In order to give a boost to the spirit of entrepreneurship of its citizens, the federal government provides business loans to individuals to help them start a small business. The government s Small Business Administration (SBA) handles these loans usually by acting as a guarantor for loans provided by other institutions. In rare cases, the loan is provided directly by the SBA.
Besides the SBA, there are other government agencies that have programs of their own that provide loans and grants to small businesses. In order to get these loans, a small business owner or entrepreneur has to submit a proposal showcasing the blueprint of the business plan and the specific capabilities that he or she possesses to run the business effectively.
The small business owner applying for the loan needs a positive credit score in order for the loan to be approved. These credit factors are reviewed and analyzed by the authorities before a decision is made to extend the loan.
There are several categories of loans programs provided by the SBA. One of these is the Basic Loan Guaranty program, which aims to help small businesses who may not be normally eligible to receive loans from lending institutions. These loans are provided by commercial lending institutions with the SBA acting as guarantor.
The Certified Development Company (CDC) Loan Program aims to assist those seeking to own real estate or machinery for expansion or modernization. This program provides a long term loan at a fixed-rate of interest. Usually, ten percent of the loan amount needs to be contributed by the small business owner in the form of equity.
The micro loan program aims to provide short-term loans with a maximum limit of $35,000 primarily for working capital and inventory requirements. These funds cannot be used to pay off existing debt. This loan is also available for non-profit childcare centers. The loan prequalification program permits those seeking loans of amounts less than $250,000 to have their application analyzed and potentially sanctioned by the SBA before lenders are approached for consideration.
Government small business loans play a vital role in fostering the spirit of
entrepreneurship and should be looked on as an important means of funding for
those looking to start their own business
A related resource is ink refill
Further information can be found at Large Format Cartridges always writes
valuable news & reviews.