If you're planning on starting a small business, chances are you aren't looking for millions of dollars to do it.
To be honest, in most cases $150,000 or less should be plenty. This means you won't be on the radar for most venture capital and private equity firms. Well then, where can you go if you don't need millions, but could use up to $150,000 to start your business?
One of the best forms of financing available to you is the SBA 7(a) loan program.
The SBA (Small Business Administration) is a government sponsored entity that was created specifically to help small businesses in all different kinds of ways. One way in particular is to help the first time business owner have a chance at borrowing money to start their first business. The SBA accomplishes this by partnering up with banks through the 7(a) loan program.
how it works:
The Bank agrees to provide loans to small business start-ups and the SBA agrees to guarantee a substantial portion of the loan (up to 85%). So if the business was unable to repay the loan, the SBA will write a check to the bank for the amount they guaranteed.
This is great news! As opposed to a bank telling you that your business needs to have 2 years of operation before it will consider lending you any money, you now have a chance to borrow money right out of the gates.
So now you know you can go to your bank and ask for a SBA 7(a) loan to get financing for your start-up. Next, there are several things you need to get approved for a SBA 7(a) loan.
Quick list:
Source:www.ezinearticles.com
To be honest, in most cases $150,000 or less should be plenty. This means you won't be on the radar for most venture capital and private equity firms. Well then, where can you go if you don't need millions, but could use up to $150,000 to start your business?
One of the best forms of financing available to you is the SBA 7(a) loan program.
The SBA (Small Business Administration) is a government sponsored entity that was created specifically to help small businesses in all different kinds of ways. One way in particular is to help the first time business owner have a chance at borrowing money to start their first business. The SBA accomplishes this by partnering up with banks through the 7(a) loan program.
how it works:
The Bank agrees to provide loans to small business start-ups and the SBA agrees to guarantee a substantial portion of the loan (up to 85%). So if the business was unable to repay the loan, the SBA will write a check to the bank for the amount they guaranteed.
This is great news! As opposed to a bank telling you that your business needs to have 2 years of operation before it will consider lending you any money, you now have a chance to borrow money right out of the gates.
So now you know you can go to your bank and ask for a SBA 7(a) loan to get financing for your start-up. Next, there are several things you need to get approved for a SBA 7(a) loan.
Quick list:
- A Business Plan.
- Business experience that's related to the business you're trying to start.
- Cash, in most cases 30% of the total amount you'll need to start your business.
- Good credit.
Source:www.ezinearticles.com
