The United States Small Business Administration plays a vital role in offering funds to start up businesses for multiple purposes. Starting from developing business to buying commercial properties, these funds are used for wide ranging reasons. The goal of the organization is to offer the business funds to the startup companies and bring a tremendous change in the economic scenario of the United States. Although the Small Business Administration does not provide money directly, they act as the guarantor for diverse banks and private lending firms who provide money on the basis of appropriate guidelines. This type of fund determines the terms to allow these lenders or banks to provide cash to different businesses.
Unlike the conventional lending organization, the Small Business Administration does not check the fast business records of the borrowers before lending the money. It signifies that a business with poor credit record can acquire this type of fund without any difficulty.
The popular financial organizations of the United States show their unwillingness to provide money to the people who do not own assets that are often used as collateral. For these people, SBA plays the role of guarantor. In fact, the guarantee provided by the organization offers the financial organizations the assurance that the money would be repaid quickly. Here are a few important SBA loans that are available for the borrowers in the US.
- SBA 504 fund program offers long term as well as fixed rate money for permanent assets such as buildings or other real estate properties. This type of fund includes money for property purchase, office renovation and other related activities. The loan amount varies between fifty thousand and five million dollars. Both fixed as well as variable rates are available for the customers. The terms are available up to twenty five years.
- The next important type of loan is SBA 7 (a). The objective of this fund is to provide a relevant amount of capital to a small business or helps it operate in a successful way. This type of loan covers up different expenses associated with business such as business debt repayment, the purchase of new devices or deliver of long term capital. The essential features of this type of fund include the total loan amount of nearly ten million dollars, availability of fixed as well as variable rates. Plus, the total financial terms are offered up to twenty five years.
- Express loan offered by SBA allows the small business to get up to thirty five thousand dollars as capital through different terms. It can be used for different business purposes such as debt repayment, business fund acquisition, inventory improvement and so on. The common features of this type of fund include quick application procedure, the total amount of more than three million dollars, flexible term conditions and fixed as well as variable interest rates.