March 11, 2004

Almaden Business Association meeting highlights Entrepreneur Center resources

By Lorraine Gabbert
Staff Writer

At the recent Almaden Business Association meeting at Amato's, Entrepreneur Center speakers discussed resources available to businesses, including classes and small business loans.

“I am representing the whole spectrum of what we do at the center to help people start a business, or to assist people in making their business better,” said speaker Bonnie Austin, Business Information Center manager at the Entrepreneur Center. “We are unique in that a federal agency (the U.S. Small Business Administration), and a private sector company (Cisco Systems), and the city of San Jose have joined together to bring a variety of resources [to small businesses].” Austin noted that their library includes 700 business-related books, 50 videos, and six high-speed computers for the public's use. “We have materials on how to start a business, marketing tips, financing and accounting information, and samples of 300-400 small business plans,” she remarked.

The Entrepreneur Center also offers 70 courses each quarter on starting a business, IRS payroll, sole proprietorships, exporting, bookkeeping, and QuickBook s . Technology courses include: accepting credit cards online, micro-enterprise boot camp, and marketing.

“We try to offer lots of training,” said Austin. “We will work with micro-businesses, one-person businesses, and small stores, and help make technology make your business better, and your life easier.”

Financially speaking, the center also offers monthly training courses on securing a loan. “There are SBA micro-loan programs from $5,000-$16,000, which are processed in three weeks, and do not take a 40-page business plan to get,” commented Austin. Another one of their partners, the Lenders for Community Development, offers micro-loans for up to $10,000, she said. “The city of San Jose has a fantastic program for lenders at a 3.7 percent fixed rate. The micro-loans are at prime plus 4 percent,” Austin added.

In addition, one-on-one counseling with business experts is available at the center. “If you are already in business, the group that would help you is the Silicon Valley Small Business Development Center,” observed Austin. “This is [run through] a government grant which helps people get loans and expand their existing businesses. They hire a variety of contract consultants, including technology advisors, who can help you diagnose hardware and software needs and tell you what kind of a web page you should have.” The center also offers retail specialists, financial consultants, real estate advisors, a restaurant specialist, and more. “Depending on what your needs are, we can usually match you up with somebody,” said Austin. “Another source of free counseling is SCORE, the Service Core of Retired Executives. The Entrepreneur Center is small enough that we all know each other, and can take you from place to place. You tell us the kind of help you would like, and we will help you.”

“If you're starting out, the best place to go is the Entrepreneur Center, because they can help you with your business plan and get you moving in the right direction,” said Fernando Alvarez, vice president of the Bay Area Development Company, and a consultant at the Entrepreneur Center.

Alvarez spoke about Small Business Association (SBA) loans. He has been involved in this field for 17 years in the banking and private sector. “I can't say I've seen and heard it all,” he said, “because every day's an experience—you get to meet so many kinds of small businesses, you get to listen to dreams and aspirations—and a lot of times you get to help and participate in that.”

According to Alvarez, acquiring a small business loan is difficult unless the SBA is involved, because banks typically want to see some kind of track record. “The government put this program together because it felt that small businesses weren't getting the necessary help financially to start or grow a business,” he related. “With the SBA 7(a) program, the federal government tells the bank ‘we will issue a guarantee from 75-80 percent of the amount to be borrowed.' That's what gets the bank to take a chance and finance a growing or new business. These programs include working capital, inventory, machinery and equipment, improvements, construction, debt refinance, and real estate financing.”

The SBA 504 fixed-rate loan program focuses on established businesses. “They provide real estate and heavy equipment loans with 10 percent down from the individual, plus a bank mortgage loan for 50 percent, and an SBA loan for 40 percent,” said Alvarez. “With the 504 loan program, you get a fixed rate over 20 years. The current rate for the SBA portion is 6.1 percent—that's the lowest it's been in the last 40 years. If you are an existing business that is currently renting, you should seriously look at the possibility of purchasing your location. Interest rates will go up.”

In cautioning that a small business owner interested in acquiring a bank loan must be properly prepared, Alvarez shared a common scenario. “‘Businessman: I'd like to apply for a small business loan. Bank: How much would you like to borrow? Businessman: I don't know. How much can you lend me?' That's not the way to be successful in securing a business loan,” he noted. “You've got to do your homework, put a business plan together, and do a dry-run at the Entrepreneur Center.”

The Entrepreneur Center is located at 84 W. Santa Clara Street, downtown San Jose. They are open from 9 a.m. to 5:30 p.m.. The Business Information Center is open every Tuesday night until 8:30 p.m.

Affiliated with the San Jose Silicon Valley Chamber of Commerce, the Almaden Business Association is an organization designed to provide an association for business owners and professionals in the Almaden and Blossom Valley area. They meet the first Thursday of each month at a local restaurant, and can be contacted at almadenbizassn@pacbell.net.