The article answers some questions pertaining to loans and grants such as how to obtain a grant to start your own business. The topic covers government grants for starting a business including grants for women and government grants for minorities starting a small business.
The US government doesn't provide loans for business start-ups or business expansions. That said, entrepreneurs do have a number of options open to them to secure loans-particularly SBA-backed small business loans-and small business grants offered by each state. A number of state development agencies offer direct small business grants and other financial assistance. There is an economic development agency in each state that can help you have a grant to begin a business.
An entrepreneur doesn't need to go to the SBA to get a loan. The SBA backs the loans made by financial agencies such as banks. This reduces the risk banks incur by loaning money to small businesses.
The CDC/504 program is still a long-term, fixed-rate financing loan allowing small business to finance major fixed assets such as real estate or machinery. Normally, a private lender provides 50 percent of the project, the Certified Development Company (backed by SBA) shoulders 40 %, and a 10% contribution is provided from the borrower. The loan terms can be 10 or 20 years with maximum lendable amount of $1 million.
The MicroLoan Program offers maximum lendable amount of $35, 000 to qualified start-up or expanding small businesses. Borrowers can get the loan from nonprofit community-based lenders (intermediaries).
If you live in an area declared as a disaster area, you may be eligible for financial assistance from the U.S. Small Business Administration to help you recover from your losses. You don't have to become a business owner to qualify.
If your business has undergone physical damage due to disaster, you may qualify for SBA physical disaster loans of up to $2 million for a maximum term of 30 years.
If your small business is in a declared disaster area and suffered economic injury even though there is no physical damage, you may qualify for SBA EIDLs up to $2 million, payable in 30 years oe fewer.
The Small Business Investment Company (SBIC) program invests in a number of small businesses, both start-ups and growing. SBICs provide equity capital, management assistance, and long term loans to eligible small businesses.
This is one government grant for minorities starting a small business. The program aids individual American Indians in getting financing from private lenders to launch a small business on or near places that are Federally recognized reservations.
The Military Reservist Economic Injury Disaster Loan program (MREIDL) aids small businesses in paying for operating expenses that they couldn't pay because an indispensable employee was suddenly called to active service. These loans are for working capital requirements of the business only so it can pay obligations until the indispensable employee returns from active military duty.
In the United States, the Small Business Administration (SBA) helps entrepreneurs access loans. Even though the SBA does not lend funds directly to entrepreneurs, it has a program called the SBA Guaranteed Loan Program, through which entrepreneurs can obtain access to start-up loans from banks. The program is a realistic option for many start-ups and offers reduced interest rates and longer repayment terms than conventional loans. The SBA doesn't have money to lend but makes it easier for business owners to obtain loans from banks by guaranteeing the loans, like I earlier said. The most remarkable SBA program available to small businesses is the 7 (A) Loan Guaranty Program.
The loans are for small businesses that aren't able to get loans on reasonable terms through normal lending channels. Almost all small businesses are entitled to apply for an SBA guaranteed loan. The SBA can guarantee as much as 85 percent on loans up to $150, 75 percent, and 000 on loans over $150, ooo. In most cases, the maximum guarantee is $1.5 Million. A guaranteed loan may be used only for capital to launch a new business or expand an existing one. It can also be utilized for real estate purchases, renovation, equipment, or construction purchases. The best way to find out more about the SBA Guaranteed Loan Program and determine if you're eligible is to meet with a participating lender.
In Canada, you can have a start-up business loan from a bank. In this instance, I'm referring to 'bank' as a traditional lending institution (like banks and credit unions). It's now easy to get a business loan if you've got a solid loan presentation because big banks have more than just a passing interest in small businesses than before unlike the past. Of particular mention here is Business Development Bank of Canada (BDC). Its main business is to support. To this effect, it has several programs that directly deal with business start up loans, such as the CoVision program. This provides customized term financing up to $100, 000 for new businesses demonstrating long-term viability. Aside the BDC, you can also get business start-up loans from agencies such as the Canadian Youth Business Foundation, Alberta Women Entrepreneurs (AWE) and so many others.
In the United Kingdom (UK), entrepreneurs can also access Government funds to start new businesses. In May, 2012, Prime Minister, David Cameron launched an £ ;82m loan scheme for young people wanting to set up a business. Entrepreneurs between the ages of 18 and 24 can apply for funds, expected to normally be about £ ;2, 500. While the initiative is geared towards facilitating 30, 000 more start-ups and boost economic growth, officials say the loans should be repaid within five years, and interest would be charged at the rate of the Retail Prices Index plus 3%. RPI in April stood at 3.5%.
The Department of the Treasury guarantees a maximum $750, 000 loan with participating private lenders for small businesses. The credit is good for one year. The applicant can renew the loan for up to five years.