5,000-Plus Small Business Jobs Act Loans Approved in First Month

This morning, Karen Mills [pictured], who heads the U.S. Small Business Administration, announced some of the impressive effects that the Small Business Jobs Act of 2010 has yielded thus far.

"Just one month after the President signed the Small Business Jobs Act, SBA has supported nearly $3 billion in loans to more than 5,000 small businesses across the country," Mills noted. "That’s more than 5,000 small-business owners who’ve felt firsthand, within one month, the impact this new law is having on our economy."

Two examples cited by Administrator Mills:

* Peabody Engineering, a tank and fiberglass manufacturer in Southern California, that is using a Jobs Act loan to hire 10 more workers; and

* Caudill Web Inc., based in Washington, D.C., who will use their Jobs Act loan to hire more programmers to meet increased demand.

"So, how did we do it?" Mills asked. "With the Recovery Act, we learned that raising the guarantee and waiving the fees in SBA’s top two loan programs was a formula for success. With the Recovery Act funding and extensions of funding from Congress, we turned just $680 million in taxpayer dollars into nearly $30 billion in lending support through our lending partners.

"That’s a big bang for the taxpayer buck. The Jobs Act builds on that success by extending those same loan enhancements.

"This is a critical investment in America’s biggest job creators and in the strongest engine of economic recovery: entrepreneurs and small-business owners. By unlocking loans for these small businesses, we are providing them with the tools they need to grow their business and create new jobs in their local communities.

"In all, we estimate the $505 million provided in the Jobs Act for these loan enhancements will support about $14 billion in small-business loans. That’s a $14 billion boost for America’s small businesses and just one of the reasons that the passage of this new law was a top priority for President Obama.

"The Jobs Act also includes $12 billion in tax credits targeted specifically to small businesses, and a $30 billion lending fund that will help small, community banks increase their lending to local small-business owners and entrepreneurs.

"As the President has said, government can’t guarantee the success of a small business, but it can knock down some of the barriers that stand in the way and help create the conditions where small businesses can grow and hire. The Small Business Jobs Act is a critical tool to help us do just that, and we are already seeing its impact with the loans SBA approves every day."

To learn more facts about how small businesses are benefiting from the Small Business Jobs Act, visit http://www.sba.gov/jobsact.

* * *

GoodBiz113's Take: Regardless of the relentlessly negative and downright deceitful rhetoric of those who want to see President Barack Obama and his Administration fail, statistics prove that his policies are gradually boosting small-business interests and getting people back to work.

To folks on both sides of the political aisle, and anywhere in-between, we advise: Be patient. Remember that President Obama has only been in the White House for 21 months -- and he had one helluva mess to clean up when he arrived there.

Signing the Small Business Jobs Act of 2010 was just one of countless positive steps that this Administration has taken thus far in order to get all of America moving forward again. If naysaying members of Congress would simply check their politics, egos and inertia at the door, and actually work with their do-something colleagues for the greater win-win-win good, then our nation can continue on the productive course that President Obama and his truly dedicated and apt Administration and Cabinet members have only just begun to chart.

SOURCES: U.S. Small Business Administration, The White House
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Verbatim: Small Business Fuels Discourse During 2010 Midterm Election Campaigns

Periodically, GoodBiz113 puts its ear to the rail to listen to what politicos, pundits and others have recently said about small businesses and our integral role in growing the U.S. economy. Today, just eight days before the critical 2010 midterm elections, we share some views with you, our loyal readers.

* * *

"Now, I want to just say a little bit about Ron, because so much of the reason we're here is to make sure that he continues to do the outstanding work that he's doing on behalf of south Florida. They have lived here for 25 years. This is where they raised their family...

"This is where Ron helped run a small business. That's who he's been fighting for since he got to Washington -- families and small business owners -- because he's part of them, he understands them." -- President Barack Obama, on a campaign stop in South Florida to support second-term Rep. Ron Klein [D.-Fla.], who aims to beat back challenger Allen West [Miami's CBS4.com, Oct. 11]

* * *

"The Small Business Jobs Act is helping the private sector move the ball forward on job creation and economic growth... I'm pleased to see these SBA loans made to local businesses, and I expect that this law will continue to expand private-sector lending in the near term through the incentives it provides for small community lenders." -- Rep. Tim Walz [D-Minn.], teaming with Sens. Amy Klobuchar and Al Franken [D-Minn.], and Reps. Betty McCollum and Keith Ellison [D-Minn.] to announce that more than $18 million in loans will go to small businesses throughout Minnesota, helping many of them remain open and creating nearly 100 jobs [TradingMarkets.com, Oct. 11]

* * *

"Spending within our means, looking at our long-term structural deficits, supporting small businesses." -- Small-business owner-turned-Congresswoman Betsy Markey [D-Col.], summing up her top goals as she seeks a second term representing citizens of Colorado's Fourth District [Capital News Connection, Oct. 15]

* * *

"I'm working with your local leaders to provide the kinds of investments to create jobs, so you're strong again and our Main Street businesses keep their doors open." -- Three-term U.S. Senator Patty Murray [D-Wash.], who has helped secure millions of dollars to repair Howard A, Hanson Dam and replace Seattle's South Park Bridge [Seattle Times, Oct. 17]

* * *

"If Republicans in Congress have their way, the millions of women who will benefit from our small-business lending programs -- from the consumer protections in the Financial Reform bill, and from the tax cuts that have helped them through a challenging economic time -- would be left without these benefits... There is an important choice for women in this country to make about whether that is the direction they want the country to move in." -- White House Deputy Communications Director Jen Psaki [ABC News, Oct. 18]

* * *

"The President knew when he came into office that he was going to have to take immediate and bold action, or we might fall down in a hole that we could not get out of. The President takes office in January of 2009. And within 30 days, passes the Recovery Act.

"Now, in the first 100 days of the Recovery Act, that gives tax relief to more than 110 million people, cuts taxes for small business eight different times. In that 100 days, authorizes 3,000 transportation projects, starts on the path to improvement...

"And it doesn’t stop with the Recovery Act. Already this year, the President signed the HIRE Act, which gives specific incentives for companies to hire people who have been unemployed for a period of time, and gets through the Small Business Jobs Act, which brings up to 16 the number of times he cut taxes for small business, reduced the capital-gains rate to zero for anybody starting their own business or investing in a small business." -- Austan Goolsbee, chairman of the Council of Economic Advisers, during the second edition of his White House White Board [White House, Oct. 19]

* * *

"I look at the jobs issue as a step-by-step process. The Recovery Act stopped our economy from going off a cliff and saved the jobs of millions of teachers, police, firefighters, first responders and others. I also have seen firsthand how it has created private-sector jobs across Wisconsin -- whether it is building a new bridge in Medford, a water sanitation system in Wisconsin Rapids, or a senior center in Plymouth.

"The next step was the HIRE Act, which gave businesses that hired workers that had been unemployed for 60 days a tax break.

"And now we have passed the Small Business Jobs Act to free up credit, so small businesses -- responsible for the majority of job creation in our country -- can expand and create jobs.

"I want to continue these targeted efforts with a jobs tax credit, which would extend and expand the HIRE Act tax break by making any business that hires new workers, expands hours or expands payroll, eligible for a tax break. As we continue to recover from the worst recession since the Great Depression, this type of tax break will help businesses next year when they are in a better position to hire." -- U.S. Senator Russ Feingold [D-Wis.], during a Q&A interview [Telegraph-Herald Online, Oct. 21]

* * *

"I think that would be a terrible mistake... Our economy depends on a financial system in which everyone competes on a level playing field, and everyone is held to the same rules—whether you’re a big bank, a small-business owner, or a family looking to buy a house or open a credit card." -- President Barack Obama in his weekly address, warning that if Republicans take control of Congress this November, they would repeal consumer protections in the Frank-Dodd financial regulatory reform legislation, which he called "one of the most important victories" he has achieved in office. [Weekly Address, Oct. 23]

* * *

"Clark, an attorney and mother of two, is a respected legislator from St. Cloud who was first elected in 2005. Endorsed by Democratic Sen. Amy Klobuchar, Clark has been a strong advocate for small-business owners, and pushed for the development of angel investor tax credits in the state." -- Editorial endorsement of Tarryl Clark [D-Minn.], who is challenging two-term U.S. House Rep. Michelle Bachmann [R-Minn.] to represent voters in Minnesota's Sixth District [Star Tribune endorsement, Oct. 24]

* * *

"Barbara Boxer's top priority is to create jobs and turn our economy around. She is fighting to provide more loans to small businesses, provide tax breaks to the middle class, cut our deficit in half by 2013, rebuild our roads and bridges and make California the hub of the new clean-energy economy.

"With so many people out of work, it's shocking that her opponent still wants to go back to the job-killing policies of yesterday. Polices that led to 700,000 job losses a month and the crisis on Wall Street due to deregulation.

"Boxer is working hard to reverse those policies and replace them with smart, targeted initiatives that create jobs here at home -- jobs for today and tomorrow...

"Boxer knows that small businesses are the lifeblood of strong local economies. This is why she supported the Small Business Jobs Act, so that small businesses can expand and create jobs. This legislation includes a provision based on a bill authored by Boxer that would create a $30 billion small business lending fund to help community banks extend credit to small businesses.

"The legislation will help small businesses compete for large federal contracts, increase the maximum size of SBA-backed loans and reduce the fees associated with these loans. The bill also includes $12 billion in tax incentives to help small and medium-sized businesses expand and create new jobs.

"Boxer strongly supported the economic Recovery Act that will help provide nearly 65,000 small-business loans, including 9,600 loans to Californians worth $5.2 billion in lending authority. These loans will make it possible for successful small businesses to expand, hire more employees and further stimulate our local economy." -- Former San Jose Mayor Susan Hammer [1991-1998], endorsing U.S. Senator Barbara Boxer [D-Cal., pictured above with supporters] for a fourth term in the U.S. Senate [San Jose Mercury News, 10/24/2010]

SOURCES: ABC News, GovTrack.us, OpenCongress, San Jose Mercury News, Seattle Times, StarTribune,com, Telegraph-Herald.com, The White House
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Businesses That Plan Ahead May Have a Better Chance of Accessing Billions in New Small-Business Loans, Study Says

A recently reissued study reports that business plans can make the difference between getting and not getting a loan, or securing investment capital.

The small-business legislation that President Obama recently signed into law was good news for small businesses looking to access a newly established $30 billion loan fund.

It’s even better news for small businesses who took the time to complete a business plan, according to the results of a recently reissued June 2010 study conducted by researchers affiliated with the University of Oregon Department of Economics.

The paper found that companies completing business plans were twice as likely to successfully grow their business, get investment capital, or land a loan. Researchers examined data on nearly 3,000 users of business plan software.

"The bottom line is that completing a plan correlated with increased success in every one of the business objectives that came up in the study," said Tim Berry [pictured], founder of GoodBiz113 ad partner Palo Alto Software, and author of the business planning software Business Plan Pro.

The news comes at a time when the Small Business Administration estimates more than a half-million businesses fail annually.

Despite the tough climate businesses are facing, there are loans available for small-business owners -- many of them at record-low interest rates. But with less capital available, more companies are fighting for a smaller piece of the pie, and smart businesses are finding that it pays to be prepared with a plan. With talk of a double-dip recession and other uncertainty clouding the air, business planning has become less a one-time event and more of an ongoing process, business experts say.

"It is important to remember that business plans are living documents," Berry noted. "Those who take the time to complete a plan, follow it, and update it often are most likely to be successful."

Patricia Schaefer, of BusinessKnowHow.com, cites lack of planning as one of her top seven reasons why small businesses fail. And in a challenging business environment, completing a plan properly is just as important as having a plan in the first place.

"[A plan] must be realistic and based on accurate, current information and educated projections for the future," she writes. "Many small businesses fail because of fundamental shortcomings in their business planning."

The Oregon study looked specifically at planning completed, using business plan software. Researchers Eason Ding and Tim Hursey -- who prepared and presented the paper as part of the requirements for their honors degrees, under the supervision of professor Joe Stone -- looked at a questionnaire answered by 2,877 respondents. Of those people, 995 had completed a plan, and:

* 297 of them [36 percent] secured a loan
* 280 of them [36 percent] secured investment capital
* 499 of them [64 percent] had grown their business.

The study found that, among firms of varying ages, the amount of business planning was related to success. Ding and Hursey also found that Web-based firms had "a significant correlation of success with business planning."

The study did not examine differing rates of success between individual firms. Across the board, businesses completing plans scored higher -- suggesting that, with the right planning, craft beer brewers or tattoo parlor owners could achieve success as readily as lawyers or medical professionals.

Results suggest that business planning "is highly correlated with subsequent successes for a variety of firms," the paper states.

About Palo Alto Software
Palo Alto Software Inc. helps people succeed in business. It develops, publishes and markets software products for small businesses and entrepreneurs.

Its suite of products includes Business Plan Pro, the best-selling business-planning software in the U.S.; Marketing Plan Pro powered by Duct Tape Marketing; Email Center Pro; and their newest product, Start, Run & Grow Your Business. Email Center Pro is Palo Alto Software’s first SaaS product, an online e-mail management tool for small businesses.

Palo Alto Software also runs a website network, which includes http://www.bplans.com/ -- one of the highest-trafficked business planning content sites in the world. Its website network receives approximately 1 million unique visitors per month and offers users unique, valuable content and free business planning tools.

Tim Berry, the founder of Palo Alto Software and a co-founder of Borland International, is a recognized expert in business planning. His popular Planning, Startups, Stories blog is featured on AllTop Small Business. He also writes the Up and Running blog for Entrepreneur.com and contributes regularly to Business in General, All Business, the Huffington Post, and other publications.

For more information, visit http://www.paloalto.com/ or call [800] 229-7526.

SOURCE: Palo Alto Software Inc.
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President Obama on Infrastructure Investment: "This is Work That Needs to Be Done. There Are Workers Who Are Ready to Do It."

During tough economic times, one of the toughest jobs to hold is as a construction worker. In almost any city or town in America, you're likely to see buildings, projects, or roads left half-done after investments made by private enterprise or state and local governments -- based on expectations of a brighter economic future -- dried up.

Meanwhile, there is a near-universal consensus that America's infrastructure is both falling apart and lagging behind as our competitors move forward on the next generation of transportation.

That's part of why a new report from the Council of Economic Advisers [CEA] and the Treasury Department [pdf] encourages a bold, new plan to invest -- finding that infrastructure projects have a high bang for the buck because construction costs are low, due to underutilized resources, and that these investments would create jobs in sectors of the economy suffering from some of the highest levels of unemployment. The Recovery Act already created hundreds of thousands of jobs this way, but there is more than enough left to do.

After meeting with some of his Cabinet secretaries -- along with a bipartisan group of former secretaries of Transportation, mayors and governors who have come together in support of infrastructure investment -- President Obama [pictured with the group outside the White House] spoke both on the depth of the problem and value of the solution.

On the Problem...
"For years, we have deferred tough decisions, and today, our aging system of highways and byways, air routes and rail lines hinder our economic growth. Today, the average American household is forced to spend more on transportation each year than food.

"Our roads, clogged with traffic, cost us $80 billion a year in lost productivity and wasted fuel. Our airports, choked with passengers, cost nearly $10 billion a year in productivity losses from flight delays. And in some cases, our crumbling infrastructure costs American lives. It should not take another collapsing bridge or failing levee to shock us into action.

"So we’re already paying for our failure to act. And what’s more, the longer our infrastructure erodes, the deeper our competitive edge erodes.

"Other nations understand this. They are going all-in. Today, as a percentage of GDP, we invest less than half of what Russia does in their infrastructure, less than one-third of what Western Europe does.

"Right now, China’s building hundreds of thousands of miles of new roads. Over the next 10 years, it plans to build dozens of new airports. Over the next 20, it could build as many as 170 new mass transit systems.

"Everywhere else, they’re thinking big. They’re creating jobs today, but they’re also playing to win tomorrow. So the bottom line is, our shortsightedness has come due. We can no longer afford to sit still."

On the Solution...
"By investing in these projects, we’ve already created hundreds of thousands of jobs. But the fact remains that nearly one in five construction workers is still unemployed and needs a job. And that makes absolutely no sense at a time when there is so much of America that needs rebuilding.

"So that’s why, last month, I announced a new plan for upgrading America’s roads, rails and runways for the long-term.

"Over the next six years, we will rebuild 150,000 miles of our roads -- enough to circle the world six times. We will lay and maintain 4,000 miles of our railways -- enough to stretch from coast to coast. And we will restore 150 miles of runways and advance a next-generation air-traffic control system that reduces delays for the American people.

"This plan will be fully paid for. It will not add to our deficit over time. And we are going to work with Congress to see to that. It will establish an infrastructure bank to leverage federal dollars and focus on the smartest investments.

"We want to cut waste and bureaucracy by consolidating and collapsing more than 100 different, often duplicative programs. And it will change the way Washington works by reforming the federal government’s patchwork approach of funding and maintaining our infrastructure.

"We’ve got to focus less on wasteful earmarks, outdated formulas. We’ve got to focus more on competition and innovation; less on shortsighted political priorities, and more on our national economic priorities.

"So investing in our infrastructure is something that members of both political parties have always supported. It’s something that groups ranging from the Chamber of Commerce to the AFL-CIO support today. And by making these investments across the country, we won’t just make our economy run better over the long haul -- we will create good, middle-class jobs right now."

* * *

GoodBiz113's Take: Between 1935 and 1943, President Franklin Delano Roosevelt's Works Progress Administration [aka Work Projects Administration, or WPA] put nearly eight million people to work on much-needed public works projects that reshaped America's infrastructure -- all while benefiting individuals, families, small businesses, corporations and communities from coast to coast.

In their joint report released today, Department of Treasury and CEA officials present a compelling case for taking action ASAP to invest financial resources in another historic infrastructure-building initiative that will serve short-term employment needs, as well as our nation's long-term transportation and economic-development needs.

Let's just hope that, 70-plus years later, the petty partisanship that nearly blocked FDR's far-reaching efforts doesn't rear its ugly head yet again by trying to obstruct common-sense, future-forward progress.

SOURCES: Council of Economic Advisers, Treasury Department, The White House [photo by Lawrence Jackson], Wikipedia
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SBA Finalizes Revisions of Size Standards to Expand Opportunities for Small Business

Today, the U.S. Small Business Administration published a package of revised size definitions for three broad commercial sectors affecting businesses in retail trades, accommodations and food services, and other services.

The changes were proposed on Oct. 21, 2009, and will broaden small-business eligibility, and help them gain access to SBA’s financial assistance, contracting and other programs. The agency estimates as many as 17,000 additional firms will become eligible for SBA programs as a result of the revised size standards.

"These increases in the size standards mean more of America’s small businesses will be eligible for, and can access, the resources and services the SBA and other federal agencies have available," said SBA Administrator Karen G. Mills [pictured]. "This comprehensive review is aimed at making sure the factors that determine eligibility are aligned with current economic and industry indicators, and ensure that small businesses across the country have the tools they need to drive economic growth and create jobs."

Last year, SBA began the process of reviewing and updating size standards based on industry-specific data. Before this comprehensive review, the last overall review of size standards occurred more than 25 years ago. Since then, most reviews of size standards have been limited to in-depth analyses of specific industries at the request of the public and federal agencies.

The SBA also makes periodic inflation adjustments to its dollar-denominated size standards. The latest inflation adjustment to size standards was published in the Federal Register on July 18, 2008.

Under provisions in the Small Business Jobs Act of 2010, SBA will continue its comprehensive review of all size standards for the next several years, as the law specifies.

The three final rules will affect the following industries:

Sector 44-45, Retail Trade [RIN: 3245-AF69]
In retail trade, a change in the new-car dealer industry from a revenue-based standard of $29 million in average annual receipts to an employee-based standard of 200 employees, will allow 5,700 additional new-car dealers to become eligible for small-business programs and services. Also, size standards were increased for 46 industries under retail trade. SBA estimates that more than 14,400 retail firms will become eligible for small-business programs and services.

Sector 72, Accommodation and Food Services [RIN: 3245-AF71]
Size standards were increased for five industries. SBA estimates 2,050 additional firms will become eligible for small-business programs and services.

Sector 81, Other Services [RIN: 3245-AF70]
Size standards were increased for 18 industries. SBA estimates more than 1,400 additional firms will become eligible for small-business programs and services.

For more information about SBA’s revisions to its small-business size standards, visit http://www.sba.gov/size and click on "What’s New."

SOURCES: Library of Congress, U.S. Small Business Administration
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SBA Loan Queue Cleared One Week After President Obama Signs Jobs Act

All of the loan applications placed in the U.S. Small Business Administration’s loan queue by small-business borrowers have received final approval, SBA Administrator Karen Mills announced today. The approvals, which were completed Monday, amount to 1,939 loans for nearly $970 million.

Final approval follows President Obama’s signing of the Small Business Jobs Act of 2010 on Sept. 27, which provided funding for the extension of increased guarantees and reduced fees in SBA’s two largest loan programs. Small-business owners have been waiting for additional funding and putting applications in the queue since the end of May, when authority for higher loan guarantees expired and, soon after, previous Recovery loan funding was exhausted.

Of the approvals in the queue, SBA approved more than $586 million through 1,273 new loans with funds provided by the Small Business Jobs Act, and 666 loans for more than $383 million with earlier funding that became available after cancellations of applications that had been approved previously under Recovery Act loan terms -- most, because they had been withdrawn by the applicants.

"Enhancements first made under the Recovery Act have made SBA-backed loans a key source of much-needed capital for tens of thousands of small-business owners, helping them not just keep their doors open, but also grow and create jobs all across the country," said Mills.

"Beginning in May, we saw the SBA loan queue begin to grow, which was evidence of both the continued need for these tools and the challenges small-business owners face in getting loans," Mills noted. "Within days of the President’s signature, the authority and the funding provided in the Small Business Jobs Act have allowed us to clear out our loan queue and begin getting capital in the hands of the more than 1,900 small-business owners who had been waiting -- some, for most of the summer."

Mills pointed out that the Small Business Jobs Act will support an estimated $14 billion in lending with only $505 million in taxpayer funds -- including many of the loans approved from the queue.

The loan enhancements for SBA-backed financing were key incentives in helping revive the availability of capital for small businesses after the credit crunch in late 2008 and early 2009. The increased guarantees and reduced fees in SBA’s two largest lending programs sparked a significant turnaround in SBA lending and have been instrumental in helping jump-start the economy for small businesses.

From the passage of the Recovery Act in February 2009 through the end of September, these incentives for borrowers and lenders helped support nearly $30 billion in SBA-backed loans to nearly 70,000 small businesses.

The SBA re-opened its loan queue in May, when funding for the incentives was nearly exhausted. Small-business loan applicants who wanted the benefits of the incentives could choose to place their loan in the queue to await funding from either an extension of the enhancements by Congress, or funds coming available as a result of cancellations of previously approved Recovery loans.

By the time President Obama signed the Small Business Jobs Act on Sept. 27, more than 1,400 "conditionally" approved small-business loan applications were in the queue’s waiting list -- with more than 500 more choosing to go into the queue by Oct. 1. With funds provided in the Small Business Jobs Act, SBA began making "final" approval of remaining loans in the queue on Oct. 1.

SOURCES: Library of Congress, U.S. Small Business Administration
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SBA Releases Final Women-Owned Small Business Rule to Expand Access to Federal Contracting Opportunities

With today's publication of a final rule in the Federal Register, the U.S. Small Business Administration will begin implementation of its women-owned small business [WOSB] contracting program. The agency expects the program to be available for WOSBs in early 2011.

The rule is part of the Obama Administration’s overall commitment to expanding opportunities for small businesses to compete for federal contracts -- in particular, those owned by women, socially and economically disadvantaged persons, and veterans.

This rule identifies 83 industries in which WOSBs are under-represented, or substantially under-represented, in the federal contract marketplace. In addition to opening up more opportunities for WOSBs, the rule is also another tool to help achieve the statutory goal that five percent of federal contracting dollars go to women-owned small businesses.

"Women-owned businesses are one of the fastest-growing sectors of our nation’s economy, and even during the economic downturn of the last few years, have been one of the key job-creation engines in communities across the country," said SBA Administrator Karen Mills [pictured].

"Federal contracts provide critical opportunities for owners of small firms to take their business to the next level and create good-paying jobs," Mills added. "Despite their growth and the fact that women lead some of the strongest and most innovative companies, women-owned firms continue to be under-represented in the federal contracting marketplace. This rule will be a platform for changing that by providing greater opportunities for women-owned small businesses to compete for, and win, federal contracts.”

With the publication today of the final rule, SBA -- in conjunction with the Federal Acquisition Regulatory Council -- will begin a 120-day implementation of the WOSB contracting program, including building the technology and program infrastructure to support the certification process and ongoing oversight. With implementation expected to take several months, the agency expects that federal agencies’ contracting officers will be able to start making contracts available to WOSBs under the program in early 2011.

The creation of a rule to increase federal contracting opportunities for WOSBs was authorized by Congress in 2000. Since that time, SBA took a number of steps to study and analyze the market -- including looking at participation by women-owned small businesses across all industries.

Various draft rules were made available for public comment in prior years, but shortly after taking office, the Obama Administration drafted a new, comprehensive rule, based on the analysis of the prior studies and on all the questions and comments previously received. The proposed rule was published for public comment on March 2, 2010, for 60 days. SBA received over 1,000 comments during that time.

Some of the components of the Women-Owned Small Business rule include:

* To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens. The firm must be "small" in its primary industry, in accordance with SBA’s size standards for that industry. In order for a WOSB to be deemed "economically disadvantaged," its owners must demonstrate economic disadvantage in accordance with the requirements set forth in the final rule.

* Based upon the analysis in a study commissioned by the SBA from the Kauffman-RAND Institute for Entrepreneurship Public Policy, the final rule identifies 83 industries [identified by "NAICS" codes] in which women-owned small businesses are under-represented or substantially under-represented in federal procurements.

* The SBA has identified eligible industries based upon the combination of both the "share of contracting dollars" analysis, as well as the "share of number of contracts awarded" analysis used in the RAND study. This differs from an earlier proposed version of the rule, which identified only four industries in which women-owned small businesses were under-represented. This earlier version proposed to identify eligible industries based solely on the "share of contracting dollars" analysis used in the RAND study.

* In accordance with the statute, the final rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing contracts, and $3 million in the case of other contracts. Contracts with values in excess of these limits are not subject to set-aside under this program.

* The final rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.

* The proposed rule allows women-owned small businesses to self-certify as "WOSBs" or to be certified by third-party certifiers, including government entities and private certification groups.

* The final rule requires WOSBs which self-certify to submit a robust certification verification, to complete the certifications at the federal Online Representation and Certification Application ["ORCA"] Web site, and also to submit a core set of eligibility-related documents to an online "document repository" to be maintained by the SBA. Each agency’s contracting officers will have full access to this repository.

* The SBA intends to engage in a significant number of program examinations to confirm eligibility of individual WOSBs.

* In the event of a contract protest or program review, the SBA has the authority to request substantial additional documentation from the WOSB to establish eligibility.

* SBA intends to pursue vigorously punitive action against ineligible firms that seek to take advantage of this program and, in so doing, to deny its benefits to the intended legitimate WOSBs.

* * *

GoodBiz113's Take: After languishing for eight long years during the Bush Administration, this rule in favor of WOSBs couldn't be more timely. Hats off to Administrator Mills and her team for finally making it happen for women-owned small businesses and our stakeholders.

SOURCE: U.S. Small Business Administration
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