Government Small Business Loans
GOVERNMENT SMALL BUSINESS LOANS are an option for getting money for a startup outside of angel investment, private investment or conventional lending.
The government helps create small business loans by working with lenders to provide financing for those that would otherwise not obtain a loan.
While a government small business loan or grant is one option, it is not possible for everyone. We recommend also considering home equity as an option for financing part of your startup company. Home equity loans have many advantages. Home equity loans have tax deductible interest payments and they are usually far easier to obtain. The tradeoff is that they are for smaller loan amounts and you place your home at some measure of risk if you cannot make payments.
We recommend coming up with as much capital as you can from partners or investors and also taking out a home equity loan for a reasonable portion of your startup costs to get your business off the ground.
Government small business loans are the first thing to ask a lender about because special programs exist that you may be able to qualify for. However, because most borrowers run into trouble trying to get their first small business loan we recommend considering alternatives such as home equity.
Common Government Small Business Loans Questions:
1. Why use a home equity loan in place of a government small business loan?
You may have trouble obtaining a government small business loans because of the rigid requirements placed on who the government will loan money to. Home equity loans are tax deductible and easier to obtain for small business ventures.
2. Where can I find help getting a government loan?The SBA (Small Business Administration) has a great deal of online information about obtaining business loans and the options the government offers to help you get your business off the ground.
3. Are there home equity loan limits?Typically the limit on a home equity loan is the amount of equity you have in your home. We recommend using only a portion of your equity in place of a government small business loan.