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Tuesday, Oct 29th

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USDA Business programs

USDAUSDA is United States Department of Agriculture which provides loans for various needs especially business and Industry guarantee loans. This loan is provided to develop, improve or finance business and industries to lower the unemployment rate. This is done by providing quality loans in rural areas to improve economic conditions of certain communities. The funds may be used for working capital, machinery, debt refinancing and real estate.

For receiving these funds the borrower must be engaged in business that will create employment opportunities, improve the economic environment, especially in rural areas, promote conservation and other such environmental friendly techniques, reduce dependence on non-renewable energy resources and promoting renewable energy resources. The business should pay at least $9.07 per hour. In case of individual borrower, one must be US citizen and in case of corporations, at least 51% must be owned by US citizen.


SBA Loans for Small business

SBA Loan

The Small Business Administration (SBA), United States was established on 30 July, 1953 when the Small Business Act was passed by Congress. The main aim of the SBA is to provide funds to small businesses to ensure their survival as well as their growth. The SBA helps businesses by not only providing the funds themselves but it also guarantees the loans provided by other banks and lending institutions to small businesses.

There are different programs which SBA provides. One of them is 7(a) Loan program which is designed to aid start-up and existing small business. This consists of types such as –

Express programs- SBA’s express programs offer quick streamlined loan procedures for some group of borrowers and gives an accelerated turnaround time. The response time in this case is just 36 hours after filing an application.


Enterprise Finance Guarantee

Enterprise Finance

The Enterprise Finance Guarantee (EFG) is the most successful and dynamic scheme for small businesses anywhere in the world. This is a joint venture between the participating lenders and the Department for Business, Enterprise and Regulatory Reform. This program fosters and helps in catalyzing the growth of small and medium scale businesses. Without the availability of adequate capital, the expansion of small businesses is retarded and as they don’t have any assets as collateral they can’t avail conventional loans. This is where the EFG comes in the scenario.

There are 26 members who provide this program, some of the leading one’s are- Barclays Bank plc, Bank of Scotland plc, Bank of Ireland, Clydesdale Bank plc, HSBC Bank plc, One London ltd., The Royal Bank of Scotland, The Co-Operative Bank plc, Yorkshire Bank plc and there are many more.


Export Assistance Loans

Export LoanThe most difficult thing about starting a small business is to find enough money to get it on the track. What makes this even more difficult is to obtain finance for export assistance. Exporting provides bright opportunities and challenges for businesses. If provided with a good finance it will set an outright path for growth prospects.

However getting loans in the export sector can be very tough. This is because banks do not accept collateral in the form of foreign based assets. Since small businesses are relatively unknown they fall prey to suspicion of the bank as would any of the foreign business entity which is not well known. Hence, here is a danger of company being fake and the banks don’t want their funds to be wasted.