Borrowing Solutions for Small Businesses

by admin on June 20, 2011

Small businesses have access to a number of borrowing solutions through the federal government and the banks. The federal government extends a variety of grants and loans to small business owners. Economic injury disaster loans are one example of loans extended to small businesses found in declared disaster areas. Financial assistance is provided in the from of long-term, low-interest loans, covering for losses that have not been covered in full by other recoveries such as insurances. The Small Business Investment Company Program is also intended to serve the needs of small business owners by offering venture capital to growing and start-up businesses. The program is set in place to supply long-term loans, equity capital, and management assistance to eligible small business owners. Military Reservist Economic Injury Disaster Loan presents another funding opportunity for small businesses. It offers funds to businesses who seek to meet necessary and ordinary expenses, which cannot be met because an important employee has been called up to active duty. This program offers working capital necessary to cover outstanding obligations in order for operations to return to normal. The purpose of this loan type is not to cover lost profits or income. In addition, loans are not extended to expand business operations, refinance long-term loans, or serve as a substitute for commercial debt.

Finally, the Short Term Lending Program is another option for small business owners who seek financing as to participate in transportation-related contracts. Lines of credit are also offered by the Office of Small and Disadvantaged Businesses Utilization thanks to a cooperative agreement between participating lenders and the Department of Transportation. Note that participating lenders are responsible for servicing and loan processing. Lines of credit are offered for a period of one year. Borrowers can request up to a 5-years renewal as long as they are eligible.

Loans and other borrowing solutions are offered by US banks as well. The Bank of America is one financial institution which offers financial products specifically intended for small businesses. The bank offers credit cards, lending solutions, healthcare practice loans, and other types of financing. Business owners can choose from a variety of rewards and cash back credit cards, basic cards, and travel rewards cards. The Asiana Visa Business Card, for example, is featured with a 0 introductory interest rate over the first nine billing cycles and an annual fee of $80. Te standard interest rate on balance transfers and purchases is set at 13.24 APR. The first purchase earns cardholders 10,000 bonus miles. No limit is set on the miles you can collect, and each $1 brings you one bonus point. In addition, borrowing solutions include business lines of credit, business loans, and business leases.

Another financial institution to check with is the First American Bank. It offers a variety of borrowing solutions, including equipment financing, commercial mortgages, line of credit sweeps, asset based lending, and working capital loans. The bank offers commercial mortgages with a term of up to five years and floating or fixed rates. Loan officers offer help in choosing mortgage solutions and determining the right amount of financing. Working capital loans are another borrowing solution that lets you borrow against inventory and accounts receivable, as to improve your cash flow. Equipment loans are flexible, customized and intended for all kinds of business needs and equipment. Business owners can choose between two payment method types – floating and fixed. Up to a five-year amortization is allowed. The bank can finance up to 100 percent of your purchases, based on your circumstances and needs.

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