People who are trying to start their own business find a lot of truth in the phrase, “it takes money to make money.”
That money is out there, in the form of loans, grants and other programs. Here is background on some of the options and some tips on how to apply for the money you need for business growth.
The U.S. Small Business Administration has a number of loan programs designed for those who may have trouble qualifying for a traditional bank loan. SBA loan applications are available at some banks and lending institutions, and guarantees what the SBA will repay if you default on your payments.
The most basic and most used business loan program is the 7(a), while the Certified Development Company 504 provides fixed-rate financing for things such as land and buildings. The SBA Microloan Program offers small, short-term loans as well as business training and technical assistance.
The federal government does not provide grants for starting and expanding a business, but some business grants are available through state and local programs, non-profit organizations and other grounds. These grants usually require the recipient to match funds of combine the grant with other forms of financing, such as a loan.
Venture capital assists companies which are not good candidates for loans from traditional sources because of size, assets and stage of development. These types of investments are typically cash in exchange for shares and an active role in the company. The SBA New Markets Venture Capital Companies Program is geared toward development in low-income areas. The SBA selects participants in the program and makes sure that public policy objects are met.
Finding the money
Federal, state and local governments offer a wide range of financing programs to help small businesses start and grow their operations. These programs include low-interest loans, venture capital, and grants for scientific and economic development.
SBA Loans and Grants Search
Based on the SCORE article, "Loans, Grants and Funding."
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© SCORE. All rights reserved. This article provided by SCORE (www.score.org), Mentors to America's Small Business. Since 1964, SCORE has helped over 9 million aspiring entrepreneurs and small business owners through mentoring and business workshops. Get free advice from more than 12,000 volunteer business mentors in over 340 chapters across the nation. Learn more at www.score.org