There are some news articles that boldly claim the SBA will now provide relief if you have an existing business loan and are having trouble making the payments. This is not a true statement and needs to be clarified. As seen in more detail in this article, this is wrong because it applies to troubled loans made in the future, not existing ones.

Here is how it works. Assume you were one of the lucky few that find a bank to make a SBA loan. You proceed on your merry way but run into tough economic times and find it hard to repay. Remember these are not conventional loans but loans from an SBA licensed lender that are guaranteed for default by the U.S. government through the SBA (depending upon the loan, between 50% and 90%). Under the new stimulus bill, the SBA might come to your rescue. You will be able to get a new loan which will pay-off the existing balance on extremely favorable terms, buying more time to revitalize your business and get back in the saddle. Sound too good to be true? Well, you be the judge. Here are some of the features:

1. Does not apply to SBA loans taken out before the stimulus bill. As to non-SBA loans, they can be before or after the bill's enactment.

2. Does it apply to SBA guaranteed loans or non-SBA conventional loans as well? We don't know for sure. This statute simply says it applies to a "small business concern that meets the eligibility standards and section 7(a) of the Small Business Act" (Section 506 (c) of the new Act). That contains pages and pages of requirements which could apply to both types of loans. Based on some of the preliminary reports from the SBA, it appears it applies to both SBA and non-SBA loans.

3. These monies are subject to availability in the funding of Congress. Some think the way we are going with our Federal bailout, we are going be out of money before the economy we are trying to save.

4. You don't get these monies unless you are a viable business. Boy, you can drive a truck through that phrase. Our friends at the SBA will determine if you are "viable" (imagine how inferior you will be when you have to tell your friends your business was determined by the Federal government to be "non-viable" and on life support).

5. You have to be suffering "immediate financial hardship". So much for holding out making payments because you'd rather use the money for other expansion needs. How many months you have to be delinquent, or how close your foot is to the banana peel of complete business failure, is anyone's guess.

6. It is not certain, and commentators disagree, as to whether the Federal government through the SBA will make the loan from taxpayers' dollars or by private SBA licensed banks. In my opinion it is the latter. It carries a 100% SBA guarantee and I would make no sense if the government itself was making the loan.

7. The loan cannot exceed $35,000. Presumably the new loan will be "taking out" or refinancing the entire balance on the old one. So if you had a $100,000 loan that you have been paying on time for several years but now have a balance of $35,000 and are in trouble, boy do we have a program for you. Or you might have a smaller $15,000 loan and after a short time need help. The law does not say you have to wait any particular period of time so I guess you could be in default after the first couple of months.

8. You can use it to make up no more than six months of monthly delinquencies.

9. The loan will be for a maximum term of five years.

10. The borrower will pay absolutely no interest for the duration of the loan. Interest can be charged, but it will be subsidized by the Federal government.

11. Here's the great part. If you get one of these loans, you don't have to make any payments for the first year.

12. There are absolutely no upfront fees allowed. Getting such a loan is 100% free (of course you have to pay principal and interest after the one year moratorium).

13. The SBA will decide whether or not collateral is required. In other words, if you have to put liens on your property or residence. My guess is they will lax as to this requirement.

14. You can get these loans until September 30, 2010.

15. Because this is emergency legislation, within 15 days after signing the bill, the SBA has to come up with regulations.

Here is a summary of the actual legislative language if you are having trouble getting to sleep:

SEC. 506. BUSINESS STABILIZATION PROGRAM. (a) IN GENERAL- Subject to the availability of appropriations, the Administrator of the Small Business Administration shall carry out a program to provide loans on a deferred basis to viable (as such term is determined pursuant to regulation by the Administrator of the Small Business Administration) small business concerns that have a qualifying small business loan and are experiencing immediate financial hardship.

(b) ELIGIBLE BORROWER- A small business concern as defined under section 3 of the Small Business Act (15 U.S.C. 632).

(c) QUALIFYING SMALL BUSINESS LOAN- A loan made to a small business concern that meets the eligibility standards in section 7(a) of the Small Business Act (15 U.S.C. 636(a)) but shall not include loans guarantees (or loan guarantee commitments made) by the Administrator prior to the date of enactment of this Act.

(d) LOAN SIZE- Loans guaranteed under this section may not exceed $35,000.

(e) PURPOSE- Loans guaranteed under this program shall be used to make periodic payment of principal and interest, either in full or in part, on an existing qualifying small business loan for a period of time not to exceed 6 months.

(f) LOAN TERMS- Loans made under this section shall:

(1) carry a 100 percent guaranty; and

(2) have interest fully subsidized for the period of repayment.

(g) REPAYMENT- Repayment for loans made under this section shall--

(1) be amortized over a period of time not to exceed 5 years; and

(2) not begin until 12 months after the final disbursement of funds is made.

(h) COLLATERAL- The Administrator of the Small Business Administration may accept any available collateral, including subordinated liens, to secure loans made under this section.

(i) FEES- The Administrator of the Small Business Administration is prohibited from charging any processing fees, origination fees, application fees, points, brokerage fees, bonus points, prepayment penalties, and other fees that could be charged to a loan applicant for loans under this section.

(j) SUNSET- The Administrator of the Small Business Administration shall not issue loan guarantees under this section after September 30, 2010.

(k) EMERGENCY RULEMAKING AUTHORITY- The Administrator of the Small Business Administration shall issue regulations under this section within 15 days after the date of enactment of this section. The notice requirements of section 553(b) of title 5, United States Code shall not apply to the promulgation of such regulations.

The real question is whether a private bank will loan under this program. Unfortunately, few will do so because the statute very clearly states that no fees whatsoever can be charged, and how can a bank make any money if they loan under those circumstances. Sure, they might make money in the secondary market, but that is dried up, so they basically are asked to make a loan out of the goodness of their heart. On a other hand, it carries a first ever 100% government guarantee so the bank's know they will be receiving interest and will have no possibility of losing a single dime. Maybe this will work after all.

But there is something else that would be of interest to a bank. In a way, this is a form of Federal bailout going directly to small community banks. They have on their books loans that are in default and they could easily jump at the chance of being able to bail them out with this program. Especially if they had not been the recipients of the first TARP monies. Contrary to public sentiment, most of them did not receive any money. But again, this might not apply to that community bank. Since they typically package and sell their loans within three to six months, it probably wouldn't even be in default at that point. It would be in the hands of the secondary market investor.

So is this good or bad for small businesses? Frankly, it's good to see that some bailout money is working its way toward small businesses, but most of them would rather have a loan in the first place, as opposed help when in default. Unfortunately, this will have a limited application.

Wouldn't it be better if we simply expanded our small business programs so more businesses could get loans? How about the SBA creating a secondary market for small business loans? I have a novel idea: for the moment forget about defaults, and concentrate on making business loans available to start-ups or existing businesses wanting to expand.

How about having a program that can pay off high interest credit card balances? There is hardly a business out there that has not been financing themselves lately through credit cards, simply because banks are not making loans. It is not unusual for people to have $50,000 plus on their credit cards, just to stay afloat. Talk about saving high interest. You can imagine how much cash flow this would give a small business.

We should applaud Congress for doing their best under short notice to come up with this plan. Sure this is a form of welcome bailout for small businesses, but I believe it misses the mark as to the majority of the 27 million business owners that are simply looking for a loan they can repay, as opposed to a handout.

Sue Malone
442 Diablo Road, Suite 137
Danville, CA 94526
Email: info@StrategiesForSmallBusiness.com

Sue Malone is a small business advocate and founder of Strategies For Small Business, a company devoted to providing SBA Loans for small business owners, whether as start-ups or for the expansion needs of existing businesses. For six years she has been the nations #1 provider of SBA Community Express Loans, having funded over 25,000 businesses in all 50 states. For a free loan consultation or for more information on the programs, visit our website at: http://www.StrategiesForSmallBusiness.com Or call (925) 899-8449.

©2008 Strategies For Small Business. All rights reserved.

A free grant for what? School? Then yes. If you file a FAFSA you will be considered for student grants. These are usually based on income level more than anything else. Otherwise, contact specific schools you are interested in because they most likely have some form of minority scholarship. However, as mentioned before there are not government grants just for being a minority you have to use them for something, usually college.

Minority Small Business Grants - You Can Get Free Money Too!

Author: Gil Salazar

Getting grant money to finance a minority small business are simple today. There are a few minorities that will receive certain privileges concerning grants from the government. Sometimes you can find other agencies that along with the government will be able to give you a minority small business grant. And what do you know? If you already have a business operating then receiving a minority small business grant won't be as much of a challenge.

Come up with a good solid business plan.

Even if you are a minority you will still need an excellent business plan. Sometimes there is an instance where a successful small business owner has been profitable and never wrote a good business plan.

If this is your case, then think of obtaining help from certain experts. Purchase some software to help you set up your business if you'd like. If you have many solutions for everything, it will be easy for you to do the rest. This is very important while obtaining a minority small business grant for yourself.

Minorities opening a business will not get a grant without a compelling business plan that can be successfully operated. Always remember that: you don't stand a chance without a rock-solid business plan. It's hard to compete out there.

Think about using free online templates if you need to. There are many effective business plan templates available online. Many of these templates allow you to perform an analysis of break even points and other provide you with meaning financial summaries.

Where to look first?

Your adventure can begin at the Small Business Association. They won't actually give you grants, but they can guide you to find prospective investors or grantors.

There are a number of organizations searching for new small businesses. (especially owned by minorities) that can really help society. Dedication and returns for the best of community development will open your world to the grant. Go to the website of the SBA to get some key information on minority business grants that are currently available.

Go to Uncle Sam for help.

The United States government happens to be many entrepreneurs' favorite when it comes to getting grants. The Clinton Administration established the minority small business organization of the present times at the beginning of 1990. Many small businesses are recieving their special program as still they are offering financial aid to them.

The American Federal government does not give grant money to you itself, you have to find some local resources which will make the way out. The states or government agencies/departments are normally allocate the considerable amount of money

If you want free grant money from government agencies, you may get it from their sites. To start, register and fill out an application. You are able to apply for just one or for many different grants. It doesn't hurt to apply to as many programs as possible. This will increase your odds of getting minority small business grant by multiple folds.

Get your free minority small business grant here today!

About the Author:

Gil Salazar is a mother who has started her own small business from her home after being awarded a $14,000 government grant. To discover how you can get a grant as well, visit iFreeGrants.com today!

Article Source: ArticlesBase.com - Minority Small Business Grants - You Can Get Free Money Too!

ARE YOU HONEST AND TRUSTWORTHY
I am Mr, Michael Mahone, the (G.M.D) of (Michaelmahone Macro Finance Agency) I am a Reputable Money Lender, who give out loans to individuals and companies in need of loan. Do you have a bad credit? Or are you in need of money to pay bills? I will be glad to render you a loan service at 2% interest rate. I offer loans that can be used for the following: Farm development loan House mortgage loan Business start up loan Student loan Company loan, etc. So interested person should contact me at michaelmahone001@yahoo.com

It is hard to find grants to start a business -- even for minorities. Unlike the myths that some perpetuate, federal government and even private foundations hardly give grant money for starting a for-profit business.

One possible exception is for companies developing or exporting agricultural goods, including food and forest product. Another exception could be the Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) programs http://www.sba.gov/aboutsba/sbaprograms/sbir/index.html , which fund the research and development of technological innovation that meets specific government needs.

Your best bet actually will be from the states if they offer grant programs for women (or any other special interest groups -- minorities, women, disabled, veterans, etc). Or check with non profit organizations, particularly women organizations if they offer grants. Examples include

Iowa Women's Foundation http://www.iawf.org/
New Mexico Women's Foundation http://www.nmwf.org/guidelines.html

Even SBA does NOT give out grants. From the SBA website http://www.sba.gov/mostrequesteditems/CON_FAQ2.html

"The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. (See http://www.sba.gov/financing for more information) While SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments."

Nonetheless, you can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov - these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture.

Here is a listing of federal grants for small businesses. See if there is any available for individuals for starting a business -- THERE'S NONE.

http://12.46.245.173/pls/portal30/CATALOG.BROWSE_BENEF_RPT.show

Most of the federal grants are given to specific target groups with specific requirements (e.g. minority business owners involved in transportation related contracts emanating from DOT - Grant#20.905 Disadvantaged Business Enterprises Short Term Lending Program

Grants are also often given to non profit groups or organizations involved in training or other similar activities (grant 59.043 Women's Business Ownership Assistance that are given to those who will create women's business center that will train women entrepreneurs

Author: Carl Ringwall

There seems to be no end of scams offering free government grants.  They all seem to ask for an upfront fee and then get you nowhere.  There is government grant money to be had, and it doesn't cost anything to get it.  All you have to do is find the grants that suit your needs and fill out the government grant applications.  Finding the right grants is as simple as knowing where to look.

The only grant site that the government has is www.grants.gov.  This is a no charge, full service web site that is dedicated to helping people find and apply for grants.  With access to thousands of grants worth billions of dollars and all the support and application tools you need, www.grants.gov is the perfect place to start looking for grants and filling out the government grant applications.  Once you have registered with www.grants.gov you can find grants, apply for them online, and track their progress.  The site also offers several applicant resources including checklists, tutorials, and user guides.

Another site that offers free resources for finding and completing government grant applications is http://creditfederal.com.  One of the free resources this site offers is access to the online federal grants catalog.  There are also application forms along with instructions available on the site that can be downloaded as either Microsoft Word or PDF documents.  For some of the grants http://creditfederal.com offers online application submission.

A wide variety of government funding sources is www.fundsnetservices.com.  This site has links to several federal and state grantors.  The eligibility requirements for the grants are found on most of the listed web sites.  The site has information about the grants organized by type, making it easy for people to find the grants that are best suited to their needs.  

When looking online for government grant applications and grant resources it is important to be aware of the scams that are out there.  You should never have to pay for information about a government grant - this information is offered by the government free of charge.  There are several reliable, safe, and free resources available on the internet to help people find and apply for the grant that is right for them.  Taking time to visit sites like www.grants.gov, http://creditfederal.com, and www.fundsnetservices.com is well worth the time and effort.

About the Author:

I got government grant applications, bought a business and paid off my bills. Find out how I did it - in just 3 months time.

Article Source: ArticlesBase.com - Government Grant Applications - Must-Read Advice From A Grant Pro

In Business - Only firms currently in business will be considered for certification. Applicants must be the majority owners and involved as full-time in the business to meet eligibility requirements.

Two Year Eligibility - The 8(a) program requires applicants to be in business for at least two years before their application will be considered for approval. Exceptions to this rule are sometimes granted. In such cases, a waiver must first be granted by the SBA. Note: your business must be generating revenues to meet the waiver requirement. This does not mean you have to been making huge profits, but you do have to show invoices and income from the area you are proposing to be certified in.

Business Plan in Place - Sound business management is core to the success of participating 8(a) certified firms. A key aspect of good management is business planning. Prospective 8(a) firms should have a current, well thought out business plan before applying to the program.

Not all industry categories are in high demand as resources for government contracts. The categories noted above are prevalent in the federal procurement arena, especially as 8(a) certified vendors. The federal government buys over $300 billion annually in goods and services. Prospective 8(a) candidates should carefully consider the buying needs of federal agencies, relative to the products and services they provide.

Previous contract work - Businesses with contract work experience are better prepared to enter into federal prime or subcontracting contracts.

Dun & Bradstreet, CCR Registration - Being listed in both of these registries is a requirement before you can apply for SBA 8(a) status.

Business Plan / Basic Financial Documents - Balance Sheet and Profit / Loss Statement Sound financial management is critical to business success. A company's financial capacity and performance are always considered by federal agencies before awarding contracts.

Social and / or Economic Disadvantage - Only applicants who are members of social disadvantage groups can be considered for approval to the program. Economic disadvantage is an eligibility requirement of the 8(a) program and it is defined as a personal net worth of $250,000 or greater, excluding the equity in a personal residence or business.

US Citizenship - Only applicants who are US citizens are eligible to apply for 8(a) status. Each year the federal government sets aside millions of contract dollars for qualified small businesses to bid and receive contracts relating to the many federal agencies. The designation of SBA 8(a) is a coveted program certification. Many federal contracts are "set aside" for 8(a) firms, meaning that only certified businesses may apply or be considered. To become SBA 8(a) certified, a business owner must take the time to apply for and receive certification.

Design2Train, a SBA 8a certified company, was founded by Karen Miller in 2001. Karen is an award-winning instructional designer with over 20+ years of training development experience. Her clients include motivated entrepreneurs, Fortune 500 companies and government agencies. Learn more about the SBA 8a process at: http://www.the8amentor.com

As a Start Up Business Consultant, I often have the unfortunate job of telling potential clients that minority business loans are a fairytale and not a fact. Oddly enough, I get the exact same reaction when I tell these same clients that small business start up grants are also nearly impossible to garner. So what is the good news?  The good news is that I'm about to save you a lot of potentially wasted time and effort by giving you the facts. 

 

Get the Facts!

 

Let's check out these valuable tidbits before we proceed by examining some options -- and the ultimate solution.

 

Fact #1: 

There are no specific business start up loans for members of a minority group.

 

Fact #2: 

The only forms of government guaranteed financing available to minorities are SBA loan products.

 

Fact #3: 

Minority small business start up grants do not exist.

 

What Government Programs Exist to Help Minorities?

 

So what help is available to members of a minority group? The Minority Business Development Agency (MBDA) operates under the auspices of the U.S. Department of Commerce. This government agency was established to give minority entrepreneurs the tools necessary to successfully compete in national and global markets. This agency however, does not offer minority business loans, nor do they hand out minority business start up grants.

 

Why is there So Much Misinformation about Minority Business Loans?

 

In 1977 the US Congress passed a law known as the Community Reinvestment Act. This law prohibited lenders from engaging in discriminatory loan practices in low income communities. This law was specifically intended to encourage banks to approve a larger percentage of loans to minorities. The passage of this law does not constitute a lending program specifically for members of a minority group. It was intended however to require that financial institutions give fair and unbiased consideration to minority loan applicants.

 

What Are My Start Up Financing Options?

 

Here are the most common methods of obtaining small business start up funding: 

• SBA Loans
• Commercial Loans
• Home Equity Loans
• Peer-to-Peer Lending Groups (such as Prosper and Zopa)
• Credit Card Financing
• Loans from Family and Friends
• Bootstrapping 

Consider Getting Some Help from a Start Up Efficiency Expert

 

A Start Up Efficiency Expert can point you in the right direction and advise you on how to reduce and/or eliminate many of your start up and operating costs. Certainly, you should also continue to conduct thorough research.  However, do not trust every source of information you find floating out in cyberspace. You'll not only waste a lot of time - but perhaps face staggering disappointment. 

 

The Solution: 

Find Free Sources of Business Start Up Funding

 

The Start Up Business Survival Guide is an excellent resource for anyone desiring to start a business with very little money. You can make your dreams of owning your own business without bank loans a reality - even if you have poor credit or don't own a home.  

Kimberly Kelly teaches new entrepreneurs the secrets for finding free sources of business start up funding through her ebooks, seminars and coaching services. She is the author of the popular selling ebook: The Start-Up Business Survival Guide: 101 FREE Products and Services to Help Finance Your Dream of Successful Business Ownership. Visit her website at http://www.StartUpBusinessSurvivalGuide.com

Start by reading Canada government's "The Truth About Grants" http://entreprisescanada.ca/servlet/ContentServer?cid=1104766631498&pagename=CBSC_AB%2FCBSC_WebPage%2FCBSC_WebPage_Temp&c=CBSC_WebPage to give you an idea of how HARD it is to get a grant for starting a business

Contact your government agency, and avoid all the promises by the scam artists

Government Business Grants for Small Business Start Ups

Author: Andrew Bicknell

For many entrepreneurs trying to start a small business finding the cash to do so is often a major stumbling point. There are many routes to consider and for most small business owners the first two they think of is either getting a bank loan or finding willing investors who believe in their business. While these two methods do work there is one major drawback, the specter of paying back that money while trying to get your business going.

The third method that many small business start ups seem to forget is getting one of the thousands of government business grants that are offered by the federal government every year. For the fledgling business owner this infusion of free money, that's right, grants do not have to be paid back, can be the difference between a successful start or a dismal failure.

If this sounds like a good way to get started there are several things you need to get organized before you start writing grant proposals for your business endeavor.  The most important part of any new start up is a sound business plan. This is essentially your road map to success and any governmental agency that is responsible for giving grants will want to see one.

Two people who can be of great help when it comes making a business plan and applying for government grants for small businesses are a good accountant and lawyer. They can help guide you through the whole process making sure that your business plan is sound and all the numbers make sense. This can significantly increase your chances of successfully getting a small business grant.

It is important that you use any grant money you receive for the purpose for which you originally stated in your application and business plan. Those agencies that granted the money for your business purposes want to see you succeed. They believe you have a sound plan but if you are found not to be using the money to further your success you stand a good chance of being strongly sanctioned or penalized.

This usually isn't a problem though because most entrepreneurs use the money for its intended purpose, which is to start and grow their business. For this purpose it's hard to beat government business grants.

About the Author:

To learn more about finding and applying for government business grants please click here.

Article Source: ArticlesBase.com - Government Business Grants for Small Business Start Ups