Did you know that the United States government can help you seek financial assistance for your growing businesses? Yes, the government does that, and it has been successfully doing so since 1953.
Perhaps if you're looking for a way to help your business grow, now would be a good time to understand how the government can assist you with your small business needs.
In order to get a thorough comprehension of the process, let me first tell you about the government's leading agency that is accountable for assisting the country's small businesses, the United States Small Business Administration.
The United States Small Business Administration, also referred to as SBA, is a United States government agency that was developed on the 30th day of July, 1953.
The Small Business Administration is largely in charge of rendering indirect financial aid to entrepreneurs and small business establishments. Generally, the primary role of the SBA is to provide several financial assistance programs to small businesses that have been specially designed to meet essential financing needs.
In order to do this, the SBA has constituted many loan programs and financial assistance strategies that have been thoroughly developed to suit the needs of entrepreneurs and small business enterprises.
Among all of these programs, the three-most fundamental forms of assistance that is provided by the SBA are that of Guaranteed Loan Programs, Bonding Programs, and lastly, Venture Capital Programs.
How can these programs specifically help you, you ask?
For starters, the Guaranteed Loan Program will work in a manner that the SBA will help you seek financial assistance, instead of directly providing you with one.
Since the SBA has formed partnerships with third-party lenders, community development organizations, and microlending institutions, these third-party partners will then be able to directly provide you with loans and other forms of financial assistance. This setup is essentially similar to procuring a commercial loan, but it is easier and more efficient because the SBA will serve as your guarantor, meaning it will assure the third-party partner that you have the ability of repaying the loan and that you will, without a doubt, repay it.
The Bonding Program, also called the SBA's Surety Bond Guarantee (SBG) Program, can help small business contractors obtain surety bonds by way of standard commercial channels. To appreciate this better, a small business owner should first know what a surety bond is.
A surety bond is an agreement between a surety (someone who agrees to assume responsibility for the debt of the primary borrower in cases wherein the borrower fails to assume his or her responsibilities), a small business contractor and a project owner.
Through the SBG program, the SBA will enter into a contract with a surety stipulating that the SBA will take responsibility for a percentage of loss in the event that the primary borrower fails to adhere to the terms of the loan agreement.
The Venture Capital Program, on the other hand, was created to work through the SBA's Small Business Investment Company (SBIC) Program wherein the SBA could indirectly provide venture capitals to small businesses and small business owners.
Small Business Investment Companies are privately-owned and managed investment funds that are licensed and regulated by the SBA. These companies could help small businesses by providing them with funds in the form of debt or equity, just like venture capital, private equity and private debt funds. However, they differ in a way that SBICs will only restrict their investments to eligible small business concerns that are defined by the SBA.
If you want to find out more about the programs and functions of the SBA, you can check out their website at http://www.sba.gov/.
Perhaps if you're looking for a way to help your business grow, now would be a good time to understand how the government can assist you with your small business needs.
In order to get a thorough comprehension of the process, let me first tell you about the government's leading agency that is accountable for assisting the country's small businesses, the United States Small Business Administration.
The United States Small Business Administration, also referred to as SBA, is a United States government agency that was developed on the 30th day of July, 1953.
The Small Business Administration is largely in charge of rendering indirect financial aid to entrepreneurs and small business establishments. Generally, the primary role of the SBA is to provide several financial assistance programs to small businesses that have been specially designed to meet essential financing needs.
In order to do this, the SBA has constituted many loan programs and financial assistance strategies that have been thoroughly developed to suit the needs of entrepreneurs and small business enterprises.
Among all of these programs, the three-most fundamental forms of assistance that is provided by the SBA are that of Guaranteed Loan Programs, Bonding Programs, and lastly, Venture Capital Programs.
How can these programs specifically help you, you ask?
For starters, the Guaranteed Loan Program will work in a manner that the SBA will help you seek financial assistance, instead of directly providing you with one.
Since the SBA has formed partnerships with third-party lenders, community development organizations, and microlending institutions, these third-party partners will then be able to directly provide you with loans and other forms of financial assistance. This setup is essentially similar to procuring a commercial loan, but it is easier and more efficient because the SBA will serve as your guarantor, meaning it will assure the third-party partner that you have the ability of repaying the loan and that you will, without a doubt, repay it.
The Bonding Program, also called the SBA's Surety Bond Guarantee (SBG) Program, can help small business contractors obtain surety bonds by way of standard commercial channels. To appreciate this better, a small business owner should first know what a surety bond is.
A surety bond is an agreement between a surety (someone who agrees to assume responsibility for the debt of the primary borrower in cases wherein the borrower fails to assume his or her responsibilities), a small business contractor and a project owner.
Through the SBG program, the SBA will enter into a contract with a surety stipulating that the SBA will take responsibility for a percentage of loss in the event that the primary borrower fails to adhere to the terms of the loan agreement.
The Venture Capital Program, on the other hand, was created to work through the SBA's Small Business Investment Company (SBIC) Program wherein the SBA could indirectly provide venture capitals to small businesses and small business owners.
Small Business Investment Companies are privately-owned and managed investment funds that are licensed and regulated by the SBA. These companies could help small businesses by providing them with funds in the form of debt or equity, just like venture capital, private equity and private debt funds. However, they differ in a way that SBICs will only restrict their investments to eligible small business concerns that are defined by the SBA.
If you want to find out more about the programs and functions of the SBA, you can check out their website at http://www.sba.gov/.
About the Author:
Iola Bonggay is an editor of TopGovernmentGrants. She maintains Websites providing resources on small business grants and artist grants.
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