SBA helps area small businesses grow, add locations

When David and Leslie Cowan needed a loan to build Cowan Route 66 Convenience Store in Strafford, they contacted Jamie Holstein, the president of Old Missouri National Bank in Springfield.

Like many small business owners, the Cowans lacked the collateral needed to obtain a conventional loan, so Holstein helped the couple apply for a Small Business Administration loan through the agency's office in Springfield.

The SBA has been helping small business owners like the Cowans since Congress founded the agency in 1953. The agency has a number of programs that help entrepreneurs get the information and expertise needed to make their small business a success. The SBA also helps entrepreneurs obtain the money needed to start, finance and expand their small business by guaranteeing a portion of the bank loan obtained through a local lender.

The SBA will guarantee as much as 85 percent of loans for up to $150,000 and 75 percent of loans more than $150,000. In most cases, the maximum guarantee

is $1 million, with a maximum loan amount of $2 million. By guaranteeing a portion of the loan, the SBA assures the lender that if the borrower fails to repay the loan, the government will reimburse the lender for a portion of its loss.

Small business owners in the Spring-field area obtain assistance through the SBA's branch office in Springfield, which is located at 830 E. Primrose, Ste. 101. The Springfield branch office's territory covers 28 counties in southwest Missouri. Needless to say, the folks at the local SBA office are busy. In fiscal year 2001 alone, the Springfield SBA branch guaranteed 291 loans totaling $55 million, said Janice Bowman, who serves as the office's public information officer.

"The paperwork involved with an SBA guaranteed loan is really no more than any lender should require for a commercial loan," said Bowman. "We've also streamlined the application process, in some cases, so the applicant will know right away whether or not they got the loan."

The Cowans agree. "There's a little more paperwork, but it's not bad," said Leslie Cowan. "We got our loan fairly quickly. I would recommend it to anyone, provided you work with the right banker."

Prior to receiving their SBA loan in August 2001, the Cowans ran a small Conoco gas station, which was located on old Route 66 in Strafford. The building, which was built in the 1930s, had started to show its age, and the business' location limited its growth potential.

"We needed a bigger location and a better location," said David Cowan. "Conoco did the research for us, and they told us where to relocate."

The Cowans took Conoco's advice and used their SBA loan to build a brand-new service station and convenience store just off the Strafford exit from Interstate 44. Once the new service station and convenience store were built, they closed their old gas station, moved into their new facility and changed their business' name from Cowan Route 66 Service Station to Cowan Route 66 Convenience Store.

Other small business owners, such as Brad and Frank Clark, seek out the SBA because they want to expand their business rapidly and open more than one location. In December 2001, the Clarks opened Smoothie King of the Ozarks, which is located at 3305 S. Campbell in Springfield. The company specializes in smoothies a cool, thick, creamy drink that's blended with real fruit and juices and nutritional supplements.

Less than six months later, the Clarks decided to add a second location on East Battlefield, which is scheduled to open in June. With the help of Robert Fulp, executive vice president at Signature Bank in Springfield, the Clarks obtained an SBA loan.

"The SBA loan was the best way for us to go," said Brad Clark. "We'd already used most of our financial resources to open the first store, and the SBA gave us the best option to expand."

According to Clark, getting the SBA loan provided them with another advantage. Should the Clarks decide to add more locations in the future, they will have an established credit record with the SBA.

Although the Clarks could have received research and planning assistance about opening a second location from the local Service Corps of Retired Executives (SCORE) chapter that works with the SBA, they relied on the guidance given to them by the Smoothie King franchise, which is based in the New Orleans, La. area.

"Our biggest challenge hasn't been financing, it's been getting the word out about Smoothie King," said Clark. "People down south are familiar with the chain, but nobody has really heard of it here in Missouri."

Smoothie King currently has 270 franchise locations in 29 states, but only four franchises are located in Missouri.

Getting the word out also is important for business owners like Larry Graham, who obtained an SBA loan to open Joey's Only Seafood and Tennessee Jack's Rotisserie Chicken and Ribs, a Canadian-based restaurant franchise that opened locally on Dec. 10, 2001.

"I did a little more paperwork, but I got a better interest rate with the SBA," said Graham, who obtained his loan with the help of Rick Watts, senior vice president at Empire Bank in Springfield.

Graham said he used the loan to

purchase equipment and modify and improve the building. Prior to opening Joey's Only in Springfield, which is located at 1645 W. Republic Road, Ste. G, Graham obtained an SBA loan to open Fazoli's, a fast-food Italian restaurant. The restaurant is part of franchise based in Lexington, Ky. Graham currently owns three Fazoli's two in Spring-field and one in Joplin.

"Going with the SBA certainly makes things easier with the bank, especially if you're just getting started and have no history," Graham said.