Feb 8, 2012

3 Important Loan Programs for Small-Business Owners

[caption id="attachment_393" align="alignright" width="424" caption="Loan Programs for Small-Business Owners"]

[/caption] Everyone in the market today knows small-business owners are in dire need of capital and loans to finance their historic activity and their growth. It is clear that the biggest drag on the U.S. economy and the small-business segment has been the U.S. and global de-levering process. Federal, state, and local governmental bodies are shrinking in size and scope. Banks and other financial institutions due to losses during the credit crunch are reducing their balance sheets and ability to provide finance to this sector. Despite a Federal Reserve zero-percent interest policy, equity and debt capital are hard to come by for small businesses. The Small Business Authority is an active participant in providing debt and financing to all U.S.-based businesses under certain guidelines and programs. As a small-business owner, you may have trouble securing conventional (bank) financing. Here at The Small Business Authority, we work with small-business owners to effectively identify, evaluate, and structure financial needs unique to small businesses. The loan programs listed below can help you develop, expand, or sustain your small business. 1. Flexible Term Lending Program: These loans can range in size from $50,000 to $5 million with terms of 7 to 25 years, based on the use of proceeds. These loans are structured without balloon payments with floating interest rates (up to 2.75 percent over prime). This lending program is good for many industries, including manufacturing, wholesaling, retailing, and construction. To be eligible for this type of loan, your business must be operated for profit, located in the United States, and owned by a U.S. citizen or resident alien. As the business owner, you have to demonstrate repayment ability from earnings, and your business cannot concern religion, politics, sex, or investing in real estate. 2. Fixed/Floating Rate Program: This type of loan program is structured so that there are no balloon payments, with interest rates fixed based on current market rates. The term of the loan is based on use of proceeds. To be eligible for this type of loan, your business must be operated for profit, located in the U.S., and owned by a U.S. citizen or resident alien. As the business owner, you have to demonstrate repayment ability from earnings and your business cannot concern religion, politics, sex, or investing in real estate. 3. Conventional Real Estate Loan Program: This type of loan program is a financing tool that can help you acquire commercial real estate. You can use the money from this loan to purchase, renovate, expand, or refinance commercial real estate. With this program, you may be able to secure a loan up to $5 million with terms up to 30 years. There are fixed/variable rates and multiple prepayment options. This article originally appeared on Forbes.com.