Although it is perfectly possible to start a home based business with very little money as you (hopefully) begin to expand your company an injection of cash may be the extra boost you need to take it to the next level.
Obtaining financing for a home business is never the easiest thing in the world. Many banks will indeed turn your application down, but there are programs now offered by the SBA (Small Business Association) that make it far easier for a home business owner to obtain the financing that they need.
The SBA offers three different loan programs for small business loans, but only two of them are really within the reach of the average home business owner. Which one suits you depends very much upon the size and nature of your company but there are consultants that will help you decide which product is better suited to your business needs before you begin an application.
SBA Loan Products at a glance:
The Microloan 7(m) Loan Program – This is the most popular loan that home business owners seek, and is best suited for most of their needs. The SBA rules allow you to use the money in many different ways, for instance you can purchase supplies and furnishings for your business, or use the cash as working capital. You may not however, use the proceeds from this kind of loan to pay off either personal or business debts or use it purchase real estate for business purposes. Borrowers can request a Microloan of up to $35,000.
The Basic 7(a) Loan Guaranty – This loan is the perfect option for a home based business that needs more flexible loan options but have been having difficulty obtaining financing through traditional financial outlets. Unlike the Microloan it can be used to pay off business debts.
In addition to offering these loans, the SBA also provides free consulting for home and small business owners and also information about obtaining grants (which need not be paid back) that may also be available to help you grow your home business concern.
