The State of Small Business Loans

Many American’s hold an entrepreneurship dream in their hearts whether it be a restaurant that makes their favorite food, running a favorite franchise, or a book shop. In most cases these dreams require outside funding. A small business loan is a solution to funding shortages that can be acquired from sources that differ from the traditional bank lender. Many small business owners have limited resources of collateral and are considered a higher risk to lenders. This causes difficulties when trying to obtain a loan so many small businesses chose to apply for a small business loans.

Numerous federal, state, and local governments offer a variety of financing programs to aid small businesses as they start and grow. Small Business Administration (SBA a government organization) provides a loan search tool and even offers a variety of loan programs for very specific purposes. SBA does not lend the money directly but provides a guarantee to banks and lenders for the loans provided to small businesses. General small business loans are the most common and can be used to establish a new business, start up business loan, or to assist in the acquisition, operation or expansion of an existing business. Real estate and equipment loans provide financing for major fixed assets such as operational equipment, buildings or other real estate.

Sometimes business owners are unable to qualify for traditional small business loans due to low credit or bad credit. Fortunately there are many funding options for small businesses loans for those with bad credit. For example, cash flow financing is a form of financing in which the loan is backed by a company's expected cash flows. This differs from an asset-backed loan, where the collateral for the loan is based on the company's assets. The schedules or repayments for cash-flow loans are based on the company's projected future cash flows. Another option is Industry Investing Companies who are willing to invest money in smaller companies. In order to keep their specific market strong they offer small business with bad credit loans. Many suppliers are willing to offer small business loans for bad credit rather than to lose large account clients. Private investors are often looking for small businesses to help or expand especially if the business is local and important to a community. Another choice is a Credit Union which has set up programs that provide business loans for bad credit. There are even Non-profit organizations, called micro-lending institutions, which are designed to exclusively help businesses get small business loans with bad credit.

Women owned businesses now make up 30% of all the companies in the United States. Women are more able to gain financial backing for businesses than previously. The U.S. Small Business Administration or the SBA offers small business loan programs for women. A short application may provide a loan of up to $150,000 and to be eligible you need to be a woman, a veteran, or a minority. Business loans for women are also obtained from the same lenders as small business loans yet often women have a higher chance of qualifying.