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Considering SBA Loan? |
I have been seriously considering obtaining an SBA loan or some other type of small business grant to upgrade my 5 year old, successful, medical billing business. When I do the research I am so bombarded and overwhelmed by all the possibilites and hidden agendas out there, that I choose to "think about it" and I still remain thoroughly confused. Any simple, straightforward suggestions based on experience? I am a woman and I am also techincally "disabled". I don't really think that matters, but some of the grants and loans out there indicate that perhaps that would qualify me for their programs....addendum: very good credit, homeowner, etc..... Focus on getting a loan as it is hard to find grants to start a business. Unlike the myths that some perpetuate, federal government and even private foundations hardly give grant money for a for-profit business. Even SBA does NOT give out grants. From the SBA website http://www.sba.gov/mostrequesteditems/co... "The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. (See http://www.sba.gov/financing for more information) While SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments." You can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov - these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture. Here is a listing of federal grants for small businesses. See if there is any available for individuals for starting a business -- THERE'S NONE. http://12.46.245.173/pls/portal30/catalo... You stand a greater chance of getting a government-guaranteed loan through the Small Business Administration http://www.sba.gov/financing than a government grant. Read the SBA Financing page to learn about criteria needed for borrowing. If you're applying for a loan and if it is a big amount, banks and even the SBA may consider other factors aside from your credit: - A business plan explaining what the business is - Your background and experience in the business -- in my experience, this is KEY in the eyes of the bank because they want to make sure that you know what you are doing and that you can make the business work. If you don't have any experience with the business, have someone on board that knows the business to give banks assurance that someone will guide you - Your credit factors because it shows your dependability and how well you handle credit. They will do a credit check on you and poor credit history may be frowned upon, or even reason for the disapproval of your loan application - Your collateral. Banks, even SBA guaranteed loans, want the borrower to show collateral. They want to be guaranteed that somewhere somehow they can get payment from you - Condition or terms of loans. Banks would want to know three important things: "How much money are you requesting? What will it be used for? and For how long will it be needed?" Banks oftentimes prefer to approve loans for items that can be identified, has lasting value, and can be repossessed and sold if things fail. Aside from banks I suggest you consider microloan providers. They typically fund up to $30K Read about the SBA Microloan Program http://www.sba.gov/financing/sbaloan/mic... and you can find SBA Accredited Microloan Providers here http://www.powerhomebiz.com/vol145/micro... The SBA has various types of small business loans. The Basic Loan Guaranty program is designed for those small businesses who will not get the loans from the lenders. These loans are disbursed by the commercial lenders with SBA acting as a guarantor. The Certified Development Company (CDC) Loan Program is ideal if you want to buy a property or machinery to expand or modernize your existing operations. This is a long-term loan with a fixed-rate of interest. You need to contribute 10% of the amount as equity. http://debts-to-wealth.com/category/gove... |
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