Monthly Archives: February 2015

Applying for Federal Small Business Loans

lookign for business loanNo matter how experienced you are in business, managing a small business isn’t easy. Aside from the issues that small business owners face concerning operations and recruitment, the biggest challenge is obtaining capital. In fact, most small business owners rarely have sufficient cash to fund their businesses so they turn to small business grants or loans to help their businesses thrive in the market.

Raising funds for business use may take awhile, particularly in a setting where small business owners are dealing with positions similar to borrowers that have bad credit. Being self-employed is regarded as a bad credit case due to the unfixed income generated through small business. In fact, small business owners will pay fixed loan installments if they have not generated enough revenue on a certain month. Banks and other lending institutions are often not open to meet the demands of small business owners.

Fortunately, there are business funds available from federal agencies. Federal funding may include, but not limited to, small business grants for women, veterans, people with disabilities, and minority-owned businesses.

If you’re looking for loans, you can take advantage of government-guaranteed loans. However, similar to bank loans, they can be difficult to obtain. The process can also be painstakingly time-consuming. It’s not unusual for prospective borrowers to bail out before their loans are approved.

If you want to apply for federal-guaranteed loans, you can find low interest rates and reasonable repayment terms. You can check out the U.S. Small Business Administration (SBA) that offer these kinds of loans.

The following SBA loans available for small businesses are:

General Small Business Loans (7(a) Loan)

SBA offers loans to businesses so eligibility requirements are based on certain business factors and its principals. Once you have scored a 7(a) loan, its proceeds, may be utilized to institute new businesses or assist in the operation, acquisition or expansion of an existing small business. SBA loans have specific terms that are negotiated between an SBA-approved lender and the borrower. There are also two 7(a) loan process options and special purpose loans.

Microloan Program

SBA’s Microloan Program awards short-term loans to entrepreneurs to assist them with their small business concerns and to specific types of nonprofit childcare centers. Under this program, loan provisions may amount up to $50,000 to help small businesses and nonprofit childcare centers start, develop and expand. The typical microloan averages about $13,000.

SBA offers funds to designated intermediary lending agents or institutions, which are nonprofit organizations with lending, management and technical experience. These intermediaries manage the Microloan program for borrowers who are qualified for loans.

Disaster Loans

SBA grants low-interest disaster loans to small, mid-size and large businesses, where business owners can replace or repair equipment, inventory, assets, and other personal property damaged in a declared disaster area.

Disaster loans include:

  • Home and Personal Property Loans: If you are a victim of natural disaster and reside in a declared disaster area, you may qualify for financial aid from SBA, even if you are not a business owner. You can be a homeowner or renter.
  • Business Physical Disaster Loans: If your business is situated in a declared disaster area and gained the damage during the disaster, you may apply for business physical disaster loans to help restore, repair or replace your property that’s been destroyed.
  • Economic Injury Disaster Loans: If you have suffered economic injury despite of physical damage in a declared disaster area, you may be eligible for an Economic Injury Disaster Loan (EIDL).
  • Military Reservists Economic Injury Loans: If your business employs a military reservist called to active duty, SBA offers loans to help qualified small business owners with their operational expenses.

A Woman Entrepreneur’s Guide to Securing Business Grants

woman-business-owner

Starting, growing and expanding a business pose many challenges. For most women entrepreneurs, it’s crucial to watch out for potential funding opportunities. However, business grants for women are readily available from various private organizations and federal agencies including the U.S. Small Business Administration (SBA’s) Office of Women ‘s Business Ownership, the U.S. Department of Housing and Urban Development (HUD’s) Small and Disadvantaged Business Utilization, and National Women’s Business Council.These organizations and agencies all work to boost small business ownership, particularly the development of women- and minority-owned businesses.

Applying for women’s business grants

The grant application process can be intimidating because of specific requirements needing clear and concise written grant proposals. If you’re seeking urgent funding, learning how to draft a detailed grant application will enable you to successfully secure the financial assistance that your business needs.

The first thing you need to do is research. Identify what your business requires and see if they fit the current grant opportunities you have researched. If you’re unsure where to seek these grant opportunities, you can look into Grants.gov for federal grants or SRAInternational.com for private grants.

When you have determined the right business grants for you, consider the eligibility criteria carefully and address whether your personal and business profile adhere to the grant solicitation’s requirements. Produce a contact list for all of your researched grant opportunities. Note down the contact details for each organization. If you consider yourself as a minority woman, you can just as qualify for business grants that’s also geared for minority business owners.

Once you have scaled down the grant possibilities that apply to your business condition, you still need to research the grantmakers. Being in the know about a specific grantmaking body can enable you to tailor your grant proposal to meet the requirements or goals of the grantmaker.

Some grants seek to empower female business ownership and economic development, while others aim to help advance organizations or companies that offer social benefits to women in communities.

If possible, reach out to each grantmaking organization personally. This way, you can access the best information and review specific goals and current opportunities of an organization.  When discussing your proposals, you must also inquire about grant proposal preferences and formatting. Make sure to jot down the contact details of anyone from an organization who gives you pertinent grant information or assistance.

Writing a grant application

When you have completed your research, the time is ripe to create a grant application. Grant applications start off with your business profile consisting of your business goals and objectives. Present a clear and accurate assessment of your business needs by writing an introductory cover letter or a summary. Also outline your business model that incorporates your products, services and budget.

Describe how the grants will impact the development of your business and how you will use the funds to project financial targets. Plus, add professional biographies of you, your business, and your management team (if you have one).

Finally, it’s best to observe all deadlines and submission requirements when filing a grant application.  There are often new grant opportunities available so be aware of these financial resources geared for women-owned businesses. Once you have learned the process of applying, you can efficiently draft comprehensive grant proposals and get your request approved successfully.