Government Business Loans and Financial Resources - Deborah L. Kluge, Independent Consultant, Proposal Writing and Government Contracting

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The Most Common Government Small Business Loans

Other SBA Loan Programs

State and Local Government Economic Development Programs

More Loan and Financial Resources

Government Programs for Rural Businesses

Government Housing Loans

Farm Loans From the Government

Loan Repayment/Forgiveness and Scholarship Programs

Government Benefits and Financial Assistance

Non-Profit Organizations That Can Help You Get Out of Debt

COMMON TYPES OF GOVERNMENT LOANS FOR SMALL BUSINESS
FROM THE U.S. SMALL BUSINESS ADMINISTRATION (SBA)

Loan Type	Summary Description	Eligibility	Additional Information(Links Will Open in a New Window)
7(A) Loan Guaranty Program	This program helps qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. Financing under this program can be guaranteed for a variety of general business purposes. Loans can be used for most business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.	Businesses must: meet SBA size standards, be for-profit, not already have the internal resources (business or personal) to provide the financing, and be able to demonstrate repayment. Certain variations of SBA’s 7(a) loan program may also require additional eligibility criteria. Eligibility factors for all 7(a) loans include: size, type of business, use of proceeds, and the availability of funds from other sources.	Click Here for more details. To apply for this loan: - See your local bank(s)
Loan Type	Summary Description	Eligibility	Additional Information(Links Will Open in a New Window)
Microloan Program	Under this program, SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $10,500. Applications are submitted to the local lender and all credit decisions are made on the local level. The maximum term allowed for a microloan is six years. Each lender has its own lending and credit requirements. However, business owners contemplating application for a microloan should be aware that lenders will generally require some type of collateral, and the personal guarantee of the business owner.	Start-up, newly established, or growing small businesses.	Click Here for more details.
Loan Type	Summary Description	Eligibility	Additional Information(Links Will Open in a New Window)
Prequalification Program	The Prequalification Loan program uses intermediary organizations to assist prospective borrowers in developing viable loan application packages and securing loans. The job of the intermediary is to work with the applicant to make sure the business plan is complete and that the application is both eligible and has credit merit. To find out whether there is a pre-qualification intermediary operating in your area, contact your local SBA office. Note: Small Business Development Centers serving as intermediaries do not charge a fee for loan packaging. For-profit organizations will charge a fee. The maximum loan amount for this pilot program is $250,000. Interest Rates, Maturities, Collateral policy, and Guaranty percentages all follow the standard 7(a) loan program (see above).	Low income borrowers, disabled business owners, new and emerging businesses, veterans, exporters, rural and specialized industries.	Click Here for more details. To apply for this loan: - Contact Your Local Small Business Development Center for free assistance.
Loan Type	Summary Description	Eligibility	Additional Information(Links Will Open in a New Window)
CDC 504 Program	This program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped.	Businesses must be for profit and fall within the size standards set by the SBA. Under the 504 Program, the business qualifies as small if it does not have a tangible net worth in excess of $7 million and does not have an average net income in excess of $2.5 million after taxes for the preceding two years. Loans cannot be made to businesses engaged in speculation or investment in rental real estate.	Click Here for more details.
Loan Type	Summary Description	Eligibility	Additional Information(Links Will Open in a New Window)
CAPlines Program	An umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan, Except the Small Asset-Based Line, can be for any dollar amount that does not exceed SBA's limit. There are five programs for small businesses: SEASONAL LINE: advances against anticipated inventory and accounts receivable help during peak seasons when businesses experience seasonal sales fluctuations. CONTRACT LINE: Finances the direct labor and material cost associated with performing assignable contract(s). BUILDERS LINE: Finances direct labor-and material costs. STANDARD ASSET-BASED LINE: An asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. SMALL ASSET-BASED LINE: An asset-based revolving line of credit of up to $200,000.	The vast majority of businesses are eligible. However, applicant businesses must operate for profit; be engaged in, or propose to do business in, the United States or its possessions; have reasonable owner equity to invest; and, use alternative financial resources first including personal assets.	Click Here for more details. To apply for this loan: - See your local bank (s)

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OTHER SBA LOAN PROGRAMS

Export Express Loans

Helps small businesses that have exporting potential, but need funds to buy or produce goods, and/or to provide services for export.

Export Working Capital Loans

Provides short-term working capital to exporters.

Community Adjustment and Investment Program (CAIP)

Help communities that have suffered job losses due to changing trade patterns with Mexico and Canada following the North American Free Trade Agreement.

International Trade Loans

For businesses preparing to engage in, or already engaged in international trade, or for businesses that have been adversely affected by competition from imports

Pollution Control Loans

Provides loan guarantees for the financing of the planning, design, or installation of a pollution control facility.

Defense Loan and Technical Assistance (DELTA)

Provides financial and technical assistance to defense-dependent small businesses adversely affected by defense reductions

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STATE AND LOCAL GOVERNMENT ECONOMIC DEVELOPMENT PROGRAMS

Financing From Local Economic Development Agencies

Many people are unaware of business financing programs at the state and local levels. This article from Bankrate explains how they work and how to find them.

State Economic Development Resources

A state-by-state listing of resources related to economic development and growing a small or home-based business.

State Economic Development Agencies
State and Local Government Agencies
State and Local Public Funding

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MORE LOAN AND FINANCIAL RESOURCES

Common types of Small Business Loans. These include working capital lines of credit, credit cards, equipment leasing, and letters of credit.

Information on Loans and Credit, including installment loans, tax refund loans, and home equity loans.

Information on business loans for Women, Minorities and Disabled Entrepreneurs. Get the names of programs and lenders that offer financial services to these groups.

Learn about Payday Loans. These are small, short-term, high-rate loans. They also go by other names, including cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.

Information on Debt Consolidation.

Student Financial Aid, including grants, loans, and work-study assistance.

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GOVERNMENT PROGRAMS FOR RURAL BUSINESSES

Business Programs

Business programs include: Business and Industry Guaranteed Loans; Intermediary Relending Program; Rural Business Enterprise Grants; Rural Business Opportunity Grants; Rural Economic Development Loans; and Rural Economic Development Grants. Click Here for information on programs available in your state and to obtain applications for financial assistance.

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GOVERNMENT HOUSING LOANS

HUD/FHA Federal Mortgage Programs

The U.S. Department of Housing and Urban Development (HUD) provides mortgage insurance through the Federal Housing Administration (FHA) to help you become a homeowner. FHA doesn't actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan. HUD also sells homes that are claimed as a result of failed FHA loans. HUD homes are sold "as is," but they can be very good deals.

Other HUD Loans and Business Opportunities

HUD insures loans for multifamily housing, healthcare facilities, and single family homes.

HUD Special Home Buying Programs

HUD has three special home buying programs: The Officer Next Door for police officers, the Teacher Next Door for teachers, and a program to help public housing residents buy homes.

HUD Local Home Buying Programs

Many local governments use HUD funds (both Community Development Block Grants and HOME program funds) to support local homebuying programs. This page tells you how to find these funds.

HUD Home Improvement and Repair Loans

HUD's various home improvement and repair loans, as well as tips and contact information, can be found on this page.

Veterans Administration (VA) Home Loans

Home loans to eligible veterans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans.

Rural Housing Service (RHS) Home Loans

The RHS provides a number of homeownership opportunities to rural Americans, as well as programs for home renovation and repair. RHS also makes financing available to elderly, disabled, or low-income rural residents of multi-unit housing buildings to ensure they are able to make rent payments.

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FARM LOANS FROM THE GOVERNMENT

Farm Service Agency (FSA)

This agency within the U.S. Department of Agriculture offers direct and guaranteed farm ownership and operating loans to farmers who are temporarily unable to obtain private, commercial credit. Borrowers are often beginning farmers who can't qualify for conventional loans because they have insufficient financial resources. The Agency also helps established farmers who have suffered financial setbacks from natural disasters, or whose resources are too limited to maintain profitable farming operations.

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LOAN REPAYMENT/FORGIVENESS AND SCHOLARSHIP PROGRAMS

Group on Student Affairs

A compilation of U.S. programs that offer financial assistance, in the form of loan repayments, for a commitment to service (generally in an area of need). The information is provided by state health departments and other agencies, medical and health professions schools, federal programs, and military agencies.

Student Loan Forgivenesss

Loan forgiveness programs through volunteer work, military service, teaching, legal and medical work, and other activities.

You can find more sites by doing a search on "Loan Repayment and Forgiveness."

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GOVERNMENT BENEFITS AND FINANCIAL ASSISTANCE

GovBenefits

A free online screening tool that helps you identify government benefits that you may be eligible to receive along with information about how you can apply.

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NON-PROFIT ORGANIZATIONS TO HELP WITH DEBT

National Foundation for Credit Counseling

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Here's Where You Can Learn About Finding and Getting Free Money.

Click Here for Additional Information for Small, Minority, Women-Owned, and Other Disadvantaged Businesses.

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THIS SITE WAS LAST UPDATED IN MARCH 2008

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