Tag: SBA

SBA Loans #business #lists


#sba loans

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If you’re planning to start a business or expand an existing business, you might need financing help. SBA participates in a number of loan programs designed for business owners who may have trouble qualifying for a traditional bank loan.

To start the process, you should visit a local bank or lending institution that participates in SBA programs. SBA loan applications are structured to meet SBA requirements, so that the loan is eligible for an SBA guarantee. This guarantee represents the portion of the loan that SBA will repay to the lender if you default on your loan payments.

The SBA Loan Application Checklist provides a listing of forms and documents you and your lender will need to create a loan package to submit to SBA.

The following are direct links to information about commonly requested SBA programs:

Starting and Expanding Businesses

Gives 7(a) loans to eligible borrowers for starting, acquiring and expanding a small business. This type of loan is the most basic and the most used within SBA’s business loan programs. Borrowers must apply through a participating lender institution.

Provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Offers very small loans to start-up, newly established or growing small business concerns. SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $50,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.

Disaster Loans

Provide financial assistance to victims of disasters or to individuals in a declared disaster area. You may be eligible for this type of loan even if you don’t own a business.

Assist small businesses, small agricultural cooperatives and nonprofit organizations as they recover from economic losses resulting from physical disaster or an agricultural production disaster.

Export Assistance Loans

Provide exporters and lenders with a streamlined method of obtaining financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. SBA provides an expedited eligibility review with a response in less than 24 hours.

Offers loans targeted at businesses that are able to generate export sales but need additional working capital to support these opportunities.

Gives term loans that are designed for businesses that plan to start/continue exporting or those that that have been adversely affected by competition from imports. The proceeds of the loan must enable the borrower to be in a better position to compete.

Veteran and Military Community Loans

Offers funds to eligible small businesses to meet ordinary and necessary operating expenses that could have been met, but are unable to meet, because an essential employee was “called-up” to active duty in their role as a military reservist.

Special Purpose Loans

Help small businesses meet their short-term and cyclical working-capital needs through the SBA umbrella program called CAPLines.

Provides financing to eligible small businesses for the planning, design or installation of a pollution control facility.

CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by the North American Free Trade Agreement (NAFTA ). To be eligible, a business must reside in a county noted as being negatively affected by NAFTA, based on job losses and the unemployment rate of the county.


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Current SBA Loan Rates #work #from #home #business #ideas


#sba loan rates

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Current SBA Loan Rates

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For many small-business borrowers, government-backed loans are the holy grail. SBA loan interest rates are some of the most competitive among lenders.

So keeping up on the Small Business Administration’s terms and rates is part of a smart approach to finding a business loan. The 7(a) loan is the SBA’s most popular product and offers a flexible sum of cash for a variety of uses, including managing daily operations, purchasing new products and refinancing high-interest loans. Business borrowers also find low-cost financing for land and other major purchases with SBA 504 loans.

The SBA sets interest rate guidelines for lenders, which helps keep small-business owners borrowing costs low.

Here’s a breakdown of SBA business loan terms and rates, including interest and fees.

SBA loan rates

SBA 7(A) LOAN TERMS:

  • 7(a) loans do not have a minimum loan amount and max out at $5 million. The average SBA loan was around $374,000 in 2015.
  • The SBA guarantees 85% of your loan if it’s less than $150,000 and 75% if it’s more than $150,000. However, it limits guarantees to $3.75 million.
  • SBA loans aren’t easy to qualify for. Read up on the qualifications for SBA loans to make sure they’re right for you.

SBA 7(A) INTEREST RATES:

7(A) LOANS REPAID IN LESS THAN 7 YEARS

*The prime rate, hiked on Dec. 17, 2015, is 3.5%.

Example: The maximum interest rate for an SBA loan of $25,000 or less, paid in less than seven years, is 7.75%.

But interest rates make up only part of your expenses. Your APR reflects your true cost of borrowing, including your interest rate and all fees associated with the loan.

How SBA loan rates are set. Interest rates for SBA 7(a) loans are the daily prime rate, which changes based on actions taken by the Federal Reserve, plus a lender spread. The spread is negotiated between the borrower and the lender, and can result in either fixed or variable interest rates. However, the SBA caps the maximum spread lenders can charge based on the size and maturity of the loan.

A lender providing an SBA loan may also calculate interest rates using the one-month London Interbank Offered Rate plus 3% or the SBA’s optional peg rate instead of the daily prime rate.

GUARANTY FEES

7(a) loan guaranty fees are based on the loan amount and maturity date and apply only to the guaranteed portion of the loan. Lenders are required to pay the SBA the guaranty fee, but some pass the expense on to you. However, the SBA limits the maximum amount you will be charged.

You ll pay no guaranty fee if your loan is less than $150,000. If it s more than $150,000 and matures in less than a year, you’ll see a 0.25% guaranty fee.

If your loan is for more than $150,000 and takes more than a year to mature, you’ll be charged based on a three-tier system:

  • 3% on loans of between $150,000 and $700,000
  • 3.5% on loans of between $701,000 and $1 million
  • 3.75% on loans of more than $1 million

CDC/504 loans

Business borrowers looking to buy land, buildings or major equipment with long-term, fixed-rate financing can apply for SBA 504 loans. These loans are partially funded by certified development companies, nonprofit organizations focused on community economic development. The loans require collateral, typically the assets that are being financed, as well as personal guarantees from the principal borrowers.

504/CDC SBA LOAN TERMS

  • 504 loans are available in 10- or 20-year terms: As of March 2016, 10-year term loans had an effective interest rate of 4.33% and 20-year term loans had an effective interest rate of 4.55%.
  • Fee percentages are fixed but reset every five years based on principal, often resulting in a lower payment for the borrower.
  • The minimum loan amount is $50,000; the maximum is $5.5 million.

How 504 loan rates are set: Small-business owners seeking a 504 loan are on the hook for a down payment of at least 10% of the cost of the project. A traditional lender, such as a bank, puts up 50% of the loan, and a certified development company puts up as much as 40%. The SBA guarantees 100% of the CDC portion of the loan.

SBA 504 loan terms are primarily made up of the following:

  • The Treasury bond rate: Loans with 10-year terms are priced based on the five-year Treasury bond, while loans with 20-year terms are based on the 10-year Treasury bond.
  • A guaranty fee that is paid to the SBA.
  • A servicing fee that is paid to the CDC.
  • A fee paid to the central servicing agent.

When applying, you ll be quoted an effective interest rate, which is the sum of those three fees and the Treasury bond rate. However, you ll also pay a one-time fee of 2.15% to the SBA, as well as some additional fees, meaning your total cost of borrowing (or annual percentage rate) will be slightly higher than your effective rate.

The bottom line on SBA loan rates

SBA loans give you the best interest rates, though the application process can be complicated and time-consuming. If you find yourself in need of money fast, numerous online lenders can help you get the capital you need. However, they have less favorable APRs.

Find and compare small-business loans

If SBA loans aren t the right fit, compare other small-business loans to meet your needs and goals using our tool. We gauged lender trustworthiness, market scope and user experience, among other factors, and filtered lenders by categories that include your revenue and how long you’ve been in business.

To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

This post has been updated. It was originally published Jan. 8, 2016.

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2016 NerdWallet, Inc. All Rights Reserved

Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.

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How to Find the Right SBA Loan for Your Small Business #business #card #size


#small business administration loans

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How to Find the Right SBA Loan for Your Small Business

Small businesses are the backbone of the U.S. economy: According to data from the 2010 U.S. Census, there are 27.9 million small businesses registered in the United States, employing 120 million people almost half of the nation s workforce.

Part of what the Small Business Administration (SBA) does is help America s small businesses secure the funding they need to operate and grow. As a federal government agency, the SBA does not lend small businesses money directly. Instead, it sets guidelines for loans that are made by its partners, which include banks, credit unions, community development organizations and microlending institutions. The SBA guarantees a portion of these loans granted by these institutions will be repaid, eliminating some of the risk for lenders.

Kale Gaston, head of the SBA Lending Group for TD Bank in Greenville, S.C. said SBA loans do a great job of helping lenders say yes to borrowers. He also noted that SBA programs provide better access to capital and credit enhancement for small business owners. For example, since the SBA guaranty lowers the risk in case of a loan default, lenders are able to provide funding when the down payment available is too low or the business s cash flow is not high enough for traditional options.

SBA lenders can provide longer terms as well. Instead of five or 10 years for a real estate purchase with a balloon payment at the end, the lender can give terms for 25 years, eliminating the balloon (i.e. final payment) or need to refinance every few years, Gaston said. For shorter-term assets, like equipment, terms could go to 10 years instead of the usual three to five years.

SBA loan programs

The SBA s loan programs are designed specifically for small business owners who don t have access to other reasonably termed financing. There are four main types of loan programs:

7(a) loan program: This is the SBA s primary program to help startups and existing small businesses obtain financing. 7(a) loans are the most basic and most commonly used type of loan, as well as the most flexible. The money can be used for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, purchasing or renovating land and buildings, leasehold improvements and debt refinancing. Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. Borrowers can apply through a participating lender institution.

CDC/504 loan program: This program provides businesses with long-term, fixed-rate financing for major assets, such as land and buildings. The loans are typically structured with the SBA providing 40 percent of the total project costs, a participating lender covering up to 50 percent and the borrower putting up the remaining 10 percent. Funds from a 504 loan can be used to purchase existing buildings, land or machinery, and to construct or renovate facilities. These loans cannot be used for working capital or inventory. Under the 504 program, a business qualifies if it has a tangible net worth of less than $15 million and an average net income of $5 million or less after federal income taxes for the two years before application. The maximum amount of a 504 loan is $5 million.

Microloan program: This program offers very small loans to startups, or newly established or growing small businesses. The loans can be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery or equipment. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit organizations with experience in lending and technical assistance. Those intermediaries then make loans of up to $50,000, with the average loan being about $13,000. The loan cannot be used to pay existing debts or to purchase real estate.

Disaster loans: The SBA offers this option to businesses that have been affected by a declared disaster. These low-interest loans can be used to repair or replace damaged real estate, personal property, machinery, equipment, inventory and business assets.

Further details on each type of loan program can be found on the SBA s website .

What you ll need to apply

When applying for an SBA loan, you ll need to fill out forms and documents for the specific loan you re trying to get. The SBA also encourages borrowers to gather some basic information that all lenders will ask for, regardless of the loan type. The following items are usually required:

  • Personal background and financial statements
  • Business financial statements
  • Profit-and-loss statement (three years)
  • Current within the last six months
  • List of debts
  • Projected financial statements
  • Business certificate/license
  • Income tax returns
  • R sum s for key team members
  • Business overview and history
  • Business lease

The SBA also advises small businesses applying for a loan to be prepared to answer several questions:

  • Why are you applying for this loan?
  • How will the loan proceeds be used?
  • What assets need to be purchased, and who are your suppliers?
  • What other business debt do you have, and who are your creditors?
  • Who are the members of your management team?

Why your business plan matters

Whether you re a new startup or an established company, the key to a successful application is a well-written business plan .

The business plan not only is the road map that will guide the business from planning to startup to (hopefully) success, but also will show any potential lender that the potential business owner does have a clear view and understanding of the business, how to run it and, most importantly, how the loan will be repaid, David Hall, a public affairs specialist with the SBA in Washington, D.C. said in an email interview with Business News Daily.

Gaston agreed, noting that lenders want to know how knowledgeable you are about your business and the competitive market.

The concept may be great, but what the lender is looking for is that the individual is driven, capable and determined, Gaston said. You really need to understand what you are doing every step of the way and be able to convey that to the lender during the application process.

Hall also recommended that business owners take full advantage of the business planning resources offered by the SBA and its partners, such as SCORE. SBDCs (Small Business Development Centers) and WBCs (Women Business Centers).

Finding a lender

While Gaston acknowledged that applying for an SBA loan is a process, she said working with a lender that has experience can make that process a lot easier. To find experienced SBA lenders in your area, he suggested talking to folks locally in the market and looking for a lender that is part of the SBA s Preferred Lender program. This program gives thousands of lenders per year delegated authority to approve loans based on certain criteria, shortening the time period between application and approval.

You can find SBA lenders by going online at sba.gov. contacting local accountants and attorneys, and looking for lenders with a large local presence. SBDCs also provide document support and lender referrals.

The SBA program drives a tremendous amount of value in the economy, lending approximately $30 billion to small businesses annually, Gaston said. It takes businesses to the next level, is appropriately structured and enables them to be successful.

Additional reporting by Business News Daily contributor Elizabeth Palermo.

With an Associate s Degree in Business Management and nearly twenty years in senior management positions, Marci brings a real life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Business News Daily in 2015.

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What is the SBA Microloan Program?

  • Writing a Business Plan: Tips from the SBA


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  • What SBA Offers to Help Small Businesses Grow #business #school #rankings


    #small business help

    #

    What does SBA offer to small business owners? The programs are many and varied, and the qualifications for each are specific. SBA can help facilitate a loan for you with a third party lender, guarantee a bond, or help you find venture capital. Understanding how SBA works is the first step towards receiving assistance.

    SBA’s Role

    SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.

    Guaranteed Loan Programs (Debt Financing)

    SBA does not make direct loans to small businesses. Rather, SBA sets the guidelines for loans, which are then made by its partners (lenders, community development organizations, and microlending institutions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms.

    SBA loan guaranty requirements and practices can change as the Government alters its fiscal policy and priorities to meet current economic conditions. Therefore, you can’t rely on past policy when seeking assistance in today’s market.

    Bonding Program (Surety Bonds)

    SBA’s Surety Bond Guarantee (SBG) Program helps small business contractors who cannot obtain surety bonds through regular commercial channels.

    A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor’s responsibilities and ensures that the project is completed.

    Through the SBG Program, the SBA makes an agreement with a surety guaranteeing that SBA will assume a percentage of loss in the event the contractor should breach the terms of the contract. The SBA’s guarantee gives sureties an incentive to provide bonding for eligible contractors, thereby strengthening a contractor’s ability to obtain bonding and greater access to contracting opportunities for small businesses.

    SBA can guarantee bonds for contracts up to $5 million, covering bid, performance and payment bonds, and in some cases up to $10 million for certain contracts.

    Venture Capital Program

    SBA’s Small Business Investment Company (SBIC) Program is a public-private investment partnership created to help fill the gap between the availability of growth capital and the needs of small businesses. The SBA does not invest directly in small businesses, relying instead on the expertise of qualified private investment funds. The SBA licenses these funds as SBICs and supplements the capital they raise from private investors with access to low-cost, government-guaranteed debt.

    With these two sources of capital backing them, SBICs search across the United States for promising businesses in need of debt or equity financing. SBICs are similar to other investment funds in terms of how they operate and their pursuit of high returns. However, unlike other funds, SBICs limit their investments to qualified small business concerns as defined by SBA regulations.


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    Current SBA Loan Rates #sell #a #business


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    Current SBA Loan Rates

    You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here’s how we make money .

    For many small-business borrowers, government-backed loans are the holy grail. SBA loan interest rates are some of the most competitive among lenders.

    So keeping up on the Small Business Administration’s terms and rates is part of a smart approach to finding a business loan. The 7(a) loan is the SBA’s most popular product and offers a flexible sum of cash for a variety of uses, including managing daily operations, purchasing new products and refinancing high-interest loans. Business borrowers also find low-cost financing for land and other major purchases with SBA 504 loans.

    The SBA sets interest rate guidelines for lenders, which helps keep small-business owners borrowing costs low.

    Here’s a breakdown of SBA business loan terms and rates, including interest and fees.

    SBA loan rates

    SBA 7(A) LOAN TERMS:

    • 7(a) loans do not have a minimum loan amount and max out at $5 million. The average SBA loan was around $374,000 in 2015.
    • The SBA guarantees 85% of your loan if it’s less than $150,000 and 75% if it’s more than $150,000. However, it limits guarantees to $3.75 million.
    • SBA loans aren’t easy to qualify for. Read up on the qualifications for SBA loans to make sure they’re right for you.

    SBA 7(A) INTEREST RATES:

    7(A) LOANS REPAID IN LESS THAN 7 YEARS

    *The prime rate, hiked on Dec. 17, 2015, is 3.5%.

    Example: The maximum interest rate for an SBA loan of $25,000 or less, paid in less than seven years, is 7.75%.

    But interest rates make up only part of your expenses. Your APR reflects your true cost of borrowing, including your interest rate and all fees associated with the loan.

    How SBA loan rates are set. Interest rates for SBA 7(a) loans are the daily prime rate, which changes based on actions taken by the Federal Reserve, plus a lender spread. The spread is negotiated between the borrower and the lender, and can result in either fixed or variable interest rates. However, the SBA caps the maximum spread lenders can charge based on the size and maturity of the loan.

    A lender providing an SBA loan may also calculate interest rates using the one-month London Interbank Offered Rate plus 3% or the SBA’s optional peg rate instead of the daily prime rate.

    GUARANTY FEES

    7(a) loan guaranty fees are based on the loan amount and maturity date and apply only to the guaranteed portion of the loan. Lenders are required to pay the SBA the guaranty fee, but some pass the expense on to you. However, the SBA limits the maximum amount you will be charged.

    You ll pay no guaranty fee if your loan is less than $150,000. If it s more than $150,000 and matures in less than a year, you’ll see a 0.25% guaranty fee.

    If your loan is for more than $150,000 and takes more than a year to mature, you’ll be charged based on a three-tier system:

    • 3% on loans of between $150,000 and $700,000
    • 3.5% on loans of between $701,000 and $1 million
    • 3.75% on loans of more than $1 million

    CDC/504 loans

    Business borrowers looking to buy land, buildings or major equipment with long-term, fixed-rate financing can apply for SBA 504 loans. These loans are partially funded by certified development companies, nonprofit organizations focused on community economic development. The loans require collateral, typically the assets that are being financed, as well as personal guarantees from the principal borrowers.

    504/CDC SBA LOAN TERMS

    • 504 loans are available in 10- or 20-year terms: As of March 2016, 10-year term loans had an effective interest rate of 4.33% and 20-year term loans had an effective interest rate of 4.55%.
    • Fee percentages are fixed but reset every five years based on principal, often resulting in a lower payment for the borrower.
    • The minimum loan amount is $50,000; the maximum is $5.5 million.

    How 504 loan rates are set: Small-business owners seeking a 504 loan are on the hook for a down payment of at least 10% of the cost of the project. A traditional lender, such as a bank, puts up 50% of the loan, and a certified development company puts up as much as 40%. The SBA guarantees 100% of the CDC portion of the loan.

    SBA 504 loan terms are primarily made up of the following:

    • The Treasury bond rate: Loans with 10-year terms are priced based on the five-year Treasury bond, while loans with 20-year terms are based on the 10-year Treasury bond.
    • A guaranty fee that is paid to the SBA.
    • A servicing fee that is paid to the CDC.
    • A fee paid to the central servicing agent.

    When applying, you ll be quoted an effective interest rate, which is the sum of those three fees and the Treasury bond rate. However, you ll also pay a one-time fee of 2.15% to the SBA, as well as some additional fees, meaning your total cost of borrowing (or annual percentage rate) will be slightly higher than your effective rate.

    The bottom line on SBA loan rates

    SBA loans give you the best interest rates, though the application process can be complicated and time-consuming. If you find yourself in need of money fast, numerous online lenders can help you get the capital you need. However, they have less favorable APRs.

    Find and compare small-business loans

    If SBA loans aren t the right fit, compare other small-business loans to meet your needs and goals using our tool. We gauged lender trustworthiness, market scope and user experience, among other factors, and filtered lenders by categories that include your revenue and how long you’ve been in business.

    To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

    This post has been updated. It was originally published Jan. 8, 2016.

    You may also like

    Lender reviews

    See how different lenders stack up in NerdWallet’s expert reviews

    We want to hear from you and encourage a lively discussion among our users. Please help us keep our site clean and safe by following our posting guidelines. and avoid disclosing personal or sensitive information such as bank account or phone numbers. Any comments posted under NerdWallet’s official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise.

    2016 NerdWallet, Inc. All Rights Reserved

    Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.

    Additionally, this site may be compensated through third party advertisers. However, the results of our comparison tools, blog content and editorial reviews are based on objective analysis. For more information, please see our Advertiser Disclosure .


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    Small Business Administration (SBA) Definition #franchising #your #business


    #small business administration

    #

    Small Business Administration – SBA

    DEFINITION of ‘Small Business Administration – SBA’

    The Small Business Administration (SBA) is a U.S. government agency, formulated in 1953, that operates autonomously. This agency was established to bolster and promote the economy in general by providing assistance to small businesses. One of the largest functions of the SBA is the provision of counseling to aid individuals trying to start and grow businesses. On the agency’s website, (SBA.gov ), there is a wealth of tools to assist small businesses including a small business planner and additional training programs. Localized SBA offices throughout the United States and associated territories offer in-person, one-on-one counseling services that include business plan writing instruction and assistance with small business loans .

    BREAKING DOWN ‘Small Business Administration – SBA’

    The SBA offers substantial educational information with a specific focus on assisting small business startup and growth. In addition to educational events offered on the SBA’s website, local offices also provide more personalized special events for small business owners.

    The History of the SBA

    The SBA was established by President Eisenhower through the signing of the Small Business Act in the summer of 1953. In its more than six decades of existence, the SBA has been threatened on numerous occasions. The House of Representatives, controlled by the Republican party in 1996, had the SBA slated to be eliminated. However, the agency survived this threat and went on to receive a record budget in 2000. The SBA faced further threat by President Bush and his administration. Though attempts to cut the agency’s loan program saw significant resistance in Congress, the SBA’s budget was cut repeatedly each year, from 2001 to 2004, when certain SBA expenditures were frozen altogether.

    The SBA Loan Program

    The loan programs offered by the SBA are among the most visible elements the agency provides. The organization does not offer grants or direct loans, with the exception of disaster relief loans, but instead guarantees against default pieces of business loans extended by banks and other official lenders that meet the agency’s guidelines. The number one function of these loan programs is to make loans with longer repayment periods available to small businesses.

    The Future of the SBA

    As of 2016, despite numerous attempts to do away with the SBA entirely, many political officials and offices continue to support the agency. President Barack Obama and his administration have continually supported the SBA and remain backers of a substantial budget allotment for the agency. The SBA’s ability to offer loans has also been significantly strengthened by the American Recovery and Reinvestment Act of 2009 and the Small Business Jobs Act of 2010.


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    What SBA Doesn – t Offer #businesses #to #start


    #small business grants

    #

    SBA does NOT provide grants for starting and expanding a business.

    Government grants are funded by your tax dollars and, therefore, require very stringent compliance and reporting measures to ensure the money is well spent. As you can imagine, grants are not given away indiscriminately.

    Grants from the Federal government are authorized and appropriated through bills passed by Congress and signed by the President. The grant authority varies widely among agencies. SBA has authority to make grants to non-profit and educational organizations in many of its counseling and training programs, but does not have authority to make grants to small businesses. The announcements for the counseling and training grants will appear on grants.gov. If Congress authorizes Specific Initiative Grants, organizations receiving such grants will receive individual notifications.

    Some business grants are available through state and local programs, nonprofit organizations and other groups. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan. The amount of the grant money available varies with each business and each grantor.

    If you are not one of these specialized business, both federal and state government agencies provide financial assistance programs that help small business owners obtain loans and venture capital financing from commercial lenders.

    Application Forms for Non-Construction Grants

    Application Forms for Construction Grants


    Tags : , , , , ,

    What SBA Offers to Help Small Businesses Grow #business #stationery


    #small business help

    #

    What does SBA offer to small business owners? The programs are many and varied, and the qualifications for each are specific. SBA can help facilitate a loan for you with a third party lender, guarantee a bond, or help you find venture capital. Understanding how SBA works is the first step towards receiving assistance.

    SBA’s Role

    SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.

    Guaranteed Loan Programs (Debt Financing)

    SBA does not make direct loans to small businesses. Rather, SBA sets the guidelines for loans, which are then made by its partners (lenders, community development organizations, and microlending institutions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms.

    SBA loan guaranty requirements and practices can change as the Government alters its fiscal policy and priorities to meet current economic conditions. Therefore, you can’t rely on past policy when seeking assistance in today’s market.

    Bonding Program (Surety Bonds)

    SBA’s Surety Bond Guarantee (SBG) Program helps small business contractors who cannot obtain surety bonds through regular commercial channels.

    A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor’s responsibilities and ensures that the project is completed.

    Through the SBG Program, the SBA makes an agreement with a surety guaranteeing that SBA will assume a percentage of loss in the event the contractor should breach the terms of the contract. The SBA’s guarantee gives sureties an incentive to provide bonding for eligible contractors, thereby strengthening a contractor’s ability to obtain bonding and greater access to contracting opportunities for small businesses.

    SBA can guarantee bonds for contracts up to $5 million, covering bid, performance and payment bonds, and in some cases up to $10 million for certain contracts.

    Venture Capital Program

    SBA’s Small Business Investment Company (SBIC) Program is a public-private investment partnership created to help fill the gap between the availability of growth capital and the needs of small businesses. The SBA does not invest directly in small businesses, relying instead on the expertise of qualified private investment funds. The SBA licenses these funds as SBICs and supplements the capital they raise from private investors with access to low-cost, government-guaranteed debt.

    With these two sources of capital backing them, SBICs search across the United States for promising businesses in need of debt or equity financing. SBICs are similar to other investment funds in terms of how they operate and their pursuit of high returns. However, unlike other funds, SBICs limit their investments to qualified small business concerns as defined by SBA regulations.


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    Small Business Administration (SBA) Loans

    SBA Express Term Loan

    SBA 504 Loan Program

    • Best match for borrowers who need funds to expand, purchase another business or manage cash flow
    • Loan amounts: Up to $5 million
    • Benefits: Often easier to qualify; longer maturity terms, lower down payment on fixed assets
    • Standard terms: Working capital up to 7 years; equipment up to 10 years; real estate up to 25 years
    • Structure: SBA guarantees up to 75% (guaranteed portion capped at $3.75 million)
    • Pricing: Fixed and variable rate options
    • Best match for borrowers who need funds to expand, purchase another business or manage cash flow
    • Loan amounts: Up to $350,000
    • Benefits: Longer maturity terms, accelerated application process; SBA fees can be financed
    • Standard terms: Working capital up to 7 years; equipment up to 10 years; real estate up to 25 years
    • Structure: SBA guarantees 50% of the loan
    • Pricing: Fixed and variable rate options
    • Best match for borrowers planning to expand business through land acquisition, building acquisition, construction and equipment finance
    • Loan amounts: No maximum
    • Benefits: Lower down payments, favorable terms and pricing
    • Standard terms (Lender): Minimum 7 years for equipment or 10 years for real estate with up to 30 year amortization
    • Standard terms (SBA): 10 years for equipment or 20 years for real estate
    • Structure: Up to 40% or $5 million maximum funded by the SBA
    • Pricing: Favorable pricing; fixed for 20 years

    SBA Express Sub Programs for Specific Applications

    • Export Express loans up to $500,000 are available for companies that export goods and want to expand or who need working capital to enter a new overseas market.

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