How Do Small Business Loans Work?

Small Business Loans

If you have a small company for which you’re looking to get funding, you’ll want to apply for small business loans programs. How do these programs work, and who furnishes them? We will be discussing this in further detail in today’s article.

A growing segment of niche lenders have come about due to a lack of bank funding for small companies. After the credit crisis, banks are very wary to give out small business loans. As such, these industry specific niche lenders have come about to properly identify companies that have potential in their fields to give them the funding that they need.

Instead of focusing primarily on credit scores and revenue, these lenders prefer to look at your company in light of its likely future success. In many ways, these operate more like venture capitalists than lenders.

If you are still looking to get funded through a bank, your best bet is to apply for a federally subsidized program, such as the SBA loan program. The reason for this is that these programs subsidize the loan. They even protect the loan in the case of a default. The bank will be able to capture a higher interest rate, and they’ll be able to avoid some of the risk of having a loan go unpaid.

You should look for specific subsidized loan programs in your industry, as certain programs are based on the perceived societal benefit that your company provides. For example, businesses that work in distressed neighborhoods may qualify for these specialized subsidized small business loans, or even grants.

For more information, you should contact your local government offices.

For more information, go to Small Business Loans at

How Do Small Business Loans Work? was last modified: November 8th, 2011 by Amit Kraidman
This entry was posted in Small Business Loan. Bookmark the permalink.

3 Responses to How Do Small Business Loans Work?

  1. Kesha Eakle says:

    as soon as I observed this web site I went on reddit to share some of the love with them.

  2. Terry Ruscio says:

    You are a very clever person!

  3. Ocie Rehman says:

    As a Newbie, I am permanently browsing online for articles that can help me. Thank you