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AGC Succeeds with SBA
By Mark D. Gibson
U.S. Small Business Administration
Georgia District Public Affairs
Drive and determination are not only key contributing factors to being successful in the military, they are essential to the success of AGC Training Center, in Augusta, Georgia. Bobbie and Herman Lee, military veteran husband and wife team, understand what it means to serve. As veterans, they developed leadership skills to encourage and empower their clients and customers to excel while keeping a sense of serving the community as their priority. AGC provides services to licensed childcare programs for children from birth to age twelve, elementary schools, and registered family childcare programs in a four state region. Bobbie and Herman teamed with their local SBA Small Business Development Center (SBDC) to get where they are today.
"The SBA has been instrumental in keeping my team and me abreast to what's going on in the world as it relates to small business. The SBA is our go to source for factual, relevant, and current information on growing your small business, doing business with the government, certifications, and a lot more." Said Bobbi. "Initially, we met with Susan Caldwell, Area Director, SBDC to discuss our needs and plans and she referred us to her colleague Jonathan Bohn. Once Jonathan came on board he was instrumental in helping us prioritize what AGC's strategy was going to be going forward. With his help we were able to complete a business plan in less than five months."
The SBDCs mission is to build, sustain, and promote small business development and enhance local economies by creating businesses and jobs. The SBDC program, vital to the SBA’s entrepreneurial outreach, has been providing service to small businesses for more than 30 years. It is one of the largest professional small business management and technical assistance networks in the nation. With more than 900 locations across the country, SBDCs offer free one-on-one expert business advice and low-cost training by qualified small business professionals to existing and future entrepreneurs.
Bobbie Lee (AGC Owner), Susan Caldwell (SBDC), David Perry, & Terri Denison (SBA).
Photo by: Mark D. Gibson
"Seeing the Lees’ achieve success is not a surprise. From our initial conversation, it was apparent Bobbie and Herman were serious about their business and knew it well, but also not hesitant to seek assistance when treading in unfamiliar waters. When the Lees first came to the SBDC, they planned to purchase an existing school supplies business. After working with the SBDC and conducting their due diligence, they chose, instead, to start their own retail store from scratch. Although starting from scratch was a risky strategy, the center’s success is evidence the Lees made a wise choice.
After several failed attempts to find a suitable retail location, the Lees identified and secured a prime location, purchased fixtures from two closing Blockbusters, and were ready to start purchasing inventory and hiring two new employees. In January 2012, AGC acquired the necessary funding to expand operations through Queensboro Bank, an SBA preferred lender, through the 7(a) program.
The 7(a) Loan Program is SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from section 7(a) of the Small Business Act, which authorizes SBA to provide business loans to American small businesses. SBA itself does not make loans, but rather guarantees a portion of loans made and administered by commercial lending institutions.
7(a) loans are the most basic and most commonly used type of loans. They are also the most flexible, since financing can be guaranteed for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.
Most banks participate in the program, as do some non-bank lenders, which expands the availability of loans. Participating lenders agree to structure loans according to SBA's requirements, and apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guarantee 7(a) loans—the lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is against payment default; it does not cover imprudent decisions by the lender or misrepresentation by the borrower.
Team Lee recognized several opportunities for growth, including that of selling educational products to its clients. As AGC achieved success in its goal to train and provide consulting services to educators, the Lees recognized the opportunity to expand the business. Based on market research, they realized parents and educators alike were looking for a one-stop-shop to receive training, buy school supplies and have resources available to them, all in one location. The Lees’ goal was for AGC to become like a "Barnes and Noble" for teachers and parents as well.