Why should anyone be interested in helping you for free?
The government benefits if it gives small business start up loans and that is why it helps˳
o Statistics show that small businesses number more than the big businesses˳
o Small businesses employ more than 50 percent of the work force˳
o Small businesses contribute to more than 50 percent of the nation’s GDP-Gross Domestic Product˳
o Small businesses are the principal source of new jobs˳
Starting a small business or expanding your small business is not easy˳ Expert guidance and help is given to you for free by SBA˳ The US Small Business Administration was established in 1953 and has business offices in every state˳ SBA works with thousands of lending, educational and training institutions nationwide˳ It does not provide grants but offers counseling˳ Government small business loans are offered to many entrepreneurs˳ Look up the web sites of the state economic development agencies to know if it is available in your state˳
SBA is only a guarantor of loans offered by banks and other private financial institutions˳ The lending institutions that agree to terms of the SBA provide loans to small businesses through SBA˳ In case of inability of repayment of loan within the stipulated time; the SBA pays the lender the agreed upon guarantee amount, and the borrower has to pay the SBA the entire amount˳
Can the SBA help you?
Small business is one that is independently owned and operated and is not dominant in its field of operation˳ SBA has regulations to determine whether your business qualifies as a small business˳ You could look up the SBA website or federal government regulations to find out if your small business startup loan or small business loan for expansion qualifies˳ Your business has qualified then the next question that any lender would ask you, is: Do you have a business plan?
Most lenders would require a detailed description of the business you are going to start up or expand˳ Look up the SBA site http://www˳sba˳gov/starting_business/index˳html for planning options and counseling˳ The many things that SBA helps you is
o Writing a business plan
o Getting the loan
o Marketing
o Licenses and Laws
o Patents and copyrights
o Selling to government and abroad
o Hiring employees
o Buying the right equipment˳
Notable among it various programs are Small business loans for minorities, Small business loans for Women, Small business loans for veterans and young entrepreneurs˳ The various small business loan programs offered by SBA are˳
Basic 7(a) Loan Guaranty
This is the primary business loan program˳ It is offered to those who do not qualify for loans through the normal lending channels˳ The terms offered by SBA are more flexible˳ Valid loans are those where the proceeds of the loan are used for sound business purposes˳ The maturity is 10 to 25 years depending upon working capital and fixed assets˳ http://www˳sba˳gov/financing/sbaloan/7a˳htm
Loan Prequalification
Low income borrowers, disabled business owners, exporters, rural and specialized industries are the target for this program˳ Bad credit small business loans do not fall in this category˳ The applicant has a credit merit then it is easier to secure the loan˳ http://www˳sba˳gov/financing/sbaloan/prequalification˳htm
Certified Development Company (CDC), a 504 Loan Program
This is a variant of the Basic 7(a) loan to obtain real estate or equipment for expansion or modernization˳ http://www˳sba˳gov/financing/sbaloan/cdc504˳htm
Micro Loan, a 7(m) Loan Program
This is available in selected locations in most states˳ The SBA stand as guarantor to organizations that provided the loans, technical assistance and management for small scale financing˳ Not-for-profit child-care centers can also avail these loans for working capital or purchase of inventory or supplies˳ http://www˳sba˳gov/financing/sbaloan/microloans˳htm
Disaster Recovery
Home owners, Property owners in disaster areas qualify for this loan program˳ Term of the loan is 30 year and the rate of interest is below 8 percent for those who can obtain credit elsewhere and below 4 percent for those who cannot obtain credit elsewhere˳ http://www˳sba˳gov/disaster_recov/loaninfo/property˳html
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