So you have probably heard of the small business administration if you currently run or plan to run a small business. But who is the SBA and what can they do for you and your business? We’ll discuss some of the more important points about this in today’s topic.
First, the SBA is a government run organization designed to help business owners and potential owners like you get a loan. They do this through a number of mechanisms designed to help you plan for your loan, find lenders that will work with you and ultimately find a good deal on a loan through their loan program. They were established in 1953 and operate at the federal level. To date they have assisted several tens of thousands of companies acquire funding, their mission is to strength the American economy by strengthening business. So how do they do this specifically?
The first step they can help you make is to actually plan your business. A representative from your local office should be able to sit down with you to help you prepare a formal business plan. This is different from a more general outline that you no doubt already have, it is an item by item account of all potentially expenses and sources of revenue. Many new owners skip over this step, sadly there is very little overlap between the methodical work this requires and the go attitude of most entrepreneurs, but if you can sit down to plan your journey more precisely, with the help of the SBA you’re chances of success will be much greater.
Also, having a solid plan is a prerequisite of most lenders, and certain of most venture capitalists, so it may be necessary whether you like it or not. This is the second major thing that the small business administration can help you with, find lenders. They can match you with lenders who work with companies the size of yours, and sometimes even specialty lenders that work with businesses in your industry. Once they find you a good fit they go one step further to complete the package of assistance.
They will help you apply for an SBA loan, these are not funded by the small business administration directly, but they are approved by them. The loans have to meet strict guidelines in terms of maximum interest rate, and fees. Typically maximum rates are based on the current prime rate, which you can check by doing a Google search for prime rate. This concludes the list of services provided by the small business administration, I hope this gives you a clearer picture of their function.