The U.S. Small Business Administration is a federal agency that was designed to support the launching of new businesses and the development and growth of existing business. The federal government organization has created a number of programs that millions of small businesses in the U.S. benefit from every day. In this blog I’ll outline what those programs are and how you can take advantage of them to start or grow a small business. If you’re ready to take your small business to the next level or simply realize your dreams of being a small business owner, keep reading.
Programs Offered by the U.S. Small Business Administration that Can Help You
Small Business Lending for Small Businesses – The Small Business Administration doesn’t provide loans or lines of credit directly to small businesses. Rather, they lend the money to intermediary lenders (at very low interest rates), and those intermediaries re-lend the money to small business owners. The Small Business Administration also provides a “guarantee” to these intermediary lenders, which encourages them to lend money when they normally would not. That guarantee consists of promising to repay the lender up to 85% of the loan or line of credit should the borrower default. This can vary from lender to lender so it’s important to ask the lender if you are interested in knowing.
A few popular SBA loan programs include—7(a) loans, CDC/504 loans, CAPLines (Lines of Credit), Export Loans, Microloans, and Disaster Loans. SBA Loans can be used for a variety of different business expenses including purchasing inventory and supplies, purchasing commercial real estate (for brick and mortar locations), covering payroll, and importing and exporting products, etc. You can go here to find SBA approved lenders that offering small business loan programs that you can apply for to fund your business.
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Online Training for Entrepreneurs – The Small Business Administration website is vast. It’s full of information and advice for entrepreneurs and small business owners that want to learn as much as possible about starting, growing, and sustaining a profitable business.
Government Contracting – The federal government purchases more products and services than any other organization in the world. More than $500 billion dollars in contracts are awarded to businesses annually. At least 23% of that amount is awarded to small businesses. There are special government contracting programs for small disadvantaged businesses, women-owned small businesses, service-disabled veteran-owned small businesses, and businesses located in historically underutilized business zones (HUBZone program). Click here to learn more about how your small business can become a contractor for the federal government.
How Your Business Can Benefit from the Programs Offered by the U.S. Small Business Administration
Access to Capital – The U.S. Small Business Administration provides access to capital for small businesses through its SBA lending programs. You can benefit from this by finding and connecting with approved SBA lenders. The SBA offers a search tool on their website that can be used to find all of the SBA approved lenders across the country.
Training & Development – You can greatly benefit from the online training and development programs offered by the U.S. Small Business Administration. There are many training programs that teach you everything from “how to write a business plan” to “how to raise capital from an angel investor”. These are all FREE training programs. Entrepreneurs and small business owners can also use these trainings as continuing education for their staff. The purpose of the training is to equip entrepreneurs and small business owners with the knowledge they need to build profitable businesses.
Technical Assistance – The SBA partners with organizations like Small Business Development Centers and the Women’s Business Center to offer technical assistance services to entrepreneurs and small business owners. Technical assistance can include business plan writing, loan application assistance, and ongoing business consulting. Entrepreneurs and small business owners can take advantage of these free services to start or grow their companies.
LenCred Can Also Help You with Access to Capital
The U.S. Small Business Administration isn’t the only organization that helps capitalize small business in America. LenCred also helps entrepreneurs and small business owners fund their companies. LenCred specializes in analyzing the personal and business credit history of borrowers applying for small business financing. In addition, the team is also good at determining which type of small business financing is the most suitable for your particular business. After analyzing your personal and/or business credit and finding the appropriate lenders, your LenCred advisor will help you submit the loan application and appropriate supporting documentation to the lender.
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The Difference Between LenCred & the U.S. Small Business Administration in Regards to Capital
Although the LenCred team can help you get various types of small business financing, they specialize in unsecured business credit. In regards to the U.S. Small Business Administration, they offer many different types of small business financing and don’t specialize in one specific area. Furthermore, neither LenCred nor the U.S. Small Business Administration are direct lenders. In addition, unsecured business credit can be used to pay for any business expenses, while SBA funding has restrictions.
Get up to $50,000 or More in Unsecured Business Credit
If you have a good personal credit history, you may easily qualify to get approved for up to $50,000 or more in unsecured business credit. As a rule of thumb, you should be able to meet the following personal credit requirements to get approved for unsecured business credit:
- No bankruptcies
- No more than 2 unpaid collections/public records
- No more than 4 late payments in the last 24 months
- At least 4 year old credit history profile
- At least $5,000 in available credit limits (i.e. personal credit cards)
- At least $3,000 on a single revolving account (i.e. a personal credit card)
- At least 1 revolving credit account (i.e. personal credit card)
- No more than 7 inquiries on any one credit bureau in the last 6 months
- No more than 10 combined inquiries on Transunion and Equifax
If you’re not sure whether you meet the personal credit requirements to be approved for unsecured business credit, submit a pre-qualification application online and a LenCred Advisor will contact you to schedule a free consultation.
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