Resources – Getting Started & Next Steps

Advantages of the Small Business Administration (SBA)

The Small Business Administration or SBA is there offering their services to potential small business enterprises in terms of providing for the loans that they need to help their business going through its beginning stages. What is SBA? The Small Business Administration is an agency started during the 1950’s designed to help American small businessmen in four key areas, namely, management, advocacy, procurement, and financial aid. The federal government is hands off with respect to the policies of this administration. Business loan programs, investment programs, disaster loan programs, and bonding for contractors, are the other services provided by the Small Business Administration for small businesses.

The business loan program is the most significant among all the programs offered by the SBA. The SBA offers several programs to aid small businesses looking for funding and this is the best source or solution to the lack of funds that most small businesses are facing these days.

SBA does not offer direct loans. The SBA will provide the small business guidelines in applying for a loan. So, the procedure is to apply a loan from any financial institution, and the SBA will vouch for the repayment of the loan on your behalf. Applying a loan from the SBA, in reality, is applying for a commercial loan, custom made according to the requirements of the SBA with its seal of approval. But, if you have other sources of financing on reasonable terms and conditions, you will not be eligible for this SBA loan. The policies of the SBA can change if there are changes in the fiscal policies of the government.

Venture funding for small business is another service that SBA offers to small businesses and this is done through a partially public and partially private partnership. The responsibility of the SBA which concerns privately owned funds is to manage, license, and regulate them. Their terms and conditions are reasonable but SBA usually limits investments to legitimate small business only and not to all businesses.

SBA also has a bonding program to help small venture contractors acquire surety bonds, which is a bond signed between three parties – the contractor, a surety or a guarantor, and the project owner. If the contractor fails to complete the project, the surety take the responsibility.

These are the benefits that small businesses can gain from the SBA. Because of the financing programs offered by the SBA to small businesses, a lot of them have become successful over the years. The SBA is the agency to approach if you are a small business enterprise or if you are a venture contractor on a small business project needing immediate financing for your project, because they have services and programs designed to help small businesses like yours.

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