGRAM


the Program

The U.S. Small Business Administration (SBA) provides long-term financing to
small businesses through its Certified Development Company Program.  The
program makes loans available for acquiring land, buildings, machinery and
equipment, and for building, modernizing, renovating or restoring existing
facilities and sites.

WHAT IS A 504 CERTIFIED DEVELOPMENT COMPANY?

A Certified Development Company (CDC) is a private, public sector nonprofit
corporation that is set up to contribute to the economic development of its
community or region.  It must:

Operate in a defined area;

Be composed of 25 or more members who are geographically representative of
the CDC's area of operation and who include representatives from government
agencies in the area of operation, private sector lending institutions,
businesses and community organizations;

Provide a full-time professional staff who can market the program and
process, close and service its loan portfolio;

Have the ability to sustain its operations on a continuous basis from
reliable sources of funds;

Have five or more directors who meet quarterly.  At least one director must
have commercial lending experience; and

Have incorporated within its bylaws and articles that its chief purpose is to
"promote and assist the growth and development of business concerns in its
operation area."

A CDC is responsible for assisting at least two small businesses a year,
injecting 10 percent of the funds necessary to complete each project, and
ensuring that the debentures are correctly closed and secured.  It must
maintain a place of business that is open to the public during business hours
and listed under a separate phone number.  The CDC is also responsible for
submitting an annual report containing financial statements, management
information, a full activity report and an analysis of its assistance to
small businesses.

HOW DOES A CDC WORK?

CDCs can sell 100 percent SBA-guaranteed debentures to private investors in
amounts up to 40 percent of a project or $750,000, whichever is less (in some
cases, the maximum SBA portion may be $1 million).  In addition, a CDC's
portfolio must create or retain one job for every $35,000 worth of debenture
financing.

Debenture proceeds must be used for permanent financing.  Interim financing
may be required in order to bridge the gap between the loan approval date and
receipt of funding from the debentures.

A typical finance structure for a CDC project would include a first mortgage
from a private sector lender covering 50 percent of the cost, a second
mortgage from the CDC (100 percent SBA-guaranteed debenture) covering 40
percent, and a contribution of at least 10 percent by either the CDC or the
small business being helped.


AMOUNT of Loan

Although the total size of projects using CDC financing is unlimited, the
maximum amount of CDC participation in any individual project is $750,000 (or
$1 million for some projects).  Typical projects range in size from $500,000
to $2 million.  The average is about $1 million.

The minimum amount of CDC participation is $50,000.  A $25,000 debenture may
be approved in special cases.

USE OF PROCEEDS

Proceeds may be used for the following fixed asset projects:

Purchasing existing buildings;

Purchasing land and land improvements such as grading, street improvements,
utilities, parking lots and landscaping;

Construction;

Modernizing, renovating or converting existing facilities;

Purchasing machinery and equipment;

Financing a construction contingency fund, which cannot exceed 10 percent of
total construction costs;

Paying interest on interim financing; and

Paying professional fees directly attributable to the project, such as
surveying, engineering, architectural, appraisal, legal and accounting fees.

Terms

Interest rates are based on the current market rate for 5- and 10-year U.S.
Treasury issues, plus an increment above the Treasury rate, based on market
conditions.  Maturities of 10 and 20 years are available.  Repayment is made
in monthly, level-debt installments.

Collateral may include a mortgage on the land and the building being
financed; liens on machinery, equipment and fixtures, and lease assignments.
Private sector lenders are secured by a first lien on the project.  The SBA
is secured by a second lien.

The Agency also requires personal guarantees from all persons who own 20
percent or more of a company that is financed by a CDC.

FEES

SBA regulations specify limits on fees that must be paid in connection with
SBA funding.  The development company fee cannot exceed the 1.5 percent
processing fee on the SBA's debenture and a monthly service fee of not less
than 0.5 percent nor more than 2.0 percent per annum on the unpaid debenture
balance.  Development company legal fees related to loan closing cannot
exceed $2,500 without prior approval by the SBA.

A funding fee of 0.25 percent to cover the cost of public issuance of
securities and a reserve deposit of 0.5 percent are required, as is an
underwriting fee of 0.625 percent of the total debenture amount.

ELIGIBility

An eligible business must be a for-profit corporation, partnership or
proprietorship.  The business' net worth cannot exceed $6 million, and
average net profit after taxes cannot exceed $2 million for the previous two
years.

CDC investment funds cannot be used for working capital or inventory,
consolidating or repaying debt, refinancing, or financing a plant not located
in the U.S. or its possessions.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The Agency also offers specialized
programs for women business owners, minorities, veterans, international trade
and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA.


All of SBA's programs and services are extended to the public on a
nondiscriminatory basis.GUARANTEED LOANS
TO QUALIFIED EMPLOYEE TRUSTS



THE PROGRAM

The U.S. Small Business Administration (SBA) provides financial assistance to
eligible  employee trusts for two purposes:  to allow the trust to reloan
funds to  the employer company for growth and development or to permit the
employees to purchase the employer company.

ELIGIBILITY

The employee trust must be part of a plan sponsored by the employer company
and qualified under regulations set by  either the Internal Revenue Service
Code (as an Employee Stock Ownership Plan or ESOP), or the Department of
Labor (the Employee Retirement Income Security Act or ERISA).

Applicants covered by the ERISA regulations must also secure an exemption
from Department of Labor (DOL) regulations prohibiting certain loan
transactions.

The SBA requires that the employee trust must:

    Exist at the time of application;

    Be maintained by the employer concern;

    Include at least 51 percent of all employees of the employer concern;

    Have as its primary purpose lending to or investing in the employer
     concern;

    Provide that participating employees may direct the trust on how to vote
     employer securities allocated to the employee's account; and

    Provide written evidence that the trust has been qualified either as an
     ESOP or as an ERISA with the necessary  DOL exemption.

In addition to those eligibility requirements, the employer company must
qualify as small under the SBA size standards and meet the other eligibility
criteria applicable to all SBA loans.

USE OF PROCEEDS

The employer concern must agree to use SBA loan proceeds it receives from the
employee trust solely for the following purposes:

    Growth and Development Loans, in which the trust reloans the proceeds to
     the employer (by the purchase of qualifying employer securities but not
     necessarily voting stock).  The employer can use  these funds for a
     variety of worthwhile business purposes, including working capital,
     expansion, plant construction or purchase of equipment.
    Change of Ownership Loans, in which employees acquire a controlling
     interest  in the employer company.  Voting control (a minimum of 51
     percent ownership) must be acquired with loan proceeds and pass to the
     employees no later than the loan repayment date.

AMOUNT OF LOAN

SBA can guarantee up to $750,000 to any one borrower.  The maximum
includes the total SBA loan exposure in the trust, plus any other SBA loan
outstanding to the employer or its affiliates.

REPAYMENT ABILITY

The SBA determines whether the company can repay the loan by evaluating
whether it can generate sufficient cash flow to meet repayment obligations
and the other fixed obligations of the business.  The employer company must
agree to provide the necessary funds to repay loan principal and interest.

MATURITY

The loan maturity depends on the employer company's ability to repay, subject
to the requirements of prudent lending practices and the SBA's regulatory
maximums.  Machinery and equipment cannot be financed for periods longer than
its conservative economic life.  Real estate and construction loan
maturities generally cannot exceed 25 years. Working capital maturities
generally cannot exceed seven years.

INTEREST RATES

Interest rates are set through negotiations between the applicant and the
participating lender, subject to maximums specified by SBA.  For maturities
of less than seven years, the interest rate may not exceed  2.25 percentage
points above the New York prime rate.

For maturities of seven years or more, the interest rate cannot exceed 2.75
percentage points above the prime rate.  Variable rate loans are permitted.

HOW TO APPLY

Loans under this program are available only under SBA's guaranty plan.
Prospective applicants should review their financing needs with their banks.

COLLATERAL

The assets of the employer company will be the primary collateral.
Principals of the company who are not participating in the employee trust may
be asked to guarantee growth and development loans.  Personal guaranties of
employee trust participants are not required.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training  and educational programs, advisory services, publications,
financial programs and contract assistance.  The agency also offers
specialized programs for women business owners, minorities, veterans,
international trade and rural development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at  1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a
non-discriminatory basis.

The SBA does not discriminate against applicants or recipients on the basis
of race, color, religion, sex, age, marital status, handicap or national
origin.
EXPORT REVOLVING
LINE OF CREDIT LOAN PROGRAM

THE PROGRAM

The U.S. Small Business Administration's (SBA) Export Revolving Line of
Credit Program (ERLC) is designed to help small businesses obtain short-term
financing to sell their products and services abroad.  The program guarantees
repayment to a lender in the event an exporter defaults.  By reducing a
lender's risks, the ERLC provides an incentive for lenders to finance small
business exporters' working capital needs.  The ERLC protects only the lender
from default by the exporter; it does not cover the exporter should a foreign
buyer default on payment.  Lenders and exporters must determine whether
foreign receivables need credit risk protection.

ELIGIBILITY

Applicants must qualify as small businesses under the SBA's size standards
and meet the other eligibility criteria applicable to all SBA loans.
Applicants must also have been in business for at least one year before
filing an application.  Applicants must be current on all payroll taxes and
have an operating depository  plan to ensure payment of future withholding
taxes.

USE OF PROCEEDS

Loan proceeds can be used only to finance labor and materials needed for
manufacturing, to purchase goods or services for export, to develop foreign
markets or to finance foreign accounts receivable.

If the primary purpose is to develop or penetrate foreign markets, a
traditional SBA 7(a) guaranteed loan may be more appropriate.

Funds may not be used to pay existing obligations or to purchase fixed
assets, although other SBA programs can be used for these purposes.

AMOUNT OF LOAN

The SBA can guarantee 85 percent of the loan up to a limit of $750,000.  The
maximum guaranty for loans up to $155,000 is 90 percent.  Applicants can have
other SBA loans in addition to an ERLC, but the SBA cannot guarantee more
than $750,000 in loans to any one borrower, unless the borrower has also
secured an international trade loan.  In that case, the limit is $1 million,
plus $250,000 in working capital.  The loan amount also can increase if a
co-guaranty is secured from the Export-Import Bank of the United States.

MATURITY

ERLC loan maturity is based on the applicant's business cycle, but cannot --
together with all renewals -- exceed 36 months.  Maturities are usually for
one year with options to renew at the discretion of SBA and the lender.
Requests for renewals must be made through the lender not more than 45 nor
less than 30 days prior to maturity.  They must be accompanied by current
financial data and an additional guaranty fee.
INTEREST RATES

Interest rates are set through negotiations between the applicant and the
participating lender, subject to maximums specified by SBA.

FEES

Guaranty fees must be paid to SBA as follows:

    For maturities of 12 months or less, the fee is 0.25 percent of the
     guaranteed portion of the loan.

    For each renewal of 12 months or less, the fee is 0.25 percent of the
     guaranteed portion of the original loan amount.

    For maturities exceeding 12 months, the fee is 2 percent of the
     guaranteed portion of the loan, and no additional fees are needed to
     obtain renewals.

Initial guaranty fees must be paid by the lender but may be charged to the
borrower upon approval of the ERLC by SBA.  Additional guaranty fees are paid
by the borrower at the time a renewal is requested.

Lenders may charge a commitment fee equal to 0.25 percent of the loan amount
($200 minimum).  This fee cannot be levied until SBA approves the ERLC.  In
addition, the normal fees permitted on all SBA loans may also be assessed on
ERLC loans.

COLLATERAL

Collateral may include accounts receivable, inventory, assignment of contract
proceeds, bank letters of credit, and appropriate personal guarantees.  Only
collateral that is located in the United States, its territories and
possessions, or other assets under the jurisdiction of U.S. Courts is
acceptable (receivables generated from sales to foreign buyers are considered
domestic assets for ERLC purposes).

SPECIAL PROGRAM
REQUIREMENTS

Applicants must submit a cash flow projection showing anticipated monthly
activity and cash balances for the entire term of the ERLC.  After the SBA
approves the ERLC, borrowers must also submit monthly progress reports to the
lender.

ERLC loans are available only under SBA's guaranty program.  Prospective
applicants should review their export financing with their lenders.
Applicants should request that lenders seek SBA participation if the lender
is unable or unwilling to make the loan directly.

ADDITIONAL INFORMATION

The SBA has a number of programs and services available.  They include
training and educational programs, advisory services, publications, financial
programs and contract assistance.  The agency also offers specialized
programs for women, minorities, veterans, international trade and rural
development.

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-U ASK SBA or [phone] (FAX).  For the
hearing impaired, call [phone].


All of SBA's programs and services are extended to the public on a
non-discriminatory basis.
CERTIFIED AND PREFERRED LENDERS

╔═════════════════════════════════════════╗
║ SBA BUSINESS LOAN GUARANTEES            ║
╚═════════════════════════════════════════╝
The U.S. Small Business Administration (SBA) has been
guaranteeing loans to small businesses since its creation
by Congress in 1953.  These guarantees cover up to 90
percent of the loan value and allow entrepreneurs to get
credit that otherwise would not be available on reasonable
terms and conditions.

Most lenders who participate in SBA loans do so through the
7(a) program, which requires a thorough analysis of loan
applications and a decision by SBA staff.  It takes about
two weeks to process a request, but that can vary according
to the completeness and complexity of the application.
About 8,000 lenders have made at least one SBA loan in the
past five years.

╔═════════════════════════════════════════╗
║ CERTIFIED LENDERS PROGRAM (CLP)         ║
╚═════════════════════════════════════════╝
Lenders who are more heavily involved in the SBA guaranty
program and who meet the Agency's criteria can participate
through the Certified Lenders Program.

Certified lenders get a partial delegation of authority
that allows the local SBA office to process loan guaranty
applications in three days, assuming everything is in
proper order.

There are about 600 certified lenders across the country.
About 25 percent of all business loan guarantees are made
through the CLP process.  CLP lenders also follow regular
processing procedures in some cases.

╔═════════════════════════════════════════╗
║ PREFERRED LENDERS PROGRAM (PLP)         ║
╚═════════════════════════════════════════╝
The SBA delegates wider authority to lenders who
participate in the Preferred Lenders Program.  PLP lenders
can commit the Agency to guarantee eligible business loans,
and decide the level of SBA participation up to the 80
percent limit.  The program is meant to reduce processing
time on strong credit applications and to use the resources
of the SBA's best lenders to the maximum.

Such a wide delegation of authority is permitted under
Section 7(a)(2) of the Small Business Act, which authorizes
the Agency to permit certain lending institutions to
determine eligibility, creditworthiness, loan structuring,
loan monitoring, loan collection/servicing and loan
liquidation actions, and to make necessary decisions at
each stage of the guaranteed loan application process
without, in most instances, the SBA's prior review or
consent.

PLP loans have a maximum SBA guaranty of 80 percent.  The
lower maximum guaranty requires lenders to accept more of
the lending risks in exchange for giving them the
unilateral right to put government funds at risk.  Despite
the greater risks, lending institutions like the PLP
because it lets them offer faster service to their most
credit-worthy clients.

The Agency examines the PLP lender's SBA portfolio
periodically to ensure it meets SBA requirements.  A
lender's PLP authority must be renewed every two years.

There are 160 preferred lenders.  About 15 percent of all
business loan guarantees are made through the PLP process.
PLP lenders also follow regular and CLP processing
procedures in some cases.

╔═════════════════════════════════════════╗
║ PROGRAM BENEFITS                        ║
╚═════════════════════════════════════════╝
Everyone -- lenders, borrowers and the SBA -- benefits from
the Certified Lender and Preferred Lender programs.  The
expert lenders who participate now account for 60 percent
of all 7(a) loan guarantees.

These programs are part of an effort by the SBA to switch
from retailing its services to wholesaling.  Loan guaranty
activity by certified and preferred lenders requires less
staff time and paperwork by the SBA, allowing Agency staff
to handle a greater volume of loan applications.  At the
same time, it gives them more time and resources to deal
with portfolio management and other Agency
responsibilities.

╔═════════════════════════════════════════╗
║ ADDITIONAL INFORMATION                  ║
╚═════════════════════════════════════════╝
The SBA has a number of programs and services available.
They include training and educational programs, advisory
services, publications, financial programs and contract
assistance.  The Agency also offers specialized programs
for women business owners, minorities, veterans,
international trade and rural development.

Interested borrowers or financial institutions can contact
the SBA Office of Financial Institutions at 409 Third
Street, SW.,  Washington, DC  20416, or call their local
SBA office.  The SBA has offices located around the
country.  For the one nearest you, consult the telephone
directory under U.S.
Government, or call the Small Business Answer Desk at
1-800-U ASK SBA.

All of SBA's programs and services are extended to the
public on a nondiscriminatory basis.

INTERNATIONAL TRADE ASSISTANCE


The U.S. Small Business Administration (SBA) provides financial and business
development assistance to encourage and help small businesses in developing
export markets.

FINANCIAL ASSISTANCE

The SBA assists businesses in securing the capital needed to explore,
establish or expand international markets. SBA's export loans are available
under SBA's guaranty program. As a prospective applicant, you should request
that your lender seek SBA participation if the lender is unable or unwilling
to make the loan directly.

 The financing staff of each SBA district and branch office administers the
financial assistance programs. You can contact the finance division of your
nearest SBA office for a list of participating lenders.

Borrowers can use different SBA loan programs and types of loan guarantees
simultaneously, as long as the total SBA-guaranteed portion does not exceed
the agency's $750,000 statutory loan guaranty limit to any one borrower.

The lender may charge a maximum interest rate of 2.75 percentage points above
the New York prime interest rate, or 2.25 percentage points above New York
prime if the maturity is less than seven years.

REGULAR BUSINESS LOAN PROGRAM

The SBA can guarantee up to 90 percent of a bank loan up to $155,000.  For
larger loans, the maximum guaranty is 85 percent or $750,000 whichever is
less.

Use of Proceeds

Small businesses that need money for fixed assets and for working capital may
be eligible for the SBA's regular 7(a) business loan guarantee program.  Loan
guarantees for fixed-asset acquisition have a maximum maturity of 25 years.
Guarantees for general purpose working capital loans have a maximum maturity
of seven years.  Export trading companies (ETCs) and export management
companies (EMCs) also may qualify for the SBA's business loan guarantee
program.

Eligibility

To be eligible, the applicant's business generally must be operated for
profit and fall within size standards set by SBA.  Loans cannot be made to
businesses involved in creation or distribution of ideas or opinions, such as
newspapers, magazines and academic schools.  Other types of ineligible
borrowers include businesses engaged in speculation or investment in rental
real estate.



EXPORT REVOLVING LINE
OF CREDIT PROGRAM

The Export Revolving Line of Credit (ERLC) Program offers a credit line up to
36 months.  Any number of withdrawals and repayments can be made as long as
they don't exceed the dollar limit of the credit line and the disbursements
are made within the stated maturity period.  Loan maturities are generally
for 12 months, with options to renew.

Use of Proceeds

Loans can be used to finance labor and materials for manufacturing or
wholesaling for export, to develop foreign markets, or to finance foreign
accounts receivable.  Foreign business travel and participation in trade
shows are also among the eligible uses, but a regular 7(a) business loan may
be more appropriate for these purposes.

Eligibility

Applicants must satisfy eligibility criteria established for all SBA loans.
Also, applicants must have been in business -- not necessarily exporting --
for at least 12 months continuous operation before filing an application.
The 12-month requirement may be waived by the SBA regional office if the
firm's management has sufficient export experience or enough management
ability to warrant an exception.

INTERNATIONAL TRADE LOANS

The International Trade Loan Program provides long-term financing to help
small businesses compete more effectively and to expand or develop export
markets.

Loan maturities cannot exceed 25 years, excluding the working capital portion
of the financing. The SBA's guaranty cannot exceed 85 percent of the loan
amount, thus precluding loans of $155,000 or less. The agency's maximum share
for facilities or equipment loans is $1 million, plus $250,000 for working
capital.

Use of Proceeds

Proceeds may be used to purchase or upgrade facilities or equipment, and to
make other improvements that will be used within the United States to produce
goods or services.

No debt payment is allowed.  Proceeds can be used to buy land and
building(s); build new facilities; renovate, improve or expand existing
facilities; purchase or recondition machinery, equipment and fixtures.  The
working capital portion of the borrowing could be in the form of either an
ERLC or a portion of the term loan.

Eligibility

Applicants must establish either of the following to meet eligibility
requirements:
     Loan proceeds will significantly expand existing export markets, or
     develop new ones.

     The applicant's business is adversely affected by import competition.


SMALL BUSINESS INVESTMENT COMPANY (SBIC) FINANCING

A Small Business Investment Company (SBIC), approved and licensed by the SBA,
may also provide equity capital or working capital exceeding the agency's
$750,000 statutory maximum.  Unlike the SBA, SBICs can invest in export
trading companies in which banks have equity participation as long as other
SBIC requirements are met.

BUSINESS DEVELOPMENT ASSISTANCE

The SBA provides business development assistance to exporters, including
trade counseling, training, legal assistance and publications.

Counseling

Counseling is available through SBA's resource partners, the Service Corps of
Retired Executives (SCORE) and the Small Business Development Centers
(SBDCs).  SCORE is an organization of retired executives who volunteer their
time to provide management and technical assistance to small businesses.  A
SCORE counselor also can assist you in developing an international business
plan.  Your local SBA office can match you with a SCORE volunteer experienced
in exporting.

SBDCs, located on college and university campuses, provide a wide variety of
information and guidance in easily accessible locations,  SBDC services
include, but are not limited to, financial guidance, marketing, production,
organizational development, engineering and feasibility studies and technical
assistance.  Some SBDCs have designated international trade centers; all
SBDCs provide export counseling, referral and/or training.

Training

SBA district offices sponsor export training programs, often in conjunction
with SCORE, SBDCs and other public and private trade groups.  Offering
something for the beginner to the more advanced exporter, topics range from
export financing to joint ventures.  You also can learn how to do business
outside our borders through the various market- and region-specific workshops
offered.

Women executives and business owners can take advantage of a conference
series offered under SBA's "Women Going International" program.  A joint
effort of the Offices of International Trade and Women's Business Ownership,
the program is designed to encourage more women to export and to provide the
basic, "how-to" training necessary to get started.

Publications

The SBA publishes books and fact sheets on international trade, including the
"Exporter's Guide to Federal Resources for Small Business," which describes
international trade services available from the federal government.  Other
SBA publications also are available.

Legal Assistance

Your local SBA office can arrange a free initial consultation with an
attorney to discuss international trade questions, under an agreement between
the Federal Bar Association and the SBA. Such questions may include contract
negotiation, agent/distributor agreements, export licensing requirements,
credit collection procedures, documentation and others.

ADDITIONAL INFORMATION

The SBA has offices located around the country.  For the one nearest you,
consult the telephone directory under U.S. Government, or call the Small
Business Answer Desk at 1-800-8-ASK-SBA or [phone] (FAX).  For the
hearing impaired, call [phone] (TDD).


All of SBA's programs and services are extended to the public on a
non-discriminatory basis.