The First Places To Look For A Government Issued Small Business Loan

The federal, state and local governments provide loans to small businesses. Information on making your ideas a financial reality.

Many small business ideas never come to fruition due to financial constraints. Start up money is sometimes difficult to obtain. Many bank institutions won't approve a small business loan unless the business is well established. Many investors shy away from investing in a start up business. New businesses are often considered high risk.

This doesn't mean a small business owner can't obtain the necessary finances to make their dream a reality. The federal, state and local governments provide loans to start up and established small businesses. Many small business owners don't take advantage of these programs, because they don't know how to obtain information on the programs.

When turning to the federal government for a small business loan, contact the Small Business Administration (SBA). The Small Business Administration is a federally funded educational and financial institute for small businesses. The SBA provides a variety of loans to cover start up costs, expansion, and business supplies and machinery. Machinery includes everything from office machines (copiers, desks, chairs etc.) to factory equipment.



The Small Business Administration offers specialty loans to minority owned businesses. According to SBA guidelines, a minority owned business has a 51% ownership by a minority. Minority does not only include females and people of ethnic origin. A minority classification also includes persons with disabilities.

Loans are also available from your state government through state Small Business Development Centers. These centers provide counseling, business planning and loan packaging programs. These centers will guide you through the process of receiving a state loan for your small business.

Local counties and towns tend to have Economic Development agencies that can assist a small business with obtaining a loan. The criteria for these loans tend to include the business being within the locale, and imparting a direct contribution to the community members. In other words, a day care center has a better chance of loan approval than a candy store. The day care center's service is rendered as more important than the products and services of the candy store.

If a small business has been around for at least three years, one might want to pursue the traditional loan methods. Banks offer government issued small business loan packages. The Small Business Administration administers these loans. But being established allows one to bypass the counseling and training provided by local SBA agencies. When looking to a bank for financing, it is advisable to apply with your current bank. The bank will be familiar with your business' economic track record, and will be partial towards you. Many banks also offer lower interest rates for current customers. Local banks may have more relaxed lending terms, than national banks.

Seeking a loan for a small business takes a little time and research. But with the Internet, one can research without leaving their home or business office. All of the government agencies aforementioned have websites with information and local contact numbers and addresses. Banks have websites for more information also. But it is advisable to go to a local branch, in person, for the latest promotions of their business loan packages.

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