Personal Finance Tips

Ever heard the saying, “It takes Money to make Money”? The principle of borrowing money from banks and other credit agencies to make money has been a relatively basic assumption since early trade days. Existing business owners may want to expand their business, buy more inventory, or even hire more employees. New business owners need start-up capital to get all the balls rolling. Many times businesses take out loans, just because they can. It helps build good credit standing. When discussing the purposes of a business loan, one must look at the various types of loans available. Many times, the reasons your business may need a loan don’t fall under reasons the bank feels you need a loan. Here are a few examples of types of loans available and the functions these loans are used for:

o Short-term loans are usually used for short-term working capital for a business temporarily in need of cash. These loans may be based upon seasonal fluctuations, and other short-term problems that a business may encounter. Usually, these loans are paid within 1 year.

o Intermediate loans are often used for businesses that are starting up. These loans may be used to build inventory, buy equipment, or increase working capital. Working capital is money needed for business purposes such as paying employees, maintaining good over-head, and other business needs.

o Long-term loans can be given to business owners that are well established and wish to increase their fixed assets, for related business acquisitions, and for expansion. Long-term loans may be given to start-up businesses, as well. Usually for purchases of land or buildings, construction efforts, and long-term working capital, these loans have terms that run 3-5 years.

o Government small business loans are available through financial institutions, as well. The government guarantees these loans if certain criteria are met regarding the business and the business owner. These types of loans can be used for various reasons: the purchase of land or buildings, new construction or expansion, to acquire equipment, machinery, furniture, fixtures, supplies and materials, and to refinance existing business debts that have higher rates and unreasonable terms. These loans can be used for both short term and long term working capital as well.

Most commercial banks, credit unions, and even investors expect business owners to have a well-thought out plan regarding their business. These business plans should incorporate the usage of loans in a very decisive manner.

There are a number federal small business loans from the US government available to the entrepreneur. Who the loans serve and their purpose change depending on the loan product, but the government does want to see small businesses grow. Small businesses employ more people than large businesses and is strong growing trend. Additionally, as more people lose their jobs and can no longer find comparable work, many will turn to starting their own business.

The SBA has a number of loan products available for the entrepreneur. Sadly, start-ups may have trouble getting approved, but once established a business should be able to pursue them without problem. Federal government small business loans start with the SBA Community Express loan. This a low document loan with quick approval, but the lending amounts are lower. The primary SBA loan program is the 7(a) Loan which has a high maximum lending amount. One works with a bank to get a loan guarantee from the SBA. The loan requirements are rigid and turn around time can be long. Many banks will simply approve a loan if one looks like they will get approved, rather than wait for SBA acceptance. The SBA also has loan products for construction, bonding, exporting, community development, and revolving lines of credit.

However, the SBA is not the only small business loan available from the federal government. The USDA has a loan program available to businesses in rural areas. Then the government also helps community development organizations lending money. HUD gives money to community groups that they can lend to small businesses. Other agencies do the same, provide seed money to community groups to loan to small businesses. The idea is that this money keep revolving, and the government only has to seed once.

Also, the government provides grants to numerous small business centers. These centers help entrepreneurs get financing from local lenders or they can tap the government resources. This is a cost effective way the US government gets small businesses started and keeps them growing.

You may not know it but it is possible for you to get free money from the government to begin a small business of your own. It takes some time to apply for the government small business loan grants but you can do it easily if you are organized. You need to have a good marketing plan as well as a business plan to apply for the funds. There are many businesses which fail as they do not have enough cash so this can be very helpful for your small venture.

You can apply for many kinds of funds for your venture to make it a success including:

o Government small business loans
o Grants
o Low-interest loans
o Charitable scholarships
o Providing you the capital
o Awards

It is essential to have a proper business plan and there are many institutions that will help you make it. Some of them include:

o Small business administrations
o Economic development Councils
o Other organizations in the community

When you apply to various financial institutions asking for money for your needs they will check your financial and marketing plan and tell you what you can do to improve your chances of getting the financial aid. The government wants the these small companies to do well as that is why gives funds as low-interest loans and awards.

There is not a very good rate of success for small businesses as many of them don’t survive for the first five years because of lack of money. One way to be successful is that you must be prepared to have enough money to manage your venture for the first five years.

You have been thinking about it for a long time! That perfect business idea has been incubating in your mind and you just want to let it out. No capital? All you need is a small business loan to get you started on the road to success. It’s easy. Small business loans for woman especially in the minority sector are gaining importance today. Women own 38% of businesses in the United States. Our economy is finally opening up to providing woman with adequate venture capital to start a business. Finding venture capital is very important. But finding it from the right source is even more important. Today there are different institutions that provide small business loans for women. Wondering where to start? Let us be your guide into identifying small business loans for women.

The government offers small business loans for women, minorities and start-ups.

U.S. Small Business Administration or the SBA offers small business loan programs for women who may not be offered business loans by other institutions. A small one-page application can get you a loan to the extent of $150,000 and to be eligible you need to be a woman, a minority group, or a veteran. Preference is given for woman from low and middle-income groups. Such small business loans for woman have been instrumental in providing start-up capital to many industrialists.

CAPLines offer five different kinds of loans especially for the construction of a commercial establishment. These are short-term working capital loan programs tailor made for women wanting business loans. Women can take a small business loan up to $200,000.

Government business loans for women can also take the form of 504 loans, Defense loan and Technical loans, Physical disaster business loans, Community Adjustment and Investment, Export Working Capital Program and International Trade Loan, all provided by the government.

Small business loans for woman can also be sourced from Women’s Business Grants. This specialized organization offers small business loans specifically for women to support new and existing businesses. They have two programs namely the New Business Grant and the Existing Business Grant. The New Business Grant can get you a loan of $100 to $5000 and the Existing Business Grant ranges from $1000 to $5000. So the next time you need to expand your infrastructure or fund a new product, you know where to look.

Small business loans for women and women minority groups are not that difficult to find anymore. There are several well-reputed firms offering to provide small business loans for women apart from government small loans that are most popular today. So just go ahead and dream big! It could be a reality some day!

A US government small business loan is a great way for companies to receive financial help in beginning or maintaining a successful venture. These financial programs were created to help companies in the United States succeed in their endeavors. This does not mean, however, that everyone in the country will be granted US government small business loans. There is quite a lot of preparation and research that needs to go into the success of receiving this type of funding. “Be ye strong therefore, and let not your hands be weak: for your work shall be rewarded” (2 Chronicles 15:7).

An individuals first stop should be to the local chapter of the United States Small Business Administration (SBA) office. The SBA will be able to help the interested person understand everything about applying for US government small business loans. Organizations will have resources that will help the individual understand their finances and will even help them write a plan. This can be a great help if the person is just starting out and not sure what information is needed to get a US government small business loan.

Once a person gathers information about US government small business loans, they can start their plan of action. Individuals must make sure they have all written materials in line when applying for a US government small business loan. The last thing a person will want is to be denied simply because of insufficient documentation. They will need to provide financial statements for at least the past two years, which include incoming and outgoing money. When applying for this funding it is also important that the person have a clear definition of what the company is about. It is nice for lenders to see the organization is or can be profitable, but if they can’t get a clear picture of how this is or will be accomplished, they are likely to deny funding.

There are great opportunities for small companies to succeed through the help of a US government small business loan. If a person has the right documentation and the right attitude about a venture, there is a much better chance they will be accepted for any US government small business loans they apply for. Individuals must remember that assistance is available for businesses that will help the economy. Lenders, especially those working for United States government funding programs will look for the positive attributes that a company will bring to the surrounding areas economic growth and development.