How can the Small Business Administration help you grow your business? Take a quick look at how the SBA works.
First, note that the SBA has a pretty wide definition of what is meant by "small." You don't have to be a mom-and-pop operation to take advantage of SBA loans. The cutoff limits vary by industry, but it's possible to have hundreds of employees and still be eligible for SBA assistance.
However, there are four criteria all businesses must meet to obtain an SBA loan: They must be a for-profit business, they must do business in the U.S., the owners must have invested their own time or money in the business, and they must have exhausted all other financing options.
How does the SBA loan program work? The SBA doesn't provide loans directly. If you need a loan, ask your lender whether it works with the SBA, or use the SBA to help connect with lenders. It means more paperwork and time to get an SBA loan guarantee, but getting the SBA involved can make the difference between getting the loan or not. You can connect with SBA lenders through the SBA Lender Match program. This speeds up the lending process.
There are multiple SBA loan programs. A basic loan program can help existing businesses and startups. These are flexible loans that can be used for lots of business purposes, including for working capital. There is also a special series of loans for property and equipment for businesses in specific areas targeted for development. The SBA also offers an array of special loans for veterans.
The SBA can provide disaster assistance to help small businesses that were hit by disasters — physical and economic assistance. For example, the SBA can provide loans to self-employed business owners who've lost their jobs due to disaster.
Help Beyond Loans
The SBA also offers, in partnership with other agencies, grants for research and development. The goal is to encourage businesses to do research that has potential for commercialization. Some grants are for businesses run by socially and economically disadvantaged persons.
In addition, the SBA can help businesses get through the complex process of competing for government contracts; the SBA aims to level the playing field. After all, many government agencies require that some percentage of their purchases be set aside for small businesses, and you may be able to get in on these contracts.
Women and minority business owners can get specific assistance. The Office of Women's Business Ownership provides help to women starting and running small businesses. Minority business owners, disabled and disadvantaged business owners, and immigrant and foreign national business owners can get special loans and help to start businesses.
The SBA also partners with SCORE, a network of volunteer expert business mentors with more than 10,000 volunteers in 300 chapters. You can find individual help for launching new companies or divisions and for business plan writing and marketing, for example.
Now that you see all that you can garner from the SBA, you may decide to visit your local SBA office to see what services and training are available in your area.
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