Julio: Yeah. The Lord giveth and the Lord taketh. The way Congress works, the minute the clock strikes that money swiped out. It just goes back to treasury.
FEMA provides grants and assistance infrastructure and everything on a case of disaster, SBA steps in and provides the hard capital through a loan
Gene: And I do understand that there’s in the infrastructure bill and I’m not sure how much of this impacts the SBA, but a good part of the funding is to use unused COVID relief funds as part of the infrastructure bill. So that may have an impact on whether some money gets extended to next year. Before I turn it over to you, I just want to say to all of our listeners and viewers that this is like money that’s out there. It’s available for you. If you haven’t gotten an EIDL loan, you’re likely eligible for it. The whole country’s in a disaster area.
You can use it to pay down existing debt now to fix 30 year loan
And if you’re in any one of those economic opportunity areas where you can get up to a $15,000 grant, I mean, for goodness sake guys, let’s take advantage of this as soon as we possibly can or else the time’s going to run out. So Jon, let me turn it over to you. I know you’ve got some questions to ask Julio too.
Jon: Anytime. Yeah. I think it’s going to be a good conversation for our listeners, but aside from the COVID relief programs that we talked about a little bit, or kind of the emergency relief, I don’t know that 100% of small business owners or aspiring small business owners are really clear on like what the SBA does or what a local chapter of the SBA does. So can you talk to me a little bit about that? So kind of how someone might engage with you or what services you provide for small businesses.
Julio: The SBAs is not new. We’ve been around since the 1930s under the Reparation Act that was part of the depression era trying to recover from the Great payday loans in Lebanon Depression back in the 1930s, the present back then created an agency within the government to help businesses to get back up on their feet. This continued up through 1953 when the Eisenhower administration then basically along with Congress created the Small Business Act, which is really creating the Small Business Administration from that point of view. And within that act, there was this caveat within it that said 7A. And 7A basically is the ability to become a lender in various fashions. And the lending for business for instance, if you look at HUD, HUD does lending for residential owners. If you look at USDA, USDA provides capital for farmers. Well, the SBA then was created specifically to assist small businesses nationally. And through the Small Business Administration, which was created back then through amendments and changes and ratifications, we basically are where we are today.
And the way SBA is structured is that we provide capital to small business and under certain conditions, which are disaster conditions like we are now, or if FEMA, if there’s a presidential declaration for a disaster, SBA rises to that level of a lender. So we don’t provide the grant during a disaster. We provide the mechanism to provide you with cheap capital to help your business survive that disaster. Now, saying that in normal times, no disasters, nothing like that, then our bread and butter program is something called the 7A, that’s written into Congress. And what that is, is a guaranteed program. Every year congress has to approve, extend guarantees through various agencies, such as HUD, even the student loan funds, well SBA is in there.