After 8 years in business, the owner of the Grand Island and Kearney Big O Tires wanted to buy the properties he'd been renting so he could better control his expenses and expand his staff.
"The difference between rent and a mortgage is you're buying down an asset verses paying somebody else rent for them to do so," said Big O Tires owner, Jeff Schwab. He decided to get a loan with the Small Business Administration.
"This business [Big O], in fact, was one of 16 businesses in Kearney from April, May and June, that got an SBA loan," said Michael Foutch of the U.S. Small Business Administration (SBA).
And Schwab was one of 120 of Nebraska businesses owners who found that and loan would be the best fit.
"The benefit of the SBA for us is that it's a small down payment," explained Schwab. "That small down payment allows us to free up our own capital. It keeps our capital in our business and allows us to hire more staff, which we've done, and be able to run our business in a more effective manner."
Experts say one of a business owners toughest challenges in the current economy is to find a lender, especially on projects to expand. But the SBA has found that in providing loans for expansions... more jobs are created to help the economy improve even more.
"SBA loans usually go to businesses that are looking to begin operations, start-ups. We're looking for existing businesses to re-finance, to purchase, to expand, and when they do that, they tend to create jobs," said Foutch.
Which is exactly what happened with Jeff Schwab, who added two positions to his Kearney Big'O Tires store.
"We hired an additional front staff person and an additional mechanic, which allowed us to do what we think is important in our business model, which is provide great customer service."
Other Notes about SBA Loans:
Small businesses receiving SBA-backed loans in the first quarter of Fiscal 2011 include full-service restaurants, nursing care facilities, sporting goods stores, construction firms, a sheet metal manufacturer, a dance company, a bakery, a caterer, an advertising agency and a wired communication carrier.
From April 1 to June 30, the SBA processed 102 loans for small businesses across the state of Nebraska for $34 million in loan volume. The average loan amount per approval jumped nearly 40 percent from the same period last year.