SBA waits for stimulus bucks
Danny Staples is keeping an eye on the stimulus package. He stays in close contact with the offices of U.S. Sens. Olympia Snowe and Susan Collins, and reps at the Maine bureau of the U.S. Small Business Administration know him well. Staples, a lobsterman in Cushing and vice chair of the Zone D Lobster Council, is trailing the millions in stimulus funding set to flow through the SBA. He says that money could be a lifeline for some of the lobstermen in his council — especially the guys who were rattled so much this past year by the recession and fluctuating fuel and lobster prices that they’ve fallen 30 days or more behind on their business loan payments.
“[The stimulus package] gives them a little buffer to keep their head above water,” says Staples. “And hopefully the economy will turn around.”
New SBA initiatives created by the stimulus like the Business Stabilization Program, which gives loans of up to $35,000 to businesses in danger of failing, make Staples hopeful that the stimulus will help the industry he works in, but even after an information session with the local SBA chapter and conversations with the senators’ staff, Staples isn’t exactly clear on what the stimulus package means for Maine businesses, or how to access the money.
And he’s not alone — SBA officials are themselves still digesting the portion of the 1,000-page, $787-billion American Recovery and Reinvestment Act that relates to the $730 million allocated to small business programs, according to Maurice Dube, district director of the Maine SBA. The money has been earmarked for various existing and new SBA programs, but the SBA has to yet to come up with the rules and related paperwork to disburse all of that money — businesses as of March 16 were able to apply for stimulus-funded initiatives to increase loan guarantees and decrease loan fees, but efforts created from scratch, like the Business Stabilization Program, could take weeks or months to go online.
“We’re all waiting for the go-ahead from Washington,” says Dube. “They’re trying to get it out as fast as humanly possible.”
Federal SBA officials at press time were busy working on the logistics of disbursing the money through the SBA to small businesses, and Dube said whatever rules they come up with would then need to be approved by the U.S. Office of Management and Budget and other agencies that oversee the SBA. The funding is available on a nationally competitive basis.
“We will all be going to the same well at the same time,” he says. “It’s basically a first-come, first-drink basis.”
Moving money
“There is still a lot of information that is being sought by the business community to better understand what is available,” says Dana Connors, president of the Maine State Chamber of Commerce. “A lot of people are still grappling with what is this information and how does it apply to me.”
At press time, Connors planned to add an insert or continuing series of articles on the stimulus funding to the chamber’s weekly newsletter Impact. The articles will address the money available to businesses in Maine, and how to apply for it.
The efforts of Connors and other business leaders to decode the effect of the stimulus on the SBA and other parts of the Maine economy appear to be sorely needed — the Maine SBA has received close to 100 calls from businesses and lenders since December when the stimulus talk began heating up in earnest, according to John Gardner, Maine SBA economic development specialist. He and Lender Relations Specialist Helen Brimigion are keeping a list of inquiries to respond to once the federal SBA has nailed down the process enough for the Maine SBA staff to be able to explain it to area businesses.
“People just call and say ‘I want my share of the bailout,’” says Gardner. “Businesses want to know when the changes are going to happen.”
Gardner says some Maine businesses are waiting to close on loans in anticipation of a provision in the package that would reduce or eliminate lending fees, and lenders are particularly eager to hear more about stimulus money that will allow the SBA to increase its loan guarantee from a limit of 85% to 90%, a measure Maine SBA officials expect will make lenders concerned about risk more willing to make business loans in the state.
Danny Staples doesn’t plan to apply for a stimulus-boosted loan for his own lobstering business, but he’s glad the SBA will get an investment jolt alongside the widely reported billions for infrastructure and education. He thinks money funneled through the SBA will make a difference to the lobstermen he represents, and those are dollars well-spent.
“Now that everybody has a better handle on the state of the economy,” Staples says, “it’s nice to see these monies are going to become available.”
Sara Donnelly, Mainebiz managing editor, can be reached at sdonnelly@mainebiz.biz.
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