One of the hardest parts of starting a business is finding money to fund that business. Small business loans can help you get your start-up off of the ground. To apply for a small business loan, you usually need to contact a bank or other lender who will discuss your options with you. There are several different types of loans available for start-ups and small businesses.
The microloan program is sponsored by the Small Business Administration. Don’t let the term “micro” fool you. These loans can be up to $50,000 with most businesses receiving around $13,000. Microloans are available to all business, but come with one stipulation. If you receive one, you have to complete business training and receive technical assistance, which should be provided by the lender.
You receive a microloan through an intermediate lender, who may require you to personally guarantee the loan in case the start-up doesn’t work out. You can use the loan to buy supplies or equipment but cannot use it for to buy real estate or to pay off another loan. The interest on the loan may be between 8 and 13 percent. Usually, the loans have a term of six years.
Other small business loans for start-ups include 7(a) loans, also administered by the SBA. A lender may feel more comfortable giving a start-up that has not yet proved itself financially a 7(a) loan as these loans are backed partially by the SBA. You will also have to guarantee a portion of the loan, as will any other owners in the business. You can apply for a 7(a) loan through a local bank. Depending on the size of the loan, you may have to fill out a short application and will receive a response within 36 hours.
For more information, go to Small Business Loan at http://www.unsecuredbizloan.com/small-business-loan