Government Loans for Starting a Business
To start a business is not an easy thing to do. It requires immense dedication, commitment as well as money. In the early stages, while making the idea come to life, investments are usually taken from friends, family or other close relatives. There are other options to consider as well. The government agencies provide small business loans and sponsor companies to establish themselves. The internet is a hub of dubious information. There are numerous websites which would state that the government loans can cover the start-up costs of small businesses with no personal risk involved. These agencies do not provide the money directly to the company owners. Rather they offer guarantee and incentives to the private lenders, say for example. Banks or credit unions etc. here are a few ways of how the United States Small Business Administration (SBA) works.
Instructions
-
1
The Small Business loans are usually provided to those new companies who follow their common size standards. The mining and manufacturing industries should have 500 employees. Wholesale trade industries should comprise of about a hundred employees, $28.5 million for the general and heavy construction industries, $6 million for retail and service industries, $12 million for the trade contractors and 0.75 for most of the agricultural industries.
-
2
25 % of the industries are said to have a standard size that is distinct from the levels as mentioned earlier. There is variation in terms of employees and the nature of the company. There is a variation from $0.75 million to $28.5 million in terms of the size standards.
-
3
For the individuals to avail such loans there is a procedure that they must follow. Individuals must submit the grant on their behalf. They will not be eligible to avail the loan if the grant is submitted on behalf of the company, organization, government or an institution. The individual has to sign the grant application and all the legal papers related to it. Once an individual has gone through this process, he will benefit from all the incentives given by the agency as per quota of an individual and will not be considered for company benefits.
-
4
Many entrepreneurs are dependent on the money they get from their close relatives. The business loans which are funded by the government reduce the exposure of the personal line of credit. There is a sense of security and the government based agencies help set up the company. Money should not be taken from just one source and hence small amounts of loans from banks and credit unions should be considered.
 works.Next%20stop%3A%20Pinterest "Pin It")
