The Exhibitor (1956)

Report On What To Do When Getting An SBA Loan ^7a 1953 . yV/sTfl^ IN a recent action the Small Business Administration took official cognizance of the importance of the motion picture theatre to the Nation’s economy. This action was taken on Sept. 17, 1956, when the Small Business Administration’s Loan Policy Board met to consider a recommendation, made by the Senate Select Committee on Small Business that: ^ ^ V' “The Small Business Administration . . . consider the advisability of making theatres * eligible for loans in those cases where regular lending institutions will not grant credit.” The Small Business Administration’s Loan x Policy Board has the authority to establish the over-all lending policies of the Small Business Administration. It is composed of the Administrator of the Small Business Administration, Wendell B. Barnes, who is chairman; Secretary of Commerce Sinclair Weeks, and Secretary of the Treasury, George M. Humphrey, or their designees. At its September meeting, presided over by Barnes, the Loan Policy Board considered the recommendations of the Senate Committee and the Theatre Owners of America. Recognizing that “fourwall theatres,” in addition to provid¬ ing entertainment, frequently make substantial contribution to the maintenance or advancement of the economy of their com¬ munities, the Board said it was of the opinion that the extension of financial assistance to small business concerns for the mod¬ ernization, equipment, repair or operation of “four-wall theatres” making such contribution would be in the public interest. Accordingly, it was the decision of the Board that applications from small busi¬ ness concerns for financial assistance for modernization, equipment, repair or oper¬ ation of “four-wall theatres” which make substantial contribution to the mainten¬ ance or advancement of the economy of their communities may be accepted and considered on their merits by the Small Business Administration. PHYSICAL THEATRE Vol. 11, No. 13 December 5, 1956 This official action has opened the way for small indoor theatres to apply to the Small Business Administration for loans, when needed credit is not available on reasonable terms from private credit sources. MAIN REQUIREMENTS It is therefore appropriate to review some of the main require¬ ments of the Small Business Administration’s financial assistance program. In the first place, in order to be eligible for a loan, a firm must be in the “small business” category. Presently, the Small Business Administration is using the yard-stick of $1,000,000 yearly in gross receipts as the dividing point between large and small firms. However, this criteria is subject to further review by the Agency’s Office of Economic Adviser, and it may be further modified as studies now being instituted may indicate. The law limits individual loans from the Small Business Administration to $250,000 for any one borrower. However, the average loan made by the Agency is much less than that, running about $50,000. Loans must be paid back in 10 years at the most, unless construction is involved, in which case the term may be as much as 10 years plus the length of time needed to complete the construction. All loan applications must be filed with the Small Business Administration’s field offices. In many cases, loan requests are not referred to Washington at all. Recently, the Small Business Administration gave to its Regional Directors authority to approve loans on their own up to $100 000 when a bank is participating to the ex¬ tent of at least 25 per cent. Types of loans The Small Business Administration prefers to make participation loans — that is loans in which a bank or other private lending institution is taking a share. It is significant that currently about 70 per cent of the Small Business Administration’s There are countless ways in which funds obtained through an SBA loan can be used to bring an indoor theatre up to par. An area which could profit from a remodeling program is the lounge. Seen here are the before (left) and after (right) views of the lounge of the redecorated N. Y. Criterion. December 5, 1956 PHYSICAL THEATRE DEPARTMENT of MOTION PICTURE EXHIBITOR PT-5