Many small businesses are looking for some funding right now, whether it’s relief from the virus situation or some other cause. If your business has been interrupted by COVID-19, there are several options being offered by the Small Business Administration. Look into those to see if and how you qualify. If you run a small company out of your own home and don’t require physical contact with others, or are thinking about starting a new business, then you can apply for government small business loans the traditional way.
Why apply for this kind of loan? Because it will help put your business out there. In order to generate a cash flow, you need to establish a reputation and start building a customer base. If you already have an established business, then you’ll still need funding to continue operating. Companies need funding for a variety of reasons: research, equipment, product development, advertisement, supplies, insurance, and so forth. Some companies go for government loans and others try to get a line of business credit.
Unfortunately, for-profit lenders don’t like giving out loans or funding to anyone who does not have a solid financial history and good credit report. Government loans can be easier to apply for and they are typically offered through organizations such as the SBA. Government small business loans are authorized with a government-backed guarantee, so lenders are more likely to approve.
Government Small Business Loans are Not for Individuals
These kinds of loans are intended for businesses and not individuals, so being self-employed or a contractor isn’t enough. For start-ups, there are microloan programs, 7(a) loan, and Community Advantage Loan. The 7(a) loan is the most popular one for small businesses, but not the easiest one to get for start-ups. It’s intended for business that need access to working capital and require funding for things like fixtures and furniture, as well as making leasehold improvements.
if you need help with the funding involved in physical buildings, such as fixing up an existing facility or beginning construction on a new property for commercial purposes, then a 504 loan is a good one to consider applying for.
Before applying for any government small business loans, you should create and review your business plan very carefully. Keep an eye on your credit scores as well. If you only have personal credit, do whatever you can to clear up any negative items and raise your score.
You might not even need an SBA loan at all. There are other options out there for business funding – not just government small business loans. One place to start is with US Business Fund. They offer everything from working capital loans to COVID-19 relief. The application process is extremely fast.