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Becoming a Small Business Can Put Working Capital in Your Pocket
April 24, 2006
by Wendy Croix
wendy.croix@business-programs.com
Business Programs Columnist
So you've been an independent contractor for a while now--an entrepreneur or artist--and you've got the self-employment thing down cold. Maybe you've grown. Maybe it's time to upgrade yourself to a business and give yourself the title of small business administrator. Why? It pays. That's right. Money!
Small Business Administration Loans
While the U. S. Small Business Administration is primarily a guarantor of loans you'll get from private sources, having the government behind you makes your small business financial life a whole lot easier. Consider these possibilities:
$ The Basic 7(a) Loan Guaranty
For start-ups and existing small businesses. The 7(a) guarantees financing, helping small business administrators get working capital (loan matures at 10 years), accumulate or renovate land and buildings (loan matures at 25 years), or refinance debt through commercial lending institutions.
$ (CDC) 504 Loan Program
With the backing of the SBA, local certified development companies help private, nonprofit administrators with "brick and mortar" financing to expand, modernize, or purchase real estate. You'll need to come up with at least 10 percent of the equity to take advantage of this loan opportunity.
$ 7(m) Microloans
If you're a small business administrator in need of up the $35,000 for working capital, the SBA will guarantee a loan to an intermediary who, in turn, makes the microloan to you. Technical assistance for start-ups is also available.
Small Business Administration Grants
The U. S. Small Business Administration website is a treasure trove of information on small business administration grants, including fedgrants.gov, a site specifically for small businesses. Another site, Grants.gov, is your gateway to more than 900 grant programs administered by 26 federal agencies. Searching "small business administration grants" in July 2005 yields over 500 grants--so roll up your sleeves and Inc. yourself!
Resources
Grants.gov
U.S. Small Business Administration grants page
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