Stimulus showing up: SBA smooths the way for book publisher ‘s loan

Some of that $700 billion in federal stimulus money is trickling down to small businesses in South Carolina — including Lee German’s book publishing company in Mount Pleasant.

German, who recently took out a $50,000 loan that was backed mostly by the U.S. Small Business Administration, didn’t have to pay standard loan fees, which were eliminated after the stimulus package passed.

And lenders, in general, are more likely to give out these types of loans because the SBA now accepts responsibility for up to 90 percent of the loan instead of the usual 75 percent or 80 percent.

German’s Sylvan Dell Publishing, which publishes and distributes science-themed children’s books across the country, employs eight people and has seen record growth in the last year.

German credits the online availability of his books. Also, teachers can project the books onto a screen — as German notes, “it’s almost a disservice to stand up in front of a classroom with an 8-by-10-inch book” — and they also come with additional materials such as fact sheets and quizzes.

“In this climate, I’d like to know how much more we could have grown if we weren’t in this rough economy,” he said. “Publishers are dying left and right, and we had a 50 percent increase in our April sales.”

But German still needs the credit to fund his day-to-day operations. He typically pays his China-based printer before his income is replenished by book sales, he explained. Also, the company’s book illustrators are paid in advance for their upcoming work.

German’s particular loan was backed by an initiative called Patriot Express. The program, which is available to veterans and can make loans up to $500,000, was created before the stimulus act, but its provisions were sweetened by the act.

SBA officials are now administering a $730 million effort to help small companies weather the recession. The government agency doesn’t lend money directly, but it is now guaranteeing a larger portion of individual loans that are available through the conventional lending process.

Elliott Cooper, who oversees SBA’s South Carolina district, said since the stimulus act was enacted in mid-February, the agency has backed 89 loans throughout the state.

That money has helped create 25 jobs in the Charleston area, according to government data.

The agency participated in nine loans to Charleston-area businesses during May — the largest number of SBA-backed loans approved locally in more than a year.

Cooper attributed the loan increase to improved offerings available through the stimulus package.

“In every recession the country’s ever had, small businesses have led the way out of it by hiring five or six people here and 10 people there,” he said. “You’ll see hiring in small business before you see increased hiring with large businesses. Historically, that’s how it’s been.”

Small businesses could receive even more loans when a new stimulus-related lending program starts June 15 for companies facing “immediate financial hardship,” the agency said. Through that initiative, the agency will guarantee America’s Recovery Capital loans for up to $35,000 that are interest- and fee-free. Payments are deferred for a year and repayments can extend up to five years.

For Sylvan Dell Publishing, securing government-backed financing wasn’t a matter of survival. But German said he was “tickled” that the fees were waived and that officials probably processed his loan more quickly.

“I’m certain we benefited because of the near-hysteria surrounding the issue,” he said. “The SBA was anxious to execute these loans when banks were slow to step up to do it.”

German noted that within a week of his loan application, the money was in his company’s bank account.