You might be running a small business for which you are trying to get the funding you need to expand your company. If that’s the case, SBA loans may be a good choice for you. These loans come in two varieties: private capital funded loans that are guaranteed (up to 90%) by the Small Business Administration, and loans directly funded by the Small Business Administration. Which type you use and how much you get out of the program will depend on the amount of legwork you put in, as well as on your circumstances.
There are too many direct funding programs to count, but each of them follows a certain pattern. They can be directly funded because of the perceived need of the borrower, such as with loans for minorities, women, etc. Otherwise, they are directly funded because of the perceived need of the community that is being served.
For example, if you run a non-profit in an area hard hit by a natural disaster, you’ll be much more likely to get funding as part of one of the direct funding programs. To see if you qualify, you should call your local chapter of the Small Business Administration. These programs have very favorable rates when compared to private capital.
The rest of the Small Business Administration programs fall under a loan guarantee umbrella. Financial institutions, both large and small, fund them all. The advantage of these programs is that they have caps on the amount of interest the bank is allowed to charge. Not all banks participate. Also, not all borrowers can afford to borrow money right now. This is true even under the best terms and conditions.