NETWORK WORLD STEVE ULFELDER'S SOHO LIFE
08/25/04
Today's focus:  Uncle, can you spare a dime?

Dear [EMAIL PROTECTED],

In this issue:

* Don't overlook the Small Business Administration's loan 
��program
* Links related to SOHO Life
* Featured reader resource
_______________________________________________________________
This newsletter is sponsored by Alterpoint 

Read the latest analyst report on Network Change and 
Configuration Management (NCCM) written by EMA's Dennis 
Drogseth.  This report discusses the latest developments in the 
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_______________________________________________________________
CONTEMPLATING A CAREER MOVE? 

For many of us, it is time to contemplate a change. You're great 
at managing networks, but what about your career? Get 
information and advice for managing and developing your career 
and guiding your staff's career choices at NW Fusion's Career 
Research Center. Click here: 
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_______________________________________________________________

Today's focus:  Uncle, can you spare a dime?

By Steve Ulfelder

Small-business owners don't want a handout, especially from the 
government. But if you're looking to launch a new business or 
expand an existing one, you ought to know about the U.S. Small 
Business Administration's 7(a) Loan Program (see editorial link 
below).

It's not a handout. Indeed, it's not even a loan. Rather, it's a 
fund (fattened by your tax dollars) that increases your chances 
of getting a loan from a bank.

First, let's work through the reasons you may have for 
dismissing 7(a). Nearly all entrepreneurs and home-based 
businesspeople I know succeed in spite of, not because of, the 
government, and are proud of it

We are fillers, not emptiers, of federal and state coffers. We 
pay double Social Security taxes even though Social Security may 
be broke when we're ready to collect. We save every receipt to 
keep the IRS at bay. Many of us pay preposterous fees to the 
towns we live in for the privilege of earning a living in our 
basement offices. Heaven forbid we violate code!

In return, all we ask is that the government fill the worst of 
the potholes and teach our kids a state capital or two.

Well, here's the big Dr. Phil moment: I hereby give you 
permission to ask your government for a little more.

One of the most popular offerings of the 51-year-old Small 
Business Administration ( <http://www.sba.gov/> ) is the 7(a) 
Loan Program. Most, but not all, U.S. banks participate, as do 
many other financial institutions, such as credit unions.

Under the program, a small-business owner applies for a loan at 
a participating institution. If the bank believes the 
risk/reward ratio is acceptable, the loan goes through on a 
conventional basis. If the loan looks shaky, but not 
outrageously so, the 7(a) program kicks in. In such a case, the 
bank can request that if the borrower defaults, the SBA 
reimburse a percentage (up to 75%) of its loss. The program 
amounts to risk mitigation for lenders, which frees them to 
green-light more loans.

To qualify for a 7(a) loan, borrowers and lenders alike must 
meet reasonable criteria. The SBA has adopted a flexible 
definition of "small business" ( 
<http://www.sba.gov/financing/subfiles/size.html> ) - trust me, 
if you're reading this, you qualify. Only for-profit enterprises 
qualify, and I'm afraid that if you're out on parole and/or 
launching a pyramid scheme, you'll have to look elsewhere.

Interest rates on 7(a)s are negotiated by borrower and lender, 
but in order to participate, banks must agree to caps set by the 
SBA. Pegged to the Prime Rate, the caps vary depending on the 
amount and maturity of the loan. The maximum size of a 7(a) loan 
is $2 million.

Have I wet your whistle for a 7(a)? If so, you're in good 
company. A few weeks ago, the SBA announced the program had 
guaranteed a record 67,493 loans in fiscal 2004, topping 2003's 
total by 23%. I'd apply myself except for the dang parole thing.

RELATED EDITORIAL LINKS

SBA's 7(a) Loan Program
http://www.sba.gov/financing/sbaloan/7a.html
_______________________________________________________________
To contact: Steve Ulfelder

A journalist since 1986, Ulfelder writes about technology, 
business and automobiles from his home office in Southborough, 
Mass. His work appears in Network World, Computerworld, CIO, The 
Boston Globe, Grassroots Motorsports and others. You can contact 
him at <mailto:[EMAIL PROTECTED]>.
_______________________________________________________________
This newsletter is sponsored by Alterpoint 

Read the latest analyst report on Network Change and 
Configuration Management (NCCM) written by EMA's Dennis 
Drogseth.  This report discusses the latest developments in the 
NCCM market, including an in-depth look at DeviceAuthority 
Suite, a comprehensive solution for configuring, changing, and 
controlling today's complex, multi-vendor IT network 
infrastructures.   Download the report today to learn how you 
can leverage NCCM to reduce the cost and complexity of managing 
network change. 
http://www.fattail.com/redir/redirect.asp?CID=73273
_______________________________________________________________
ARCHIVE LINKS

Archive of the SOHO Life newsletter:
http://www.nwfusion.com/net.worker/columnists/

Breaking telework and SMB news:
http://www.nwfusion.com/net.worker/
_______________________________________________________________
FEATURED READER RESOURCE
WONDERING IF YOUR PAY IS UP TO SNUFF?

Check out Network World's 2004 Salary Calculator to see if 
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the 2004 Network World Salary Survey, we've programmed this 
calculator with several categories that could affect your pay. 
Answer the questions and find out what the average salary is for 
your job category. Click here:
<http://www.nwfusion.com/salary/2004/calculator.html>
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