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Why should someone be interested in helping you for free?
Government is benefited if it gives loan to start small business and that’s why it helps.
Statistics show that there are more small businesses than large businesses.
0 Small businesses employ more than 50 percent of the workforce.
o Small businesses contribute more than 50 percent of the country’s gross domestic product-GDP.
0 Small businesses are a major source of new jobs.
Starting a small business or expanding your small business is not easy. Expert guidance and support is provided to you by the SBA, free of charge. 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 across the country. It does not provide grants but provides consultancy. Government small business loans are provided to many entrepreneurs. Check the website of state economic development agencies to find out if it is available in your state.
The SBA is only a guarantor of loans made by banks and other private financial institutions. Lending institutions that agree to the SBA’s terms provide loans to small businesses through the SBA. In case of inability to repay the loan within the stipulated time; The SBA pays the lender the agreed guarantee amount, and the borrower is required to pay the full amount back to the SBA.
Can the SBA Help You?
A small business is one that is independently owned and operated and is not dominant in its area of operation. The SBA has rules for determining whether your business qualifies as a small business. You can check the SBA website or the federal government’s rules to find out whether your small business is eligible for a startup loan or a small business loan for expansion. Once your business has qualified the next question any lender will ask you is: do you have a business plan?
Most lenders will require a detailed description of the business you are starting or expanding. Visit the SBA Site http://www.sba.gov/starting_business/index.html For planning options and consultations. There are many things the SBA can help you with
o writing a business plan
o get a loan
o Marketing
o License and Law
o Patents and Copyrights
o Selling to government and abroad
o Hiring employees
o Buying the right equipment.
Notable different programs are small business loans for minorities, small business loans for women, small business loans for veterans and young entrepreneurs. There are various small business loan programs offered by the SBA.
Basic 7(a) loan guarantee
This is the primary business loan program. It is provided to people who are not eligible for loans through normal lending channels. The terms offered by the SBA are more flexible. Legitimate loans are those where the proceeds of the loan are used for good business purposes. The maturity is 10 to 25 years depending on the working capital and fixed assets. http://www.sba.gov/financing/sbaloan/7a.htm
loan pre-qualification
Low-income borrowers, business owners with disabilities, exporters, rural and specialty industries are targets of this program. Bad credit small business loans do not fall into this category. It is easy to secure a loan if the applicant has a credit worthiness. http://www.sba.gov/financing/sbaloan/prequalification.htm
Certified Development Company (CDC), a 504 loan program
It is a type of Basic 7(a) loan for acquiring fixed assets or equipment for expansion or modernization. http://www.sba.gov/financing/sbaloan/cdc504.htm
Microloans, a 7(m) loan program
It is available in selected locations in most states. The SBA stands as a guarantor for organizations providing loans, technical support and management for small-scale financing. Nonprofit child-care centers can also take advantage of these loans for working capital or the purchase of inventory or supplies. http://www.sba.gov/financing/sbaloan/microloans.htm
disaster recovery
Home owners, property owners in disaster areas are eligible for this loan program. The loan term is 30 years and the rate of interest is less than 8 percent for those who can get loans elsewhere and less than 4 percent for those who cannot get loans elsewhere. http://www.sba.gov/disaster_recov/loaninfo/property.html
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