subject: Programs Under Which Small Business Loans Can Be Found [print this page] Entrepreneurs need funds for the sustenance of their enterprise. But what is more important is funds should be raised from proper sources. Lenders have to approve the demands posed by borrowers and offer grants to their organization. There are many financers that are doing a good job by making government loans available to entrepreneurs under several programs. The programs that bring small business loans for entrepreneurs can be listed as below :
7 (a) Loan Program: The 7 (a) loan program is undoubtedly a very popular funding resource. Business owners can find up-to $750,000 from a 7 (a) lender that is backed by a partial guarantee from SBA. Note that the 7 (a) lender can be a bank and even private lenders. But what is most important is it is backed by SBA that makes the fund available to small businesses through these lenders. The agency works hard to make grants available to business owners so that they can use the money as working capital, for asset purchase and leasehold improvements. Personal guarantee is also required in case of owners of a business who hold an ownership stake of 20 percent or more.
7 (m) Microloan Program:
The 7 (m) microloan is made available directly from SBA through community based intermediaries. Micro-lenders in an area take the responsibility to distribute loan grants to businesses that need funds. This program makes funds of up-to $35,000 meant to be used for purposes such as starting a business and growing an enterprise. The average loan granted is $10,000 and this microloan borrowers need to enroll themselves in technical assistance classes conducted by micro-lender intermediaries.
The 504 Program:
This loan program is meant to supply funds for purchasing assets such as land and equipment. The asset purchase of a company is typically funded by banks and CDCs in an area. It carries an SBA guarantee of up-to 40 percent of value of the asset that is a loan guarantee of up-to $1 million. This is good money for buying expensive equipments for a companys flawless functioning.
The three loan programs are launched for the success of business enterprises. They are easily accessible and business owners just have to keep track of the loan-makers and under which program are they making grants available to companies. So, depending on the amount granted and interest charged small business loan can be applied for.
Business owners also need to prepare themselves well before applying for grants to lenders. Be it women owned business , a public owned enterprise or a private institution, everyone has to prepare to find extended loan support. Businesses have to file applications after completing credit standard norms. Entrepreneurs have to be strong in their credit ratings and should have their credit scores matching the set standard.
They should clear up all doubts in the mind of lenders so as to make financers get the feel that the grant that they are going to make is secure and shall be returned back in time. It is only borrowers who can put the mind of lenders at ease by providing suitable collaterals and other form of guarantee against the loans.
