Free SBA Small Business Loan Help

Why should anyone be interested in helping you for free?

The government benefits from making small business start-up loans and helping.

o Statistics show that small businesses outnumber large ones.

o Small businesses employ more than 50 percent of the workforce.

o Small businesses contribute more than 50 percent of the nation’s GDP-Gross Domestic Product.

o Small businesses are the main source of new jobs.

Starting a small business or expanding your small business is not easy. The SBA gives you free expert guidance and help. The US Small Business Administration was established in 1953 and has business offices in every state. The SBA works with thousands of credit, educational, and training institutions across the country. It does not award grants, but offers advice. Government small business loans are offered to many entrepreneurs. Check the websites of state economic development agencies to see if it is available in your state.

The SBA is only a guarantor for loans offered by banks and other private financial institutions. Credit institutions that accept the terms of the SBA make loans to small businesses through the SBA. In case of impossibility of repayment of the loan within the stipulated time; the SBA pays the lender the agreed amount of collateral and the borrower has to pay the SBA the full 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. The SBA has regulations to determine if your business qualifies as a small business. You can search the SBA website or federal government regulations to find out if your small business start-up loan or small business expansion loan qualifies. Your business has qualified, so the next question any lender would ask is: Do you have a business plan?

Most lenders require a detailed description of the business you are starting or expanding. Search the SBA site http://www.sba.gov/starting_business/index.html for planning options and advice. The many things the SBA helps you with is

o Writing a business plan

o Get the loan

o Marketing

o Licenses and Laws

o Patents and copyrights

o Sell to the government and abroad

o Hiring of employees

o Buy the right equipment.

Among the various programs, small business loans for minorities, small business loans for women, small business loans for veterans and young entrepreneurs stand out. The various small business loan programs offered by the SBA are:

Basic 7 (a) loan guarantee

This is the premier business loan program. It is offered to those who do not qualify for loans through normal loan channels. The terms offered by the SBA are more flexible. Eligible loans are those in which the loan proceeds are used for sound business purposes. Maturity is 10 to 25 years depending on working capital and fixed assets. http://www.sba.gov/financing/sbaloan/7a.htm

Loan prequalification

Low-income borrowers, disabled business owners, exporters, rural and specialty industries are the target of this program. Bad credit small business loans do not fall into this category. The applicant has a credit worthiness, so 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

Microloan, a 7 (m) loan program

It is available at select locations in most states. The SBA is the guarantor of the organizations that provided the loans, technical assistance, and small-scale finance management. Nonprofit child care centers can also take advantage of these loans for working capital or to purchase inventory or supplies. http://www.sba.gov/financing/sbaloan/microloans.htm

Disaster recovery

Homeowners, homeowners in disaster areas qualify for this loan program. The term of the loan is 30 years and the interest rate is less than 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