SBA Programs Make Small Business Loans’ Availability Easy For Entrepreneurs Small Business loans are introduced to make a perennial fund source available to business owners. The loan term is kept extended and emerging enterprises can use the fund for their benefit. Application process for this grant is simple though there is the requirement to offer collateral support and good financial reporting. Financing is done in a consolidated way by banks and private lenders. Start-up business loans are made available to entrepreneurs so that they can make repayments on time and simultaneously grow their organization. The availability of this fund is possible because there are several government programs being launched at a time to time basis. The government does not directly act as a financer but does this indirectly by providing funds to lenders with an assurance that the granted amount shall be repaid by the government incase the borrower defaults. There are several forms of government support available to business owners. Some of them are as under: The 504 Program This program is meant to make sufficient capital available to entrepreneurs in the event of their need to buy equipment or asset for their company. Private lenders, banks, and credit unions can make this loan while the SBA provides a 40 percent guarantee on the assets. So, this guarantee of the SBA is found to extend up-to $1 million depending on the value of the asset offered by the business owner. So, this grant certainly gives confidence to banks for making funds available without delay. SBA 7(a) Loan Program The 7(a) loan is meant for enterprise owners who need money to make company improvements and also for buying assets. This grant can be used to meet Company Working capital needs. The SBA guarantees this loan program and borrowers are entitled to find grant amount extending up-to $750,000. But there is also a clause with this fund. Any entrepreneur having an ownership stake above 20 percent needs to furnish a personal guarantee. This is just in addition to the SBA guarantee the lenders are being offered. 7 (m) Program This is a microloan program intended to help businesses that are small sized. This fund is exceptional as the SBA grants it almost directly through the community based lenders. Enterprises are eligible to find loans up-to $35,000 under this loan
program. Though it is a small sum but yet it can be used by entrepreneurs to fulfill some basic business needs. These funding programs help entrepreneurs to find small business loans for their organization. The launch of these programs has eased the funding process but it certainly requires borrowers to fulfill some basic lending criteria. The borrowers have to fill in application forms and then it becomes possible to initiate the loan process. Lenders like banks and credit unions themselves may sometimes make alterations in the financing terms. Business owners have to meet their eligibility criteria in order to find grants. As each of the programs is an initiative of the SBA, so it is wise for the borrower to visit the official website of SBA and read the guidelines. It will certainly expand their knowledge and will make it easier for them to bid for grants after having met the eligibility requirements. Entrepreneurs should have a record of good credit scores as it rates them well to find loans from lenders.
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