If you want to start your business or if you want to expand your current business, it is vital that you should have a lot of money on your hand. The Small Business Administration provides financial support to the small businesses who may face difficulty getting approval of conventional fund by all possible means. It is vital to remember that this organization does not provide it directly, but it gives the guarantee that it can pay it back to the lender on your behalf whenever you are unable to pay it back. This article will highlight on a few important loans that are offered by the Small Business Administration.
7 (a) loan
This type of fund is often used for purchase of multiple assets such as building, equipment, furniture, machinery and so on. Its amount can be as high as five million dollars and this kind of fund is matured within the time span of twenty five years. This kind of fund is often used by those who wish to start their own companies. Those who want to obtain money for its overall expansion should also get hold of this type of fund by all possible means.
It is vital to remember that micro-loan is often used to purchase inventory, furniture, fixture, equipment and so on. It is also used for capital investment, but it is vital to remember that it cannot be used to buy real estate property and it is also cannot be used to pay your current debt at any point of time. This organization offers it to non-profit organizations that have long years of experience in lending as well as in performing other technical activities. The repayment terms differ on the basis of a few essential factors such as the total amount of loan you have borrowed, the essential terms provided by the lenders and so on. The maximum term of repayment is usually six years.
It is used by those who wish to purchase major assets such as land, building and so on. It is structured in such a way where this organization offers nearly forty percent of the total cost of the project and they often pay ten percent of the remaining amount within the scheduled period of time. However, it is important to remember that it cannot be used for investment of capital or inventory. If the valuation of your business is less than fifteen million dollars, then you are eligible to get its approval by all possible means.
It is offered to those who are affected by earthquake, flood or any other kind of disaster. It is often used in order to repair the assets that have been damaged in a disaster at any point of time. The assets that are covered up by disaster loan include inventory, machinery, equipment, real estate property and so on. If you qualify for it, it is vital to remember that you may be able to get up to two million dollars in the best possible way.
If you apply for this kind of fund, it is vital that you need to fill up the application form and that you also need to submit certain essential documents by all possible means. Plus, you may need to provide the other essential information such as financial statement, documents related to tax returns, prolonged list of your essential debts, resumes of employees, license, lease and so on.