Small business finance is what the SBA can help you get necessary capital for your business.
Small business finance programs are made available by the government through the Small Business Administration. It can be difficult for a new business without established business credit history to borrow money from a bank, and that is why the SBA assists small businesses with their capital needs.
The SBA does not loan the money directly to each business, but they guarantee 75 percent of the loans made by private lenders and banks. They guarantee a maximum of $750,000 for the loans because the highest loan that can be taken out by the SBA is $1 million. To qualify for SBA small business finance you have to prove that you have been turned down by a conventional lender like a local bank that is not tied to the SBA. The guarantee by the SBA increases the chances that your business will receive funding because you aren’t the only one attempting to guarantee the loan.
If you haven’t established your business credit scores standard banks will want more collateral from you that will be used to secure the loan. Most entrepreneurs don’t have enough capital for this, so they are denied for financing most of the time. The SBA approved lenders do not put as much weight on collateral, and they put more on good character for the applicant, the management capability of the applicant, and the owner’s equity contributions including both financial or cash equity and sweat equity or investment of time and experience into the business.
To begin your quest for an SBA approved lender that will help you get small business finance you can use our free capital search engine. You will have direct contact information for each of these lenders, and they will help you put together your loan request package. You will then submit the loan package to the SBA for approval into the program. Upon approval the SBA will send a letter showing their intention to guarantee the loan. After that letter is received the lender will proceed with the financing.