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Places To Look For A Government Issued Small Business Loan

Places To Look For A Government Issued Small Business Loan

Small businesses are the lifeblood of any successful economy. Entrepreneurship is the basis of economic growth and low unemployment for most countries. However, small businesses are also much more risky endeavors which may not receive the appropriate level of financing. In order to be successful all avenues should be considered when seeking funding. Fortunately, federal and state governments have numerous programs and agencies which can facilitate small business funding.

When an individual has an idea for a new small business it can often be extremely difficult to receive the funds to successfully launch a start-up. This is because most small businesses fail within their first year and often come with very high risk. Seeking funds from family or friends may not be realistic during tight economic times and looking to a local bank or other financial institution is even less likely due to stringent requirements when seeking a loan. This does not mean however that funds are not available for small businesses.

The federal government has had a very successful long-term small business funding program called the Small Business Administration or SBA. The federally funded Small Business Administration's primary purpose is to provide education and training and a variety of low-cost affordable loans. These loans can be used to cover a number of various initial costs such as purchasing business supplies and machinery or expanding current operations. The Small Business Administration often targets under-served members of the community such as minority owned businesses or individuals which have federally recognized disabilities.

State and local governments also tend to provide small business loans to spur local business growth through Small Business Development Centers. These centers often provide similar functions to the SBA and can help with business planning and counseling for local small businesses. Small Business Development Centers can also provide additional funding in addition to SBA loans and can walk you through the process of how to apply for a small business loan.

For small businesses that have been in existence for at least three years it might be beneficial to talk to your current bank or credit union to see if they have any small business financing available. This might be easier than going through the SBA or local development center because your current financial institution will have a pre-existing relationship with you and may be more likely to provide funding for your company. Local banks often facilitate the distribution of federal and state loan programs as a more efficient means of distributing funds so if you have a pre-existing relationship with your local banker check with them first as the turnaround may be significantly reduced when seeking a small business loan.

Fortunately, the Internet has become an invaluable resource when researching funding opportunities in financing for small businesses. Many of the organizations mentioned such as the SBA or your local bank will often have a website which can get the process started when seeking additional funding or training for entrepreneurial endeavors. While it's always better to speak with someone in person, going online first can help answer any initial questions and can be a great starting point when seeking government issued small business loans.