Motion Picture Herald (Oct-Dec 1956)

Government to Make Loans to Indoor Theatres Through SBA SBA Form 4 (11-55) Part I UNITED STATES OF AMERICA Small Business Administration APPLICATION FOR LOAN Under Section 207 (a) Small Business Act of 1953 As Amended NAME AND ADDRESS OF APPLICANT ( Street , city, zone, and State) GENERAL— A; or Branch Offic after called “S question or tc INAPPLICA1 TO INCLUD OR BY AT' WHERE A OF INFOF PLICATIC DIRECT Regional PARTIC to the r the Ap' and Ira priate Part ' Exhibitors who want to take advantage of last week's ruling by the Small Business Administration will become more than a little familiar with the above. It is the top of SBA Form 4, by which the exhibitor-applicant makes his request for SBA aid. . . . U. S. unit follows suggestion of Senate Small Business group to aid exhibitors needing money to modernize properties WASHINGTON: The Small Business Administration announced here late last week that conventional — or four-wall — theatres (as opposed to drive-ins) will now be eligible for Government loans and that interested theatre owners may start filing loan applications with the SBA immediately. The SBA decision was said to have been made at the September 17 meeting of its Loan Policy Board, which gave careful consideration to the recommendation of the Senate Small Business Committee that small theatres be made eligible for loans in cases where regular lending institutions would not grant credit. Brief Filed by TO A The Senate committee recommendation had been inoerporated in a brief filed with the SBA by A. Julian Brylawski for the Theatre Owners of America, urging the SBA to extend its loan policy to include small theatres in need of modernization. Allied States Association, through its general counsel, Abram F. Myers, had also made the same request of the SBA. Top theatre men in the country were enthusiastic about the new policy. Ernest Stellings, president of TOA, said in Charlotte, N. C., that it “should open the doors for much modernization and refurbishing” and that it would afford theatres, especially the small ones, “a new lease on life.” He also noted that “it is a step forward in getting the motion picture theatre out of a classification which also includes cabarets, saloons, etc.” Applications for loans can be filed in any of the 25 SBA branch offices or 15 SBA regional offices around the country. One of the key pieces of evidence a theatre owner needs to have when he files an SBA loan is proof that he has been unable to get private financing. Make Contribution Spokesmen for the SBA said they did not feel that theatre owners had to worry too much about proving the contribution their theatres were making to the locai economy. The SBA said that theatres were being made eligible for loans in part because they make a substantial contribution to the economy of their communities. Agency officials said they felt this statement was included by the SBA in order to justify the decision to make theatres eligible for loans and to confine the loans to conventional theatres. They added that the fact that the theatres employed local people and brought business to the area where they were would probably be sufficient proof of the contribution being made to the local economy. “We have no standards in mind for testing this,” one official declared. “We realize it would be a very difficult thing to prove one way or the other.” The agency last Friday announced that it would accept and consider loan applications from owners of conventional theatres interested in installing new equipment, remodeling, renovating or otherwise modernizing their theatres. Previously, the agency had refused to accept loans for theatres or other entertainment enterprises. TOA’s Mr. Brylawski, when the decision was announced, said here he thought TOA would shortly issue a bulletin instructing its members how to go about applying for a loan and meeting the “contribution to the local economy” criterion. SBA officials said that theatre owners did not need legal help of their own to apply for SBA loans. Applications must be made on SBA Form 4, available at branch and regional offices, and local SBA personnel will help applicants fill out the form if desired, it was stated. If the applicant is in a community of 200,000 or fewer persons, he must produce a letter or other evidence that he was turned down by one bank for a private loan. If the applicant is from a larger community, he must have a turndown from at least two banks. Loans can be obtained either entirely from SBA or partly from SBA and partly from a local bank — a so-called participa tion loan. SBA officials said that in the case of participation loans, the local banks will frequently file the SBA loan application for the applicant. Once an application is made, an answer is given in about 30 days on the average. Some applications take longer, some less, depending on the complexity and other factors. If the loan sought from SBA is for $20,000 or less, or if it is a participation loan of $50,000 or less with the local bank putting up at least 25 per cent, the application can be passed on by the branch or regional office. Larger loan applications must be processed by the Administration’s officials in Washington. SBA loans can run as high as $250,000. However, TOA in its application some weeks ago said it felt the average loan sought by theatre owners would be under $25,000. SBA loans run a maximum of 10 years and bear six per cent. On a participating loan, the bank sets the interest rate and maturity, but the rate can’t be more than six per cent. Loans that are granted, SBA said, can be paid out as desired by the applicant — all at once or in small amounts from time to time. Procedure on SBA Loans To obtain financial aid from the Small Business Administration in either a direct loan from the SBA or a participating loan with a private lending institution joining the SBA, the theatre owner must fill out ( Continued on page 16, col. 3) MOTION PICTURE HERALD, OCTOBER 6, 1956 13