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Special Assistance Programs
-- Part VIII
If you are having trouble obtaining a loan, there are a number of special assistance options available to help you. Grants, government-sponsored programs, and business information centers are three good places to turn should you find yourself in this position.
The Department of Defense currently has two specific grants available to small businesses that meet definite criteria. These include:
- The Small Business Innovation Research Program (SBIR), which provides up to $850,000 in early-stage R&D funding directly to small technology companies
- The Small Business Technology Transfer Program (STTR), which provides up to $600,000 in early-stage R&D funding directly to small companies working cooperatively with researchers at universities and other research institutions
The U.S. Government is a source of small-business capital, mainly through the Small Business Administration (SBA). Information on all SBA programs can be found either by calling 1-800-UASK-SBA, or by logging on to www.sba.gov
SBA provides financial assistance through its participating lenders in the form of loan guaranties, not direct loans. Banks apply to the SBA to guaranty a loan they are proposing to give you. The SBA will guaranty up to seventy-five percent of your loan's value if the loan is for $100,000, and eighty percent if the loan is for less than $100,000. Therefore, the bank must be satisfied that you will repay the loan.
SBA defines a small business as:
- Independently owned and operated
- Does not dominate its field
- Meets specific employment and sales standards
The following are examples of government loan programs:
- Microloan Program - Provides loan guarantees for small loans ranging in amount, from $100 up to $25,000, through community-based lenders. Average loan size is $10,000
- Cap-Lines - Provides loan guarantees for small businesses that require funds to support short-term working capital needs
- LowDoc - Provides loan guarantees for loans under $100,000. Requires minimal paperwork and is a relatively quick source of funds
- The 7(a) Loan Guaranty Program - Provides loan guarantees through private-sector lenders
Small-business administration women and minority programs
In addition to the loan guarantees we talked about earlier, the SBA offers a number of programs that provide advice and assistance to women and minorities starting small businesses. Some of these programs include:
- 8(a) Business Development Program and Small Disadvantaged Business -- This program helps build community-based small businesses by utilizing tools ranging from contract support to low-interest loans for site acquisition, construction, and new or upgraded equipment purchasing.
- SBA's Women's Business Centers
There are more than eighty Womenˇ¦s Business Centers (WBC), providing a wide range of services to women entrepreneurs at all levels of business development, from start-up to up and running.
- Pre-Qualification Assistance for Loans: Government programs sometimes use intermediaries to help prospective minority and women small-business owners develop viable business loan application packages and secure small-business loans. Two of the most popular choices are:
- The Women's Small Business Loan Pre-qualification Program
- The Minority Small Business Loan Pre-qualification Program
Hometown government assistance
You can also look to smaller government offices and agencies located in your hometown as a resource for finding and acquiring a small-business loan. These groups often know about special bank offers, groups of angel investors, and special women's and minority programs in your area. Here are a few places to start:
- Small and Minority Business Trade and Commerce Agencies Governor's Offices
- Chambers of commerce
- Mayor's office
Business Information Centers (BIC's)
Business Information Centers provide hardware, software, and counseling courtesy of an organization called SCORE (Service Corps of Retired Executives). It offers resources that meet entrepreneurs needs, such as writing business plans, evaluating marketing plans, sales, and pricing. For more information, visit its Web site at www.score.org.
Conclusion -- Success of women in small business
According to the SBA, women-owned businesses have grown steadily in each of the last ten years. They now employ thirty-five percent more people in the U.S. than companies in the Fortune 500 employ worldwide.
Now is the right time. You have the information you need to get started. Good luck.
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