This search tool is the first of its kind to provide access to federal and state programs in a single, easy-to-use tool.  This tool provides one website to find financing programs that business owners can apply for. So many business owners are looking for financial information – this tool is really easy to use.

The loans and grants tool is simple. A business owner completes a survey of 15 questions and is presented with a list of loans, grants and venture capital programs.  The questions are simple, including some the following – no complex information required to use this:

• A dropdown with industry selection
• Nonprofit vs. for profit businesses
• Veteran status
• Minority owned businesses
• Location

After answering these questions, a list is generated of available loans and grants, which is being expanded continuously. This list includes the program title, which links the user to the website describing the program; the sponsoring agency; and a brief description of the program. Results are segmented by the type of financial assistance (loan, grant, venture capital).

Another very cool tool from the government is a permits tool called “Permit Me”. You can enter your business type and location and this tool generates a list of licenses and permits that you need in your locality for your specific business. The most common types of businesses are included but if you have a unique requirement, definitely send these folks a note and they will work to add other businesses and new content.

The need for financing is a critical and perennial concern for the owners of small businesses. Many government resources, including guides, exist for small businesses. Many of these tools explain how to shop for and obtain credit, how to maintain a good credit rating, how to dispute unfair credit transactions, and how to resolve billing errors. The Federal Reserve provides a good guide.

There are also free government resources for obtaining loans. Here are some types of loans:

• Short-term loans are usually for less than one year. They can provide interim working capital for a business temporarily in need of cash and are repaid in a lump sum when inventory or accounts receivable are converted into cash.
• Intermediate-term loans are often used for a business start-up, the purchase of new equipment, expansion, or an increase in working capital. The maturity dates range from one to three years.
• Long-term loans generally are made for major capital improvements, acquiring fixed assets, or business start-ups. The term of the loan runs for periods of three to five years and is usually based in part on the life of the asset financed. Repayment is usually made in monthly or quarterly installments.
• A line of credit offers you the ability to borrow money repeatedly, up to your credit limit, without having to reapply. A line of credit is particularly important to businesses that experience seasonal fluctuations. The lender generally will perform a review once a year, at which time the borrower is asked to provide updated financial statements.

There’s a great new tool that allows you to search by state for loans available. This tool allows you to input your business type and provides direct links to view their requirements.

Tips for Applying for Credit

Applying for commercial credit can be tedious – a lot of documentation that you need to prepare for including how you will spend the money. The following are several items to include in a business proposal:

• Business description – An overview of your business, products, customers, etc.
• Personal profile – Your resume
• Business plan - Your strategy over the next few years and how you will generate revenue to pay the loan
• Personal finances - A list of your assets/liabilities and credit references

For more detailed information, go to the Federal Reserve Board.

The good news is, there is a loan program from the SBA – called SBA Express – that makes the process of procuring a government loan quick, attractive, and accessible to small business owners looking to start-up or expand quickly.

The SBA Express program offers small businesses the chance to get an SBA-backed loan of up to $350,000 to start-up or expand operations. The “express” piece refers to that fact that your loan can be turned around in 36 hours.

Here’s what you need to know about SBA Express:

• Facts and Figures – SBA Express is available to existing or start-up for-profit businesses. You can borrow up to $350,000 or up to $25,000 in an unsecured loan. The maximum loan term is seven years; interest rates vary but must not exceed SBA maximums.
• Using Your Loan – You can use the loan to expand your business, purchase an existing business or obtain working capital. You can also use the loan to refinance existing business debt that is not already structured with reasonable terms and conditions. These are just general guidelines; the SBA has more specific guidance here.
• Eligibility and Getting Started – To apply for an SBA loan, start by getting a list of SBA lenders in your area. You can do this by contacting your local SBA District Office.

Other Options for Small Businesses

If you don’t need the level of financing offered by SBA Express, you may want to consider SBA Microloans. With a microloan you can borrow up to $35,000. The average loan, however, is a lot lower and can sometimes be in the hundreds of dollars, making this loan ideal for home-based businesses looking to set-up or expand.

If you’re still having trouble pinpointing the right loan for your business, consider using the new SBA Business Gateway program’s grants and loans tool or explore other loan options offered by the U.S. government.

It’s All in the Planning

Like the old saying goes, “poor planning equals poor performance”, and it’s the same with loans. If you really want to succeed in securing the right loan for your business, you must have a rock solid business plan.

You can find lots of planning resources here to help you document your businesses missions and goals and, of course, explain how you are going to get there.

Everyone is looking for a grant or loan for their business. In future posts, I will discuss some government grants/loans tools that will be launched for assisting businesses in locating what is available and how to apply. However, given these times of reduced government spending and difficulty in securing loans from our banking system, private investment is certainly an option worth discussing and there are government resources available to help navigate the way.

Venture capital is a type of private equity capital typically provided to start-up, new, and growing companies – with the eventual anticipation of generation a return, public offering, or sale of the business. Typically, venture capitalists will fund a business for partial ownership or shares of the company they are investing in. These are usually institutional investors and wealthy individuals and the resources are combined through these investment firms. For the down and dirty basics of VC, check out wikipedia, the free encyclopedia. Below are several government resources that can assist:

Government Tools for Financing Assistance

1. Active Capital is the premier Website for entrepreneurs seeking private investment and private investors seeking deals in a secure and protected environment consistent with all investment laws. It is a simple, secure and low-cost way for investors and small companies to find each other – it’s an Internet-based listing service for securities offerings of small, growing companies located throughout the nation, that are viewed anonymously by accredited investors. Active Capital rises above similar sites because of its legal status, action orientation, cost structure, and degree of support for growing entrepreneurial companies.

1. The Small Business Investment Company (SBIC), part of the SBA, is designed to improve and stimulate the national economy and small businesses by stimulating and supplementing the flow of private equity capital and long term loan funds for the sound financing, growth, expansion and modernization of small business operations while insuring the maximum participation of private financing sources.

1. The New Markets Venture Capital (”NMVC”) Program is a developmental venture capital program designed to promote economic development and the creation of wealth and job opportunities in low-income geographic areas and among individuals living in such areas. Through public-private partnerships between the SBA and newly formed NMVC Companies and existing Specialized Small Business Investment Companies, the program will meet the unmet equity needs of local entrepreneurs through developmental venture capital investments, provide technical assistance to small businesses, create quality employment opportunities for low income area residents, and build wealth within low income areas.

1. Business.gov can also assist small businesses in finding funding resources. They have several pages dedicated to funding for specific business types, partnerships, import/export, as well as information on venture capital financing.