SBA

Small Business Training Network

Interview with Carl Knoblock

by Ron Johnson

Ron Johnson: Welcome to SBA-Small Business Training Network, your small
business resource. I'm Ron Johnson.

If you are looking to start or expand an existing small business, SBA
has many programs and services to help you succeed. SBA has more than 43
courses, workshops, publications and direct access to its electronic
counseling through its virtual campus. You can check out the training at
[www.sba.gov/training](http://www.sba.gov/training). Across the country,
you will find SBA offices and its resource partners such as the small
business development center and women's business centers to help you
compete in the market place.

Today, we are discussing financing a business. Many entrepreneurs lack
the financial resources to start or expand a small business themselves,
so they seek financing from family, friends, venture capitalists, and
small business loans.

To answer some questions about financing a business, my guest today is
Carl Knoblock. He is the SBA District Director from Pittsburgh,
Pennsylvania. As a former small business owner, Carl understands
firsthand the issue related to financing a business. Welcome, Carl.

Carl Knoblock: Thank you, Ron. It is a pleasure to be here today.

Ron Johnson: What is the first step to securing a loan?

Carl Knoblock: Ron, what I tell small businesses or people that are
attempting to become a small business, I tell them the first priority is
to get a business plan because nobody will talk to them seriously until
they see something in writing. The reason for that are three key areas.
One is marketing. They want to see what the person wants to do and who
they go after for a target audience.

Also, financing. Typically people say, "I'm looking for money," but they
do not know the number, the dollar amount. And so with the business
plan, it helps put a firm number so people see what they are looking to
ask for.

And the most important piece is management. As we know, most businesses
fail in the first few years. That is because of poor management. And
with the business plan, it kind of gives a structure that you can see
where you are trying to head for future growth.

Ron Johnson: Where can someone get help putting a business plan
together?

Carl Knoblock: There are several areas. Ones that we typically hear
about, Score, who are retired executives who have diverse backgrounds
that can assist people. Small business development centers, they are
typically located in universities, also called SPDCs. Women business
centers and also veteran's business outreach centers are the ones that
offer either free or low-cost service. There are other services
available that you will pay a fee for.

Also you can purchase software to do it and then also you can do the
work through the internet. The difficult part is trying to get your
finances and your marketing information that you need. That is so
critical to putting the business plan together, and that is where the
first ones I mentioned are so valuable.

Ron Johnson: SBA's Business Loan Guaranty Programs provide a key source
of financing for viable businesses that have real potential but may not
be able to qualify for loans from traditional sources. So why is it
important for entrepreneurs to become familiar with SBA's financing
options?

Carl Knoblock: It is important from the standpoint that most of the time
we think of, when we are looking for help initially, we look to our
family, friends, famous credit cards to get us going. And with SBA's
different types of programs, it gives us other options to start thinking
outside the box, of other ways to finance my business, which also makes
you look at possibly going to your local economic development in your
area.

Also, some states have very good programs and working in combinations
with these different programs, you actually create a better package that
gives you better cash flow, which creates the opportunity to make your
business more successful.

Ron Johnson: What is SBA's primary financing program?

Carl Knoblock: The flagship program for SBA is a 7a Program. What is
unique about this program is it is very flexible. What I mean by that is
the funds that you receive can be used for a variety of things, from a
line of credit, equipment, purchase of real estate. There are many
different options this can be used for, and that is what so nice about
it.

Ron Johnson: Small businesses may also qualify for SBA express loans?

Carl Knoblock: Yes, Ron. The thing with the SBA express, it is a quick
turnaround. The maximum amount you can get is \$350,000. But the good
part is it is a quick turnaround because you are working closely with
the lenders, and so pretty much within less than 48 hours through SBA
you have an answer.

Ron Johnson: The 504 Loan Program is an economic development program
that supports American small business growth. Now this helps communities
through business expansion and job creation. What are the features of
this program and who qualifies?

Carl Knoblock: Ron, this is a great program from the standpoint of the
business owner only has to put 10 percent down. It is a long-term, tight
payback at a fixed rate, and for like equipment that is typically
maximum of 10 years, and for real estate up to 20 years. These are done
by certified development companies who are non-profit organizations that
assist you with this. What is really neat about this program also, it
can work in combination with other types of loan programs to create a
very nice package, to create a successful story for economic growth in
the community.

Ron Johnson: For more information on financing a small business, check
out SBA's website at [www.sba.gov](http://www.sba.gov/). For free
training programs covering topics such as accessing financial need, how
to find start-up funding, and basic accounting, go to
[www.sba.gov/training](http://www.sba.gov/training).

I would like to thank our guest, Carl Knoblock, SBA's District Director
from Pittsburgh, Pennsylvania for helping us understand the basic
financing needs of small businesses. I'm Ron Johnson.

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