Panera's Powerful Message: SBA Loans Can Make a Difference

Every so often, I'm reminded of the power of SBA loans.

Some of the country's largest companies got off the ground thanks to an injection of small business funding through one of the U.S. Small Business Administration's finance programs. That list includes companies like Apple, Intel and AOL.

I also just recently learned that one of my favorite lunch haunts, Panera Bread Co., started with a $150,000 investment from entrepreneur Ken Rosenthal coupled with another $150,000 in an SBA loan. The St. Louis resident opened his first bakery on one of the most ominous days of the last 25 years -- the "Black Monday" stock market crash of Oct. 19, 1987.

But Rosenthal weathered the storm and opened 19 more stores in six years. Six years later, he sold his company to a national café chain for $24 million. Rosenthal later became one of the company's largest franchisees, with 76 stores and counting.

Today, the company he started with an SBA loan has morphed into 1,300 locations with annual revenue topping $1.3 billion.

His story is an excellent window into the potential and promise of government loans. More importantly, this is a great time to tap into SBA funding.

U.S. entrepreneurs have already seized $375 million in economic stimulus money devoted to the SBA. There's more funding in place through February, and the Obama administration has pushed lenders nationwide to boost lending to small businesses.

The SBA operates several key lending opportunities for entrepreneurs. Here's a brief look at a trio of important options for small businesses:

The 7(a) Program
This is the SBA's most popular loan program. It guarantees loans up to 90 percent. Loans under this program can be used for a variety of things, including buying real estate or equipment, refinancing and renovation work.

The 504 Program
This program helps business owners gain long-term, fixed rate loans for major assets, such as real estate or buildings. Borrowers are required to put up at least 10 percent equity. This program comes with more restrictions on uses than the 7(a) program.

Small Business Investment Companies
The SBA licenses these private venture capital firms, which can use both private and public dollars to support qualified small businesses. Apple, Intel and AOL all got a big boost from Small Business Investment Companies, or SBICs.

To learn more about the SBA's loan programs, visit the agency's website. You can also check out the helpful SBA Loan Guide created by SBALoans.com.

About the author

Chris Birk, a former newspaper and magazine writer, works for Missouri-based GrowthPartner.com, a unique firm that provides angel investment and online marketing expertise to emerging companies. He is also a principal with SuretyBonds.com and a part-time college professor.

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