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How the Government Helps Small Businesses

Whether you’re thinking about opening a new business or you’re trying to strengthen or expand an enterprise you already have, the Small Business Administration (SBA) is there to help.

The SBA is a federal agency that helps small businesses grow and succeed. It provides business counseling and training, and offers a wide range of financing programs such as loans and grants.

Counseling and Training

You can get immediate help from the SBA by taking one of its online training courses on how to start, manage and finance a business. Each subject features a variety of courses about successful business management.

The SBA also works with community centers that provide free or low-cost training and mentoring. For example, SCORE is a nonprofit organization comprised of volunteer counselors with extensive experience in the business world. SCORE provides mentoring and counseling services to new business owners.

Finally, you can always visit local or regional SBA offices for support. These offices are located throughout the country and can counsel you on:

  • How to find your local women’s business centers
  • How to get technical assistance
  • How to get disaster assistance

Access to Capital

A lot of people think the SBA lends money. The truth is that it only guarantees loans made by financial institutions such as banks. SBA-backed loans can be very attractive because they generally have low interest rates and longer repayment terms.

The SBA offers several loan programs, including:

  • 7(a) Loan Program: This program is for businesses operating in specific industries such as exports or for businesses located in rural areas or underserved communities. Active duty military personnel and veterans can also benefit from these types of loans.
  • Micro-Loan Program: This program is for certain small businesses and nonprofit organizations, including childcare centers. The maximum loan amount is $50,000, which can be used to pay for inventory or purchase equipment. However, money from these loans cannot be used to pay debt or to purchase real estate.
  • CDC/504 Loan Program: This is a program for businesses looking for long-term financing. The money can be used to purchase real estate, new facilities and machinery or equipment. The program has several stipulations, including one that requires the funds to be used to encourage economic development in a community.

You can get more information about some of these programs as well as additional local resources by going to SBA Direct.

Other Types of Financing

Besides guaranteeing loans, the SBA can also help entrepreneurs locate other types of financing, such as grants. It’s important to note that the SBA does not provide grants for starting or expanding a business. The agency does provide grants to nonprofits and educational organizations for counseling and training purposes.

Local and state governments do provide grants to small businesses, specifically those involved in childcare, energy efficiency and local tourism. You can learn more about the different types of government grants available by visiting Grants.gov.

Business.USA.gov also provides information about how small business owners can access financing.

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