Starting from scratch: programs are in place to help women- and minority-owned businesses get the loans they need to start or expand their businesses.

AuthorOrr, Vanessa
PositionSmall Business Administration provides finance to small businesses and startups

Alaskans are an independent lot, and one of the places where this is most often seen is in the business world where hundreds of people decide to start their own companies each year. An estimated 629,000 small businesses were active in Alaska in 2003, many of them started by women and minorities.

According to the U.S. Department of Labor's Bureau of Labor Statistics, self-employment by women grew in Alaska from 11,514 in 2002 to 12,732 in 2003; an increase of 10.6 percent. The Center for Women's Business Research reported an estimated 21,789 privately held, 51 percent-or-more women-owned firms in the state in 2004, which generated $3.5 billion in sales and employed 30,159 people.

Minority-owned businesses also played a significant role in Alaska's economy. Census Bureau statistics show these businesses numbered 10,900 in 1997, and pumped $2.2 billion into state coffers. Of these businesses, 1,400 were Hispanic-owned, 900 African-American-owned, 1,800 Asian-and Pacific Islander-owned, and 6,800 American Indian- and Alaska Native-owned.

But how does a small business get started? And what, if any, programs are available to help entrepreneurs-specifically women and minorities become part of Alaska's business community?

The Small Business Administration

In 1953, the Small Business Administration, or SBA, was established to maintain and strengthen the nation's economy by aiding, counseling, assisting and protecting the interests of small businesses, as well as to help families and businesses recover from national disasters.

"The primary services we offer are in the areas of access to capital, training and counseling, and government contracting," explained Sam J. Dickey, lead marketing and outreach specialist for the SBA. "We also have an active advocacy program designed to help lessen the regulatory burden on small businesses."

According to Dickey, while most small business start-ups get their money from banks, there are many programs in place to help them secure these funds. "A bank may not be thrilled with a project, or it might be outside its normal line of business; there are a lot of factors that can prevent a small business from getting a loan," he explained. "But there are a number of programs that can provide these start-ups with special assistance, especially in certain markets."

The SBA's primary loan program is the Basic 7(A) Loan-Guaranty program, which guarantees financing for a variety of general business purposes. SBA can guarantee as much as 85 percent on loans up to $150,000 and 75 percent on loans greater than that amount. The agency also offers a 504 Certified Development Company program, which provides businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. For loans under $10,000, the SBA offers micro-loans through the Women's Business Center, as the only micro-lender in Alaska.

In 2004, the SBA made 127 loans in Alaska, with a value of approximately $38 million. This is an increase from...

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