Opportunities Tips for The Average Joe

A Guide To The Small Business Administration (SBA)

Many people today have the desire to start their own business but are not able to because of funding problems, and one possible option that these starting small businesses can take is to consider the services offered by the Small Business Administration or the SBA in order to have a good business start. What can we know about the SBA? Small Business Administration is an organization established in the year 1953, responsible for providing assistance to small businesses in America in the areas of management, advocacy, procurement, and financial aid. The federal government is hands off with respect to the policies of this administration. It also provides services through its business loans programs, investment programs, disaster loan programs, and even bonding for contractors.

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.

What the SBA does is not to offer direct loans to the small businesses. The SBA will provide the small business guidelines in applying for a loan. The main thing that the SBA does is to vouch for your business that your loan will be repaid as you apply for a business loan from any financial institution offering them. The real transaction here is between the small businesses and a financial institution where you apply for a commercial loan which is custom made fit according to the requirements of the SBA accompanied by its approval seal. Small businesses can get disqualified for an SBA business loan if they have other sources of financing on reasonable terms and conditions. The policies of the SBA can change if there are changes in the fiscal policies of the government.

With a partially public and a partially private investment partnership, SBA can offer venture funding to small businesses. These funds which are privately owned are managed by the SBA and licensed and regulated by them. They have reasonable terms and conditions but SBA may choose to limit investment to legitimate small business only unlike other venture capital firms.

SBA offers a bonding program to help small venture contractors acquire surety bonds which are signed by the project owner, the contractor and the surety. If the contractor fails to complete the project, the surety take the responsibility.

Here we can see the advantages of having the SBA. Because of the financing programs offered by the SBA to small businesses, a lot of them have become successful over the years. So, if you are thinking of starting a small business venture, consider approaching the SBA to be able to successfully start one.

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