Business/Entrepreneurship

Most of the wealthy people on our Black Fortune and Wealth Magazine’s Richest 100 Black Americans are equity owners of a business, founded a business or worked for a successful company and derived stock ownership in that company. The path to becoming wealthy is not found through simply earning a salary but is based on equity ownership.

Oprah Winfrey created her own media empire from scratch.  Robert Johnson built his own cable network from private funds and some government assistance.  Richard Parsons became the CEO of Time Warner and amassed stock options that increased his net worth. Entrepreneurship begins with an idea and may be transformed into a business with good planning, management, and targeting the right audience for that particular product or service. Entrepreneurs are about doing things and getting things done.  America’s small businesses have generated about 70% of net new jobs annually over the past decade. 

President Obama’s administration is committed to helping small businesses and has made a $15 billion dollar commitment to small businesses through the SBA (Small Business Administration). The SBA was founded as a government agency in 1953 to “aid, counsel, assist and protect, insofar as is possible the interest of small business concerns.” The SBA through its network of lending partners makes loans available to small businesses that would otherwise find it difficult to obtain funds to grow or start their business.  Under President Obama’s administration, one of the biggest change in the SBA is increasing the loan guarantees, to a maximum of 90% on 7(a) loans.

 Here are some of the other very important changes concerning 7a SBA Loans.

• 7(a) loans Up to $2 million. The purpose for the capital is broad (expansion, acquisitions, startups, franchises, equipment, and even partner buyouts).
• 504 loans Up to $12 million. The main focus is on construction, renovation, or purchase of commercial property.
• Microloans Up to $35,000. Typically for working capital needs—that is, cash to pay for short-term needs such as payroll and vendors.
• The U.S. Government eliminated SBA fees that the business owner would normally pay the lender on 7(a) and 504 loans (to the extent of the guarantee). Generally, the fees will range from 2% to 3.7% on 7(a) loans and 1.5% for 504 loans.

For More Information On Resources for Small Businesses see links below:

http://www.sba.gov/services/financialassistance/7alenderprograms/plp/index.html

www.sba.gov/localresources/index.htm