This is a Federal Government organization established to help small businesses with loans able to keep them in business or able to help small businesses to grow.
The benefit of obtaining a small loan from the government is that the interest rates will be smaller than the ones offered by private banks, and the reason for getting a loan and the intended use are not as much scrutinized and controlled as when the small business loan is solicited from a private bank.
When awarding a loan, the Small Business Administration works through commercial banks, which are more relaxed when offering a loan through the Small Business Administration system, knowing that the loan if defaulted by the beneficiary, is guaranteed to be paid by the government.
There are multiple situations when the Small Business Administration will consider issuing a loan to help a small business such as starting a new business with a good business plan, purchasing new equipment, refinancing existing loans or mortgages, expanding a business, commercial real estate mortgages and others.
There are Small Business Administration offices in all states and many times these offices are working in close association with an organization called SCORE which is formed of older, retired former business owners who offer help to new business owners such as business plans, financing, methods of operating a business and any other questions a new business owner might have.
The Small business Administration can help a new business with advise how to best set up your business from a legal point of view, can help with establishing your business in a particular area and running your business.
Maintaining a steady increase of your business is crucial in the success of your enterprise and some important factors are insuring your business and protecting your original ideas with patents, so competitors will not be able to copy your products.
If you feel you need a small business loan you should first check the different programs offered by the Small Business Administration such as:
-7(a) loan programs- which offer special loans programs, export loans programs and rural loans programs.
– Microloans programs with a maximum amount of $50,000 and usually intended for purchase of machinery, furniture, supplies or inventory.
– CDC/504 loan programs intended for the development of the community as a whole.
– Loans for women owned businesses which are explained in more details at the SBA Offices for Women Owned Businesses and could be grants or loans used for the expansion of their business.
– Loans for Minority owned businesses which can have advantageous terms for businesses owned by minorities.
– Loans offered by the Government for disaster areas which are intended for the reconstruction of buildings and businesses destroyed by hurricanes or coastal storms or other forces of nature.