Starting a small business may cost less than starting a medium or large corporation or company, but the process is just as complex. If you want to start a small business of your own, getting financial help from the Small Business Administration or SBA may be a good idea.
Although the SBA technically doesn't provide loans, it acts as a guarantor to lenders so that they may extend financial help to small businesses that have a hard time accessing loans through the usual channels.
Micro-loan Program
In the Micro-loan Program, the SBA provides funding for non-profit money lenders in specific areas. The funds are then used by the lenders to provide loans to qualified business-owners. Small-scale businesses can get loans as high as $35,000 under the Program although most business-owners take out about $13,000 on average. Generally, the payment term covers more than six years, although this can fluctuate depending on various available loan schemes. The interest charges also differ, but they are generally between 8 to 13%.
To apply for the microloan, you will have to satisfy certain requirements. For example, lenders may ask for a collateral or written guarantees. Some lenders may also require borrowers to take a seminar of short term training prior to approving the loan. This can be beneficial because you will acquire information and skills necessary for operating your small business.
7(a) Loan Program
The SBA also provides guarantees to lenders so that the risks that come with moneylending is shared between them. The lenders still have the final say about awarding the loan -- an SBA guarantee doesn't mean you automatically qualify. But when you do, the maximum amount you can borrow goes up to $750,000.
Qualifying for this type of loan also means meeting tight requirements. Such criteria include:
- Meeting certain criteria in business size
- Type of business involved in
- What areas the money will be used
- The business's financial capability
There are different types of loans under the 7(a) Program. For instance, there is the SBA express which can allow you to secure a loan as high as $350,000 in less than 3 days.
Another useful kind of loan is called the Community Express loan, which is best for businesses getting established in areas that need them the most. Borrowers can take out as much as $250,000, and the SBA also assists in technical training.
SBC's CDC or 504 Loan Program
The SBA has set up a more stringent eligibility criteria under this special type of loan program. The loan cannot be used as working capital, for re-financing, or for amortizing other loans. The loan can only be used for the following purposes:
- Purchasing land
- For expanding, renovating, and adding new facilities
- Parking facilities
- Buying machinery or equipment
- Landscaping - 16890
Although the SBA technically doesn't provide loans, it acts as a guarantor to lenders so that they may extend financial help to small businesses that have a hard time accessing loans through the usual channels.
Micro-loan Program
In the Micro-loan Program, the SBA provides funding for non-profit money lenders in specific areas. The funds are then used by the lenders to provide loans to qualified business-owners. Small-scale businesses can get loans as high as $35,000 under the Program although most business-owners take out about $13,000 on average. Generally, the payment term covers more than six years, although this can fluctuate depending on various available loan schemes. The interest charges also differ, but they are generally between 8 to 13%.
To apply for the microloan, you will have to satisfy certain requirements. For example, lenders may ask for a collateral or written guarantees. Some lenders may also require borrowers to take a seminar of short term training prior to approving the loan. This can be beneficial because you will acquire information and skills necessary for operating your small business.
7(a) Loan Program
The SBA also provides guarantees to lenders so that the risks that come with moneylending is shared between them. The lenders still have the final say about awarding the loan -- an SBA guarantee doesn't mean you automatically qualify. But when you do, the maximum amount you can borrow goes up to $750,000.
Qualifying for this type of loan also means meeting tight requirements. Such criteria include:
- Meeting certain criteria in business size
- Type of business involved in
- What areas the money will be used
- The business's financial capability
There are different types of loans under the 7(a) Program. For instance, there is the SBA express which can allow you to secure a loan as high as $350,000 in less than 3 days.
Another useful kind of loan is called the Community Express loan, which is best for businesses getting established in areas that need them the most. Borrowers can take out as much as $250,000, and the SBA also assists in technical training.
SBC's CDC or 504 Loan Program
The SBA has set up a more stringent eligibility criteria under this special type of loan program. The loan cannot be used as working capital, for re-financing, or for amortizing other loans. The loan can only be used for the following purposes:
- Purchasing land
- For expanding, renovating, and adding new facilities
- Parking facilities
- Buying machinery or equipment
- Landscaping - 16890
About the Author:
If you have ever taken out any PPI it may have been mis-sold and you could be entitled to claim it back. Real Claims specialises in PPI claims and can help you claim your money back. Alternatively if you face financial troubles Wilson Field offer free Debt Advice.
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