Government loan for small business

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I. Contents of Government loan for small business

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Government small business loans help put your own business within reach. First there’s the quest for a decent location, then comes building a customer base, followed by all the initial hiccups of generating a cash flow before your business grows roots and gains momentum. The beginning of a business is crucial because it’s when you gain or lose market credibility. If you disappoint your customers, they may not give you a second chance. If your business gets off to a rocky start (most do), and you believe you can recover but need further financing to make this happen, you can apply for government small business loans.

Why Government Loans?

For-profit lenders are reluctant to issue loans to anyone who does not have a strong credit report and financial history. That is not the case with government small business loans. Obviously, a decent credit report is important, and you will have to follow the guidelines regarding the repayment period and the interest rate set by the government, but usually the interest rates charged by government loans are lower than those you could expect in the private sector.

More about Government Small Business Loans

Government loans are typically offered through banks and credit unions that partner with the Small Business Administration (SBA). The SBA is a U.S. government body, with the motive of providing support for small businesses and entrepreneurs. For each loan authorized, a government-backed guarantee offers serious credibility, since the lender knows that even if you default, the government will pay off the balance. These loans can be applied to a number of uses, such as:

Purchase of new equipment, machinery, parts, supplies, etc.
Financing leasehold improvements
Commercial mortgage on buildings
Refinance existing debt
Establishing a line of credit

Government small business loans benefit both small businesses and the lending agency. For small businesses, it is beneficial because this is money & capital they may not have access too. For banks, the loan’s risk is decreased due to the loan being backed by the SBA.

Different SBA Government Loans

The SBA extends financial help through various lending programs it has to offer. Some of the more popular loans are:

7(a) Loan Guarantee Program: aimed primarily in helping a small business start or expand its services. The maximum size of such a loan is $5 million.
MicroLoan Program: mostly used for short-term purposes, such as purchase of goods, office furniture, transportation, computers, etc. The maximum amount is fixed at $50,000.
504 Fixed Asset Program: featuring fixed-rate and long-term financing, these loans are aimed at applicants whose business model will benefit their community directly, either by providing jobs or bringing needed services to an underserved area. Again, the maximum amount is $5 million.
Disaster Assistance: under this program, loans are sanctioned to renters or homeowners with a low-interest, long-term plan for the restoration of property to its pre-disaster condition.

In most cases, maintaining a good business credit report is enough to qualify. In addition, it instills confidence not only in the lender, but also in you. There is at least one SBA office in every state in America. If you contact them regarding the startup status of your business model and plan, you can get started on a government small business loan that will give you the financing to make your dreams a reality.

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II. Business loan videos

1. How to get small business loans from banks, private lenders and microloan lenders

2. Tips for Getting a Small Business Loan from Joaquin Gallardo of Wells Fargo

III. Business loan ppt

1. How to Get a Small Business Loan Fast!

How to Get a Small Business Loan Fast! from The Fast Business Loan Network

2. How To Get a Business Loan with Bad Credit

How To Get a Business Loan with Bad Credit from The Fast Business Loan Network

I. Contents of Government loan for small business

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If you want to expand your business, you're going to need some cash.

Money still isn't falling off trees for small businesses, and the lending seas can be a challenge to navigate. Although you need funding, you want to make sure your deal is better than the one offered by the neighborhood loan shark.

Money might be available thanks to stimulus spending, but that doesn't mean it's easy to get.

"The [banks] have tightened their lending policies, and it is more difficult for an entrepreneur to get financing,' says Velda Eugenias, a certified financial planner with Eugenias Advisory Group in Gadsden, Ala. "It is causing the small-business owner to have to get creative with finding sources of capital.'

Here are a few options:

Traditional bank loans
Your local bank can offer low interest rates and long repayment plans. Sounds good, but some entrepreneurs have found that stricter underwriting guidelines make it nearly impossible for these loans to be approved.

"The negative to a bank is that the loan can often be very hard or next to impossible to obtain,' says Rick Kahler, a certified financial planner with Kahler Financial Group in Rapid City, S.D. "Also, most bank loans are 'recourse,' meaning if there is a default, the bank can go after your personal assets as well as any collateral secured by the loan.'

Every bank's lending requirements are different, so shop around. Start with your personal bank. If a banker knows you, he or she may offer additional help when you apply.
Government loans
Like traditional bank loans, loans with a government guarantee can be tough to get, and the process can be painstakingly long. It's not uncommon for potential borrowers to bail before the loan is approved.

If you can get a government loan, you'll find low interest rates and long repayment terms. Check the Small Business Administration website for more information.
Loans from family and friends
No one wants your business to succeed more than your loved ones or good friends, so your nearest and dearest may be a good funding source. In return for the loan and your gratitude, your new lender could receive a decent interest rate on the loan--better than a bank CD or money market fund.

Make sure you do it right. Draw up a contract or promissory note for the loan with specific repayment terms so that you don't run afoul of the IRS. (If you're offered an interest-free loan, the IRS can actually attach a rate to it for you--or even decide that the loan was a gift, which will have tax consequences.)

Anytime you mix business and personal, though, you risk hurting your relationship.
Your home
Home equity is one of the quickest and easiest ways to obtain cash, but that's what got so many homeowners in trouble during the past few years. Since then, banks have cut home equity lines of credit and have imposed stricter loan-to-value ratios.

If you have home equity available, use caution before putting your home on the line.

"If things go wrong with the business, you could end up losing your home, as well as being held personally responsible for the repayment of any shortfall,' Kahler says.
Credit cards
Personal and business credit cards can seem to be an easy solution to your borrowing needs, but they can be costly, with interest rates exceeding 20 percent--a huge spread over a bank loan. Also, business credit cards are not subject to the new CARD Act rules that apply to personal credit cards.

Use credit cards sparingly and not for long-term financing.

"If you have a short-term need for a purchase that you are 99.9 percent sure you will have the money to pay off the credit card when it comes in, then it is a good use of your resources,' Eugenias says.
A partner
If you're willing to share your future successes, consider a partner who can pour some money into your business.

"Select a partner as you would a spouse, only more carefully,' says Kahler.

While a partner could bring cash, she could also bring her own ideas about how to run your business. You'll have to be willing to share, and you'll need to draw up some specific legal agreements outlining the partner's role in the company.
Less-traditional funding
Websites are popping up that allow consumers to offer loans. For example, Prosper.com sets up potential borrowers and lenders who agree to three-year unsecured loans with fixed interest rates. Borrowers post how much they'd like to borrow and the maximum interest rate they'd pay, and potential lenders bid on loans.
Your retirement accounts
This should be the funding source of last resort. You've set money aside for your future and although you hope your business venture will add to your future, it's an enormous risk. If the business goes under, you can kiss your nest egg goodbye.

Some 401(k) plans offer loans against your plan's value, and through payroll decusions you make payments on the principal and interest. But if you lose or leave your job, most plans require that the entire loan be repaid immediately.

If you choose to withdraw funds from an IRA or 401(k) before age 59 1/2, you'll be subject to taxes and penalties, making this source of cash very expensive indeed.

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II. Business loan videos

1. How to get small business loans from banks, private lenders and microloan lenders

2. Tips for Getting a Small Business Loan from Joaquin Gallardo of Wells Fargo

III. Business loan ppt

1. How to Get a Small Business Loan Fast!

How to Get a Small Business Loan Fast! from The Fast Business Loan Network

2. How To Get a Business Loan with Bad Credit

How To Get a Business Loan with Bad Credit from The Fast Business Loan Network

Government loan for small business

Wednesday, November 19, 2014

Government Small Business Loans- Government loan for small business

I. Contents of Government loan for small business

II. Business loan videos

III. Business loan ppt

Other topics related to Business loan

Tuesday, November 18, 2014

Where to Get a Small-Business Loan- Government loan for small business

I. Contents of Government loan for small business

II. Business loan videos

III. Business loan ppt

Other topics related to Business loan