The U.S. Small Business Administration sponsors several different programs to help promote the growth of small businesses. Today, we will discuss some of the things the SBA does to promote growth in small businesses:
The SBA offers venture capital to small businesses through its Small Business Investment Company Program. SBICs are managed investment funds that the SBA regulates. SBICs provide financing to small businesses in the form of equity or debt. SBICs operate similarly to private and venture capital funds. However, unlike these other funds, SBICs only invest in qualified small businesses.
The SBA’s Surety Bond Guarantee Program provides assistance to small contracting businesses that can’t obtain surety bonds on their own. Surety bonds are agreements made between a project owner, a contractor, and a surety. The agreement requires the contractor to meet the conditions of a contract. If he or she does not meet the contract’s conditions, the surety will take responsibility for the contractor’s job and ensure that the tasks detailed in the contract are completed.
Under the SBG Program, the SBA enters into an arrangement with a surety in which the SBA promises to pay a percentage of the cost if the contractor fails to meet the terms of the contract. This guarantee encourages sureties to work with small business contractors. The SBG program will guarantee surety bonds for contracts as high as $5 million.
The SBA is not a lender. However, it publishes guidelines for loans that its partners make. The SBA also guarantees that its partner lenders will receive repayment for their loans, which reduces the lenders’ risk. When small businesses apply for loans from the SBA, they are actually applying for loans offered by SBA partners that carry guarantees from the SBA. SBA-guaranteed loans are not always available to borrowers who have access to other reasonable financing.
To learn more about obtaining assistance from the SBA for your small business, visit UnsecuredBizLoan.com. At UnsecuredBizLoan, you can find out more about the financing options available to your business. You can also complete an online application for a loan backed by the SBA.