| In order to give a boost to the spirit of | | | | loans from lending institutions. These loans are provided |
| entrepreneurship of its citizens, the federal government | | | | by commercial lending institutions with the SBA acting |
| provides business loans to individuals to help them start | | | | as guarantor. |
| a small business. The government's Small Business | | | | The Certified Development Company (CDC) Loan |
| Administration (SBA) handles these loans usually by | | | | Program aims to assist those seeking to own real |
| acting as a guarantor for loans provided by other | | | | estate or machinery for expansion or modernization. |
| institutions. In rare cases, the loan is provided directly by | | | | This program provides a long term loan at a fixed-rate |
| the SBA. | | | | of interest. Usually, ten percent of the loan amount |
| Besides the SBA, there are other government | | | | needs to be contributed by the small business owner in |
| agencies that have programs of their own that provide | | | | the form of equity. |
| loans and grants to small businesses. In order to get | | | | The micro loan program aims to provide short-term |
| these loans, a small business owner or entrepreneur | | | | loans with a maximum limit of $35,000 primarily for |
| has to submit a proposal showcasing the blueprint of | | | | working capital and inventory requirements. These |
| the business plan and the specific capabilities that he or | | | | funds cannot be used to pay off existing debt. This |
| she possesses to run the business effectively. | | | | loan is also available for non-profit childcare centers. |
| The small business owner applying for the loan needs | | | | The loan prequalification program permits those |
| a positive credit score in order for the loan to be | | | | seeking loans of amounts less than $250,000 to have |
| approved. These credit factors are reviewed and | | | | their application analyzed and potentially sanctioned by |
| analyzed by the authorities before a decision is made | | | | the SBA before lenders are approached for |
| to extend the loan. | | | | consideration. |
| There are several categories of loans programs | | | | Government small business loans play a vital role in |
| provided by the SBA. One of these is the Basic Loan | | | | fostering the spirit of entrepreneurship and should be |
| Guaranty program, which aims to help small | | | | looked on as an important means of funding for those |
| businesses who may not be normally eligible to receive | | | | looking to start their own business. |