How to Qualify for a Small Business Grant or Loan
The first hurdle that a new small business owner will have to overcome is the need for startup capital. For those who do not already have money and do not have investors lined up to partake in their new enterprise, it will be necessary to secure a loan or some other type of funding.
- Research the federal government’s
loan programs. They include the 7(a) Loan Program, the Microloan
program and the CDC/504 Loan Program. The 7(a) Loan program provides
help for businesses who have seen their income adversely affected by
the North American Free Trade Agreement (NAFTA). To qualify, your
business has to have suffered as a result of the agreement. - Be an exporter. Under the 7(a) program’s heading there is assistance for exporters so that they
can expand their businesses. Most American exporters employ fewer
than 20 people. These loans can help them to grow their businesses. - Operate your business in the
country. The 7(a) program also provides loans to businesses that are
located in rural areas. These loans may also be used to start a new
business from scratch. - Apply for a microloan. The
Microloan Program makes small, short-term loans to certain types of
businesses for working capital and the purchase of essential
supplies. It makes the money available to small businesses via
intermediate lenders. The loans average out at about $13,000, with
the highest amount being $50,000. - Apply for a CDC/504 loan. For
long-term financing CDC/504 loans provide money at a fixed rate of
interest to small businesses so that they can make large purchases.
The aim of this program is to encourage economic development on the
community level. - Contact your state government for
information on their small business loan and grant programs. In
addition to the loans available from federal sources, state
governments also provide grants to help small businesses via state
development agencies.