Request for Question Clarification by
pafalafa-ga
on
06 Jan 2004 09:01 PST
The US Small Business Administration has an extense discussion of how
to finance a small business, that includes, in part:
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There are many sources for debt financing: banks, savings and loans,
commercial finance companies, and the U.S. Small Business
Administration (SBA) are the most common. State and local governments
have developed many programs in recent years to encourage the growth
of small businesses in recognition of their positive effects on the
economy. Family members, friends, and former associates are all
potential sources, especially when capital requirements are smaller.
Traditionally, banks have been the major source of small business
funding. Their principal role has been as a short-term lender offering
demand loans, seasonal lines of credit, and single-purpose loans for
machinery and equipment. Banks generally have been reluctant to offer
long-term loans to small firms. The SBA guaranteed lending program
encourages banks and non-bank lenders to make long-term loans to small
firms by reducing their risk and leveraging the funds they have
available. The SBA's programs have been an integral part of the
success stories of thousands of firms nationally.
In addition to equity considerations, lenders commonly require the
borrower's personal guarantees in case of default. This ensures that
the borrower has a sufficient personal interest at stake to give
paramount attention to the business. For most borrowers this is a
burden, but also a necessity.
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Their site also contains a list of banks in each state that specialize
in lonas to small businesses, and a great deal of other useful
information, questions to ask yourself about the degree of risk, and
links to sites for more information.
Is this the type of resource you are looking for?
