Financing For Small Businesses – It’s Out There!

Posted by on July 30, 2009 in Business Financing [ 1 Comment ]

Good news for small business owners: The American Recovery and Reinvestment Act of 2009 was signed into law by President Obama in February 2009, which is the first step in mending an ailing economy. The benefits of the bill will provide $730 million to the SBA to reach out to small businesses in need of funding in order to stay afloat or begin operations. The bill’s funding includes a number of lending and investment programs that will enable small business owners to flourish in an economy that lost 2.6 million jobs in 2008. The programs provided by the bill entail:

  • $375 million for temporarily eliminating fees on SBA-backed loans and raising SBA’s guarantee percentage on some loans to 90%
  • $255 million for a new loan program to help small businesses meet existing debt payments
  • $30 million for expanding SBA’s Microloan Program, which is enough to finance up to $50 million in new lending and $24 million in technical assistance grants to micro-lenders
  • $20 million for technology systems to streamline SBA’s lending and oversight processes
  • $15 million for expanding SBA’s Surety Bond Guarantee Program
  • $25 million for staffing in order to meet demands for new programs
  • $10 million for the Office of Inspector General

The Small Business Administration (SBA) (www.sba.gov) offers a variety of assistance through its website to provide business owners with the help they need in order to succeed in their journey. Among the top lending programs include debt financing (loans), equity financing, and surety bonds. Although the SBA does not provide grant money, which typically is given to non-profit entities, it does provide a multitude of helpful resources to obtain or apply for a grant. A grant may be something to consider in the future, but for any business that is in the process of commencing operations first needs financing in order to move forward. Loan programs such as “equity financing” and “surety bonds” may sound like a foreign language, but can be easily understood by visiting the SBA website or reaching out to a well-versed business mentor or coach.

SBA loan applications must obtain the following documentation for a loan request evaluation: a business profile, loan request, collateral, business financial statements, and personal financial statements. No need to panic – there are plenty of helpful avenues for assistance. Visit www.sba.gov, www.score.org, and www.recovery.gov to learn more and to begin the process of procuring capital for your business.


One thought on “Financing For Small Businesses – It’s Out There!


  1. avatarNikita Irmal - Small Business Advocate

    That’s good news for all small businesses that no longer qualify for conventional loans under banks’ stricter lending standards, but it also means that the small businesses community further down the chain, which would normally receive SBA loans, are being bumped from the market in favor of more-stable borrowers. This is making it more difficult for small business owners to spend on key small business activities such as customer acquisition, business lead generation programs, internet marketing, hiring etc.

    If a bank has capital constraints, it can’t grow the balance sheet very much, and putting on a new loan grows your balance sheet, it’s a challenging time for any business to get credit. Some commercial banks and commercial lending companies including Bank of America, Capital One, CIT, Heritage Bank and Pacific Continental Bank have stopped lending altogether in order to shore up their balance sheets.

    Those numbers represent a gloomy outlook for small business and lending into small business. If the confidence in the economy goes up, we should see a return to higher lending levels, and that’s particularly true in small business.


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