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Government assistance to entrepreneurships: on local, state/provincial, and federal levels.

INTRODUCTION

Ron A. Straatsma

MR. STRAATSMA: Well, good afternoon, everyone. My name is Ron Straatsma, and I will be your moderator for Session 5.

I am the Managing Director of the State of Ohio's Canadian Office based in Toronto, and for your information, you may note that the State of Ohio operates eleven international offices with Canada, being officially opened way back in 1990 at the advent of the original Canada-U.S. Trade Agreement. This afternoon we are featuring our panel on government assistance to entrepreneurships, talking about government supported-various levels of support from government, and today we have two speakers to help us go through that process.

The first speaker is Mr. Gilbert Goldberg, who is the director of the U.S. Small Business Administration, Cleveland District Office, locally based. As the District Director, Gilbert is responsible for the administration of a business portfolio of some 6,400 loans with a total book value of some $604 million.

He has oversight of the Ohio Small Business Development Center and seventeen sub-centers and the coordination of five chapters of SCORE, which is a volunteer organization that provides free business counseling. Gil also serves as national SBA representative under the agency's lender liaison program for Key Bank and National City Bank.

And since his appointment as District Director in 1994, the office has focused its attention on putting the customer first and reducing red tape. In terms of the results of that, the bottom line focus on the customer has enabled Gil's office to outpace the nation in loan growth, and it did so over the last five years.

The District in 1999 also developed a campaign that enabled it to achieve record loan growth for minority-owned entrepreneurs, and in 2000 the Cleveland District Office developed a unique initiative for the economic revitalization for the City of Youngstown and did so by combining SBA resources, Project Sector Banking in the City of Youngstown.

Before coming to the SBA as District Director back in 1994, Mr. Goldberg spent 20 years in commercial banking of which the last ten were devoted to mid-market and entrepreneurial business development in Northern Ohio. He holds a Bachelor's Degree in Foreign Service from Georgetown University and Master's Degree in Business Administration from the University of Notre Dame, and he resides in Shaker Heights. So, Gil?

UNITED STATES SPEAKER

Gilbert B. Goldberg *

MR. GOLDBERG: Thank you, Ron, for the introduction. I don't have a Power Point presentation today. I will just come up here and talk a little bit if you don't mind. If you are wondering why I don't have a Power Point presentation, I don't believe in Power Point presentations. I was supposed to go second, and the other panel member came up to me and said "Gil, would you mind if you go first? We can't find my Power Point." Now you know why I don't believe in Power Point presentations.

I will try to make this as interactive and dynamic as possible, even though we don't have a Power Point.

One of the things I was wondering is why Henry King called me and said "Gil, can you be on this panel for the Canada-United States Law Institute?" And I thought maybe he was interested in my son who is an attorney in New York rather than myself, and then I started to look through the sessions for today, and I saw "Session 1: The Importance of Entrepreneurship to Economic Growth," "Session 2: Creating Entrepreneurships," "Session 4: Financing Entrepreneurships" and so on. All the sessions had the word "entrepreneurship" in it, and I thought to myself that's why we are here. You can't think of entrepreneurship in the United States without thinking of the United States Small Business Administration and our programs.

Basically, we have four programs that entrepreneurs can use, and you in the room can also take advantage of, whether you are an entrepreneur, a lawyer, an accountant or advisor. I think our programs are something that can bring value to a small business. I will give you a quick little overview first.

Our first program, the program most people think about, is our loan program. We have two loan programs, 7(a) an 504 that provides funding to businesses. (1) On the panel before I came up to the podium to speak,, I heard somebody say it is really hard to get financing because a lot of these startups lack hard assets.

Well, if you look at our programs, hard assets are not a requirement. Cash flow is a requirement. We think that Uncle Sam's guarantee substitutes for the lack of hard asset--or even the soft asset. We look for cash flow, and if the cash flow is there and the asset is not, theoretically, you can get funding under our program to start your business.

There is another program we have to help businesses once they get in business: government contracting--contracting for small business. (2) We facilitate small business access to government procurement officers in every department and agency of the United States Government. (3)

And right now, the segment of government procurement that is devoted for small business by law or presidential proclamation is $300 billion annually. (4) That' s a lot of money. And we will help you get the right contacts.

The third program we have is technical assistance. (5) That's providing business plan assistance, marketing assistance, and problem solving assistance to any business that needs it. It is done gratis. (6) It is done through our Small Business Development Centers around the state and also around the nation. It is also done through the Service Core of Retired Executives--which again is available to the entrepreneur free, individuals that actually have business experience in any given area.

And then our fourth area--which lot of VCs that are very familiar with permitting the SBA to fund Small Business Investment Company. We fund venture funds that specifically invest in small business. (7) Basically they make the decision on our behalf. They basically make the investment in the small business, and we take the risk with them.

Sometimes we win, and sometimes we lose on situations like that. But fight now I would like to get back to one of our programs, and that's our lending program. Nationwide this year--we are about half way through our fiscal year (our fiscal year began October 1, so we are just a little over half way through our fiscal year)--if you analyze the data, the loan data, we will probably make over 110,000 loans nationwide (8) (or guarantee because we don't actually make them--the banks make them, and we guarantee them).

So, there are 110,000 nationwide loans this year and there will probably be about $15 billion. (9) That's a lot of money to fund small business. Typically, about 20 to 25 percent of those 110,000 loans go to startups. (10)

These startups can be businesses that have just started in business or have been in business for two years because our definition right now is that any business that is two years or less we consider a startup or new business. So in that 25 percent of startup loans could be someone that has been in business six months or up to two years. That definition was changed probably about ten years ago.

Before that, before--let's say 1997--we defined startups as true startups, someone who had never been in business before. And I have a question for everyone here in the group. Going back, if you look at the true startup, someone who has never been in business before, not someone who has been in business six months or two years, what do you think their success rate is? You people out there that work with startup companies, put money into startup businesses, new businesses, what do you think their success rate is?

MR. ABRAHAMS: One percent.

MR. GOLDBERG: One percent. Okay. Anyone else? I like to throw out that question to groups such as yours.. I throw it out sometimes at a meeting with a group of accountants, and I would think the accountants are sharp once they get out their fine point pencil and know what they are doing. They usually respond 20 percent, 35 percent, five percent, or two percent.

Well, in the Cleveland District, which is really a small district--we run from the Pennsylvania line to the Indiana line and cover the northern 28 counties of Ohio (11)--back in 1994, we made 364 startup loans. (12) We tracked those startup loans, true starts, for a period of about six and-a-half years. We found after six and-a-half years that 78 percent were still in business. (13) That's a remarkable figure. It is even more remarkable when you think it is here in the rust belt--Northern Ohio. We started to ask questions: why was that so great?

Now, we basically came down to two reasons. One, we required 286 businesses to do a business plan, to work either with SCORE--The Service Corp of Retired Executives or the Small Business Development Center--and develop a business plan or a business model, and we think that was the road to success, and it really helped them. (14)

The other thing that contributed to this great success rate was having the fight financial structure, the fight amount of equity coming in--whether it is 20 percent or 30 percent--coupled with the fight amount of funding. Contrary to that approach, typically what we see out there is someone who can't find access to venture funds or get the proper funding, relies on the credit card offerings in the mail, they fill out the application, call up the bank to get the money, and they open up for business without even thinking, without the business plan, without anyone realizing if they really have enough money to make the business work.

We think that having the proper financial structure--debt to equity--with a business plan is the reason why 78 percent of the businesses have succeeded. The 78% success rate that we had in Northern Ohio can be seen elsewhere in the Agency. We like to think that companies can say "I got my start with the SBA."

Well, some of the companies that got their start with the SBA, some of them are not household names. Some of them are household names that we recognize: Outback Steakhouse, Compact Computer, Apple Computer, Staples, Intel and FedEx. (15) There is also one company that I am particularly fond of. I like ice cream and there is Ben and Jerry's Ice Cream from Vermont. They got their start with an SBA loan in the Vermont office, and it was kind of a rocky start. (16)

I will let you know a little secret about Ben and Jerry's. That loan had to be restructured three times before they made it. (17) The banker was running scared. We told the banker, "You got a guarantee, don't worry about it. Let's see if we can restructure to their cash flow and make it work."

Three times it was restructured, and it did work, and everyone knows that it did work, and everyone knows of the success of Ben and Jerry's.

Look here in Northern Ohio; look at what we do for startups. Last year in 2006, we made 737 startup loans for 34 percent of our total lending. (18) So we do have quite a commitment here. The banks do lend under our guarantee to startups, even though their first reaction will be, "We don't lend to startups." (19) They do, and they have done it. And once you get started, then I think after you've developed about a year track record, you are eligible to sell to the federal government under any of our contracting programs. (20) And as I said, that's a $300 billion market. (21)

In your handout that you have, there is a section on selling to the government. It looks like this. (Indicating.) It starts out with $300 billion--you don't need to go through it as we go through it, but on the second page of that handout, you will see that there are basically four designations of types of businesses that the government recognizes, that get special preference when it comes to selling to the federal government.

One is women-owned businesses. (22) There is no special certification you have to go through. You self-certify that you are a woman-owned business, that 51 percent of the business is owned by a woman, by a female. By presidential proclamation, by executive order, five percent of all government procurement has to go to a woman-owned business, and that translates to $15 billion. (23) Again, that's a lot of money.

Another self-certification program is to service disabled veterans. (24) If you are disabled--if you are a disabled veteran--and again, it is self-certifying, there is $9 billion, three percent by presidential proclamation or executive order. (25) Three percent is available, and procurement officers at these government agencies have this goal, and they are judged by the goal, whether they make it or don't make it. (26)

So there is a big incentive for them to help the business get the right contracts. Then we have two programs in which we do have to certify the business. One is a Small Disadvantaged Business, and the other is 8(a). (27) They have different qualifications. It is done by statute. (28) The statute defines minorities as being disadvantaged under the law (historically) and therefore, you can qualify for set-aside programs. (29) Again, this is five percent of that $300 billion or $15 billion. (30)

We also have another program that we certify--called the "HUBZone"--under utilized business area. (31) There is no presumption of historic discrimination. (32) It is just whether you are located in an area that has been designated a labor surplus or low-moderate income area, and we call that a HUBZone. (33)

And if your business is located there, if the business is owned by an American citizen, and if the business employs 35 percent of its employees from a HUBZone, it can qualify for certain set-asides and preferences. (34) Again, it is three percent of that $300 billion program, a lot of money. The rest of the packet that you have goes into some detail on those programs. I won't go over that at this time.

If you have any questions, I brought the brain trust from the Cleveland District Office that can answer those. I also brought as part of that brain trust an individual that can answer questions you might have on our lending programs. So at this time, I hope you found your Power Point. I can go on more and more--for a longer time if you haven't found your Power Point.

MR. STRAATSMA: No. That's great. Actually, thanks very much, Gil. Are there any questions at this point?

MR. ABRAHAMS: Just a quick one: Gil, are there any HUBZones in Cuyahoga County? Which ones, and where are they?

MR. GOLDBERG: There are quite a few HUBZones. How many would you say, John?

MR. RENNER: HUBZones are designated by census scribes, (35) and there are dozens, (36) virtually the entire east side of Cleveland, (37) and a lot of areas on the west side are also HUBZones. (38)

MR. ABRAHAMS: Within the City of Cleveland proper, Joe, Cleveland proper mainly?

MR. GOLDBERG: The easiest thing to do, if you have a company and you want to know whether or not you are in a HUBZone would be to go to the SBA website--sba.gov--and you click on HUBZone, and there a program will pop up. You can enter the address of your company and it will show whether you are in a HUBZone or not. As John said, you know, there are dozens within the City of Cleveland, (39) and let me give you another example: Ashtabula County, a little further east of Cuyahoga County, the entire county is designated a HUBZone. (40)

MR. STRAATSMA: Yes.

DR. BARBER: I just wondered, when you described the success of companies six and-a-half years down the pike, so to speak, how did you define success?

I guess my question is: I think often startups evolve, and there may well be just a small percentage that actually go bankrupt, but they get merged or acquired. Were they counted in the successes, or did they stay pure?

MR. GOLDBERG: We did not have the resources to track the company individually. What we looked at was, basically, the cost to the taxpayer since the taxpayer is supporting the loan via our guarantee program. If they made their payments in timely fashion and paid off the loan, they were a success. They didn't cost the taxpayer any money. So I don't know how many were acquired. I don't know how many grew to a plateau that is sexy enough for VCs, but we define success as the ability to pay off the loan in a timely fashion. One other thing if you don't mind.

MR. STRAATSMA: Please.

MR. GOLDBERG: We mentioned some of our economic development programs that we have with various entities in our district, and I will just briefly mention those because this is a way of attracting supplemental equity to your business--if I could ask Mark and John to hand it out.

We have done an economic development initiative in the City of Youngstown and one for Wards 1 and 3 here in the City of Cleveland on the southeast side; Wards 1 and 3 are on the south side. What we have found out--and I guess as most of you know--the hardest thing for a business to do is to attract equity. (41)

So we have come up with free money. But it is not a free lunch for the small business. If the small business has ten percent of their own equity in the business or is able to start the business with ten percent equity and can qualify for an SBA guaranteed loan and can develop a business plan through the assistance of either SCORE or the Small Business Development Centers. (42) Then the City of Youngstown will supply them with a 15 percent performance grant that--if they meet certain hurdles--that performance grant or loan is forgiven over a three-year period and actually becomes true equity. (43)

The money that Youngstown supplies is subordinated and put on standby. (44) So, no payments are made during the three-year period. So, it actually is free money, and they don't have to service the debt. (45)

If you take their ten percent equity and couple it with the 15 percent supplemental equity from the city, you have a borrower that has 25 percent equity and can usually qualify, with a good business plan, for an SBA guaranteed loan.

Also, Youngstown is providing tax abatements, waiverable city permit fees, and a facade grant. (46) On the east side of Cleveland in Wards 1 and 3, it is limited to equity funding, (47) but again, it is free money that doesn't have to be paid back. But it is not a free lunch because you have to meet those pretty tough requirements.

Thank you.

MR. STRAATSMA: Any others?

Gil, with respect to the profile, your chart here, this identifies by percentages, and just going over your tenure for the last ten plus years, have the types of firms changed that you deal with, your client base?

MR. GOLDBERG: When I first came to the SBA in 1994, the majority of all the loans we did, the biggest bulk, went to manufacturing, both in numbers and in dollars. That held true until 1996.

In 1996 the largest number of loans went to manufacturers, that is no longer true. The service sector has become the largest segment in number of loans. But it was not until 1998 or 1999 that the dollar switched. Manufacturing took a few more dollars for a few more years, until probably 1997 or 1998.

And it is interesting, going back to the comment that was made on the last panel, (hard assets): it was very difficult to convert the banks from lending to manufacturing with hard assets to lending to service with either intellectual property or leasehold improvements. But I think they understand that lending now and realize that our guarantee along with the cash flow enables them to lend to a service sector or intellectual property company that does not have hard assets.

MR. STRAATSMA: Thank you. Thank you very much, Gil.

Our next speaker is John Connell. He represents the Canadian side, and he is the Director General of Small Business Policy with Industry Canada, which is a federal government department.

John is a career public servant in Canada. His responsibilities include the creation of policies and programs, addressing small business development throughout the country, and between 1998 and 2003, he served as a senior chief, Industry Analogy Comment for Finance Canada, (48) which had a mandate of increasing industry productivity and competition in a knowledge-based economy.

Between 1995 and 1998, he served as a Privy Council Officer in the Economic and Regional Development Policies (49) of the period, and he now handles submissions from the Minister of Industry to that body.

John obtained his Bachelor of Arts and Master's Degrees at Queens University in Kingston, Ontario, with a concentration on political studies and public administration. This afternoon he would like to address some of the methods and some of the issues facing entrepreneurs in Canada and some of the actions that the federal government will respond to. John?

CANADIAN SPEAKER

John Connell ** (presentation unavailable for publication)

DISCUSSION FOLLOWING THE REMARKS OF GILBERT GOLDBERG AND JOHN CONNELL

MR. STRAATSMA: Thank you very much, John. Any questions for either of our panelists?

DR. HISRICH: John, my question is for you. You made the point that going forward, sustaining economic development in Canada would depend on a high level of immigration. At the same time, it is clear that countries like China and India are beginning to develop--they will not come to Canada and, in fact, are here and are going back. Given high demand and the access to supply, has anybody been thinking how the government is going to deal with the reality of high demand, no supply?

MR. CARMODY: We have heard a lot about additional financing from what appears to be government with aided sources, and we heard in the previous session about the fact that one of the inhibitors to entrepreneurial development in Canada is the whole role of banks.

I was very impressed with Gil Goldberg's presentation and looking at the materials his people passed out, and it is evident there are a lot of financial institutions in this country who are willing to take a risk, and you are not necessarily going to be blackballed if you don't make it once.

How can we perhaps adopt some of those peaks in our own country and Canada to promote economic growth in the entrepreneurial spirit?

MR. KANTER: This is a kind of comment as well. Mr. Connell, you mentioned the importance of exports, especially to the Canadian companies. I am with the U.S. Department of Commerce Office U.S. Export Sector System. Bob Abrahams is here from the Toledo office and Henry Adams. Our focus is on small and medium-sized companies and to encourage exports around the world, but particularly to Canada because neighbors are the logical choice for small and medium-sized companies, particularly to work their counterparts in Canada, to move their products across the border and northward.

I am sure the consulate at Detroit is working very hard to match the Canadian clients that you have on the northern side of the border in Canada. So the role of exports in both directions is probably very important for small and medium-sized companies, especially in Northern Ohio as well as in Canada because a lot of the trade is more north and south than east and west. (50)

It is easier for an Ohio company to ship to Ontario than it would be to California.

MR. STRAATSMA: Any further questions or comments? Yes, sir.

DEAN ENTIN: I am just curious about the success rate on small businesses. I ask this because I know there have been studies in the U.S. suggesting that the failure rate of small businesses in the first couple of years is pretty high.

So I was struck, and I have two questions. One is for Mr. Connell: do you know what the corresponding figures are in Canada? And second, to Mr. Goldberg: granted, the data you have are based on defaults, but I wonder with the experience in your office in this area, if it is comparable to other SBA offices around the country? And if so, does that suggest that the SBA has figured out a way to pick the best risks for loans? It just seems like a notably higher success rate than some of the studies that I have seen more generally.

MR. GOLDBERG: On our statistics, please realize those statistics relate just to SBA financing, which may be a small percentage, even though I mentioned we are talking 110,000 loans, and $16 billion annually. That's a lot of money but really is a small percentage of those businesses that are getting loans. Out of that 110,000, probably only 25,000 or so are what we would classify now as new businesses, two years or less.

But I think that businesses that do come to the SBA perform better, 1) because of that technical assistance portion, and 2) because of the proper financial structure. They have the right amount of financing that they need with the right equity.

You know, too many times I think a business fails because they don't get the right amount of funding they need and start behind the eight ball to begin with, and I think they can make it up as they go along, but they get further and further and deeper and deeper into trouble.

I mentioned the Youngstown initiative, and again, that's one where there is supplemental equity coming in, and there is technical assistance. We made our first loan in Youngstown in the year 2000. (51) And it has been running constantly since that time, and we have helped approximately 70, 71, 72 companies in Youngstown. (52) Some of them are startups, some of them existing, and out of those 70 or so companies, only three have gone bad. One was restructured.

But I think that is a good track record, and that's in Youngstown, Ohio, probably one of the most severely hit areas in Northern Ohio, and those 70 companies represent about 17 or so million dollars in Youngstown.

One more thing I would like to say. In your packet, that blue and white folder, there are three handouts. One is the government contract they hand out. The other one has a 7(a) lending guide on it, and the last one was the 504, another loan program that we have. It has everything you need to know about the U.S. Government, SBA lending, but were afraid to ask. And if you do have any questions, I have two experts from the Cleveland District, Mark Hansel, if he could raise his hand on the finance side, and on the government contract side, I have John Renner. So if you have questions now or during the cocktail reception, those are the two gentlemen you could approach.

MR. STRAATSMA: Yes, sir.

DR. BARBER: We have had a lot of input on financing, mainly on financing, and what I want to say is that I have been involved in studies, startup of early stage companies where I have talked to the CEOs of companies that may have been in startup for over five or six years. And the one question that I want to raise, because it came out of those conversations, was that their issues were not generally about science or technology or the ability to understand the applied technology. They were generally not about money.

Some of them got more money than they needed, which created problems for them. Some of them got less, which created problems for them. The really successful ones were all foreigners who didn't expect any help of any sort, and they were making it.

But the point that came out about it was that the real weakness was about competence in commerce. None of them had much sense about how to make the value exchange happen, whether you are in finance or whether you are in technology. So the question that I want to ask is: what about the human competence to make enterprises work? Are there any shortcomings here, and if so, who deals with those?

MR. GOLDBERG: Just one empirical comment. I couldn't add anything from a conceptual standpoint to what John had to say. I think we see that in our loan application process and in our various initiatives. I think it bears out in reality that those that really have the desire, who really have the skills and the passion are the ones that actually come forward and make it a success.

And when we first announced the Youngstown initiative, we did it with a lot of fanfare. The three TV stations were there in Youngstown, as well as the newspapers. And what people heard from that announcement was free money. Free money!

The next day, the City of Youngstown got something like 800 calls, the day after that another 800, the day after that another 800. Maybe a few people came in, but as you see, it is self-selecting. Suddenly loans were made out over a couple thousand phone calls and people looking for that free money. When they realized there was no free money, that they had to have that desire, passion and ten percent of their own equity, it was self-selecting.

MR. BROWN: My question actually relates to Mr. Barber's question, and this is for Mr. Goldberg.

In Cleveland, they have organizations like Team NEOand Nordac. What kind of role do those organizations play in fostering these issues with entrepreneurship? Mr. Connell, can you respond with something similar in Canada?

MR. GOLDBERG: They play a very important role of providing financial assistance, either in the form of venture fund, grants or subordinated funding to businesses. I think their's is an important role for economic development in the area, and economic development is very fragmented. It takes a lot of different pieces coming together to make it work. To make it work and know what business is a success. Team NEO and the others out there are one part. If we fit our part to someone else' s part, that works, fine, but it is fragmented, and we are all there to make sure, hopefully, that anyone that has a successful plan or idea and the right passion to do it so it won't fall through the cracks.

MR. STRAATSMA: Very good. Gil, John, thank you very much for your time this afternoon. And we will have time during an hour of discussion.

MR. UJCZO: Just a few logistical announcements. On behalf of the Institute, we do thank all our speakers for this afternoon. As a native Youngstowner, we particularly appreciated the last session and as well the work of the SBA in Youngstown. We are on a half hour break. Cocktail hour will begin at 5:30 in the room directly above where we had lunch, so it is just upstairs. You go to the light, the sunlight, and that's where the cocktail hour will be. Dinner will be started shortly thereafter and the presentation is upstairs this evening. If you are not joining us for dinner, we will meet promptly tomorrow morning at 9:00 a.m.

Thank you.

Session Chair--Ron A. Straatsma

Canadian Speaker--John Connell

United States Speaker--Gilbert B. Goldberg

* As District Director, Gil Goldberg is responsible for directing the activities of 11 permanent SBA employees; the administration of a business portfolio of over 6,400 individual loans for a total of more than $604 million; oversight of the Ohio Small Business Development Center and 17 sub-centers; and the coordination for five chapters of SCORE, a volunteer organization that provides free business counseling. He is also responsible for the marketing efforts of the two SBA sponsored micro-lenders in the District as well as the delivery and oversight of the Agency's 8(a), SDB, and HUBZone government contracting programs for small business. Gil also serves as the National SBA representative under the Agency's Lender Liaison Program for Key Bank and National City Bank. In addition, he was a member of the Agency's Goals Team for four years. Before coming to the SBA in 1994, Mr. Goldberg spent 20 years in commercial banking. Mr. Goldberg holds a bachelor's degree in Foreign Service from Georgetown University and a master's degree in Business Administration from the University of Notre Dame.

(1) Small Business Administration, http://www.sba.gov/services/financialassistance/ sbaloantopics/cdc504/index.html (last visited Sept. 23, 2007).

(2) Small Business Administration, http://www.sba.gov/services/contractingopportunities/ basics/buys/index.html (last visited (Sept. 23, 2007).

(3) See id.

(4) News Release, Richmond District Office of the U.S. Small Business Administration, The U.S. Small Business Administration and Mt. Gilead International Ministries to Conduct a Symposium for Small Business Owners (Sept. 7, 2007), available at http://www.sba.gov/idc/groups/public/documents/va_do_files/ va_october20_symposium.pdf [hereinafter News Release, Richmond].

(5) See Small Business Administration, http://www.sba.gov/services/training/onlinecourses/index.html (last visited Sept. 23, 2007).

(6) Id.

(7) Small Business Administration, http://www.sba.gov/smallbusinessplanner/start/financestartup/ SERV_FINANBASICS.html (last visited Sept. 23, 2007).

(8) See generally FY 2007, Budget of the United States Government, http://www.whitehouse.gov/omb/budget/fy2007/sba.html (stating that the Small Business Administration issued 89,000 loans under the 7(a) program alone) (last visited Sept. 23, 2007).

(9) See generally Small Business Administration, http://www.sba.gov/aboutsba/history/index.html (stating that the SBA backed more than $12.3 billion in loans last year) (last visited Sept. 24, 2007).

(10) See generally Small Business Administration, http://www.sba.gov/services/financialassistance/sbaloantopics/ microloans/index.html (discussing the Micro-Loan Program which provides small loans to start-ups) (last visited Sept. 24, 2007).

(11) Small Business Administration, http://www.sba.gov/lcalresources/distriet/oh/cleveland/aboutus/index.html (last visited Sept. 23, 2007).

(12) See generally id. (discussing the total number of loans made in 2004) (last visited Sept. 24, 2007).

(13) See generally Study Shows Start-ups Have High Rate of Success, http://www.nfib.com/object/3678661.html (citing a national SBA study which found that 67% of new ventures are successful after 4 years) (last visited Sept. 23, 2007).

(14) See generally Business Plan for a Startup Business, http://www.score.org/downloads/Business%20Plan%20for%20a% 20Startup%20Business-July.pdf (providing a guide to preparing a business plan by Service CORE) (last visited Sept. 23, 2007).

(15) See CharlotteSteakHouses.com, http://www.charlottesteakhouses.com/news.cfm/Article/ 37266/Outhack-Steakhouse-SBA-Success-Story.html (stating that the SBA provided $151,000 of working capital which led to Outback Steakhouses success) (last visited Nov. 12, 2007).

(16) Jeff Moore, Looking for Start-up Cash?, DETROITER, Feb. 1, 2001, available at http://www.allbusiness.com/north-america/ united-states-michigan-metro-areasdetroit/810131-1.html.

(17) See generally Glossary of Terms, http://www.delawarecountybrc.com/ glossaryterms.htm (providing a definition of restructuring a loan) (last visited Sept. 23, 2007).

(18) See Mary Vanac, Charter One Gets Top SBA Lending Honor, CLEV. PLAIN DEALER, December 12, 2006, available at http://www.cleveland.com/weblogs/print.ssf?/mtlogs/ cleve_eeditiordarchives/pdnt214855.html.

(19) See Joseph Anthony, 6 Things to Know About Getting an SBA Loan, MICROSOFT's SMALL BUSINESS CENTER, http://www.micrisift.com/smallbusiness/resources/startups/startup_financing/ 6_things_to_know_about_getting_an_sba_loan.mspx (last visited Sept. 24, 2007).

(20) See generally Small Business Administration, http://www.sba.gov/services/contractingopportunities/certifications/ index.html (providing the requirements for doing business with the government) (last visited Sept. 23, 2007).

(21) News Release, Richmond, supra note 4.

(22) Small Business Administration, http://www.sba.gov/services/contracfmgopportunities/ basics/identify/index.html (last visited Sept. 23, 2007).

(23) Id.

(24) Id

(25) Press Release, The White House, Executive Order: Service Disabled Veterans Executive Order (Oct. 21, 2004), available at http://www.whitehouse.gov/news/releases/2004/10/20041021-5.html.

(26) See generally Small Business Administration, http://www.sba.gov/services/contractingopportunities/basics/ identify/index.html (discussing the goal of having 5% of contracting with women-owned small businesses) (last visited (Sept. 23, 2007)

(27) Small Business Administration, http://www.sba.gov/aboutsba/sbaprograms/sdb/index.html (last visited Sept. 23, 2007).

(28) C.F.R. [section][section] 124.101-124.112 (2007).

(29) See 13 C.F.R. [section] 124.103 (2007) (discussing the statutory definition of 'socially disadvantaged).

(30) JAYETTA HECKER, STATUS OF SMALL DISADVANTAGED BUSINESS CERTIFICATIONS 1 (Government Accountability Office 2001) available at http://www.gao.gov/new.items/d01273.pdf.

(31) GC/BD HUBZone, http://www.sba.gov/hubzone/ (last visited Sept. 23, 2007).

(32) See HUBZone--Frequently Asked Questions, https://eweb1.sba.gov/hubzone/internet/general/faqs.cfm#Q3 (last visited Sept. 23, 2007).

(33) See id.

(34) See id.

(35) See generally HUBZone--Frequently Asked Questions, https://ewebl.sba.gov/hubzone/internet/general/faqs.cfm#Q16 (discussing qualified census tracts and four other qualifying geographic locations) (last visited Sept. 23, 2007).

(36) SBA HUBZone Locator, http://map.sba.gov/hubzone/hzqry.asp?state=oh (click the black dot representing Cleveland 3 times) (last visited Sept. 23, 2007).

(37) Id.

(38) Id.

(39) Id.

(40) SBA HUBZone Locator, http://map.sba.gov/hubzone/hzqry.asp?CNTY=39007 (last visited Sept. 23, 2007).

(41) See generally Small Business Administration, http://www.sba.gov/services/financialassistance/equitycapital/equity/ index.html (discussing equity capital) (last visited Sept. 23, 2007).

(42) But cf. Small Business Administration, http://www.sba.gov/services/financialassistance/eligibility/ requirements/index.html (indicating that 20% equity is required to be eligible) (last visited Sept. 23, 2007).

(43) THE YOUNGSTOWN INITIATIVE (City of Youngstown) available at http://www.ytowndevelopment.com/docs/youngstown_city.PDF (last visited Sept. 23, 2007) [hereinafter YOUNGSTOWN INITIATIVE].

(44) See Youngstown/SBA Initiative, http://www.ytowndevelopment.com/docs/YOSBAINITIATIVEAPP.pdf (last visited Sept. 23, 2007).

(45) See id.

(46) YOUNGSTOWN INITIATIVE, supra note 43.

(47) A Partnership for Economic Development in Southeast Cleveland, SBA's REGION V OFFICE, Winter/Spring 2007, 4, available at http://www.sba.gov/idc/groups/public/documents/ region5/r5_finalsummer2006takefivenews.pdf.

(48) Driving Canada's Business Success, http://www.cybf.ca/about-us/board-of-directors/bio-johnconnell.htm (last visited Sept. 23, 2007).

(49) Id.

** John Connell is a career public servant with the Public Service of Canada. He is currently Director General, Small Business Policy, Industry Canada. His responsibilities include the development of policies and programs addressing small business development throughout Canada. Between 1998 and 2003, John served as Senior Chief, Industry and Knowledge Economy, Finance Canada. He was responsible for analysis and advice concerning microeconomic investments and policies aimed at increasing industry productivity and competitiveness in the knowledge-based economy. Between 1995-1998, John served as Privy Council Officer in the Economic Regional Development Policy Secretariat of the Privy Council Office. John handled submissions from the Minister of Industry to Cabinet and briefings on priorities and issues concerning the Industry Portfolio. Prior to 1995, Mr. Connell had a long and varied career in transportation policy with Transport Canada, with assignments in Ottawa, Vancouver and Canberra, Australia. John engaged in studies leading to Bachelor of Arts (Honours) and Master's degrees from Queen's University in 1979 and 1980, respectively, concentrating in history, political studies and public administration.

(50) State Trade Fact Sheets 2006: Ohio, Government of Canada, http://geo.international.gc.ca/can-am/washington/state_trade-2006/ ohio-en-asp (last visited Sept. 29, 2007).

(51) See generally Cleveland District Office News, U.S. Small Business Administration, available at http://www.sba.govlidclgroups/public/documents/oh_eleveland/ oh_cleveland_news07-06.pdf, 2 (last visited Oct. 6, 2007) (describing Youngtown initiative).

(52) Id.
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Title Annotation:Canada-United States Law Institute Annual Conference on Comparative Legal Aspects of Entrepreneurship in Canada and the United States
Author:Goldberg, Gilbert B.
Publication:Canada-United States Law Journal
Date:Jan 1, 2007
Words:6718
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