Article by Macro Business

At the start up stage of any business it is essential for an entrepreneur to distinguish between what is essential and what is desirable. Entrepreneurs must be able to explain their value proposition in a short and simple way. Simple solutions for substantial problems and needs have the greatest potential. At this stage finance and business capital plays a major role. To gather such funds you may want to involve professional advisers. For example, a CA or financial advisor can assess the condition of premises and give you an idea of their value.

This is a stage of a company’s life that is fraught with both opportunities and perils. On the one hand, business growth would carry with it a corresponding increase in financial fortunes for owners and employees alike and on other hand entrepreneurs business startup idea has to be concrete with his or her subsequent efforts to bring that vision to fruition.

This solid base can never be built without having business start up funding plan. In this plan the scrutiny of all the available channels is documented so that in present and near future any contingent situations are met in appropriate manner. If you ever want to raise funds for your business, or involve partners in the future, you simply must have an up-to-date business plan in place.

Start up situations tend to intensively focus on the assets they need to acquire, the space their going to lease, the leasehold improvement cost, and other initial expenditure outlays required to get the business up and running. What tends to be either missed entirely or poorly estimated is the realistic cash flow required to operate the business until such time as the business can sustain itself on a month to month basis.

Small businesses experiencing start up often require additional financing. Finding such capital can be a frustrating experience for the ill-prepared entrepreneur, but for those who plan ahead, it can be far less painful. Businesses should revise their business plan on an annual basis and update marketing strategies accordingly so that you are equipped to secure financing under the most advantageous terms possible.

Among the various channels of startup funding one viable option which is always on the plan are small business loans. For applying such loans one need to estimate start-up costs, you will need to make your best guess of how much it will cost to set up your office for the day you open the front door to your first client. This includes the cost of preparing and equipping your office, getting required licenses and professional memberships, getting the phone hooked up, and funding your initial advertising so on.

Starting your own small can be very rewarding due to the challenges and freedom of being your own boss.  As a small business owner, there will be many options for support to help you along the way.

Small business loans are one way to fund the start up of your business. The SBA (Small Business Administration) is operated by the government as a way to encourage and broaden the strength of small businesses.  The SBA can help bring your dream of starting a small business to reality in today’s challenging market by acting as a guarantor for low-interest, long and short-term loans.

Most small business owners use personal assets, high-interest credit advances, and help from family, friends, and business associates to fund their start up.  SBA loans can eliminate the danger of collecting high-interest debt on your personal accounts by making it easier to gain the capital necessary for running your business.  The SBA makes small business loans work for your company by acting as a guarantor that supports your needs.

The SBA can work with your preferred lender and you to help you get a loan for your small business.  Community support organizations, commercial banks, and micro lending are to help you obtain small business loans with the SBA as a guarantor.

The SBA small business loan programs set lending standards to match the financial needs of your small business.  Your lender distributes the loan according to these standards.  A commercial business loan might be impossible to back with your intitial capital investment. SBA programs provides the credit needed to make sure your business venture is successful.

The SBA has many different loan programs to help meet your small business needs.  The main program that small businesses use to gain access to loans is the basic 7(a).  Basic 7(a) rules let you use the funds for investing into your business to obtain land, cover building expenses, buy equipment and machinery, to spend as capital, and to sometimes allow you to continue running your business for eventual profit by cushioning accrued debt.  Repayment plans can stretch up to 25 years depending on your  spending needs.

If your loan needs are more specific, a different version of the basic 7(a) can be fitted to match your small business expenses.  Some examples are to give your existing small business the needed funds to purchase real estate and to expand or improve.

SBA’s 7(m) program, which are micro loans, enable you to obtain short-term small business loans in smaller amounts, up to $35,000.  The 7(m) can be used for buying supplies and equipment for your small business, as well as for immediate cash-flow needs.  Micro loans enable your lender to help you produce and manage your financial goals and plans.

Difference Between Small Business Loans And Merchant Cash Advance:
This type of loan is different from a small business loans due to the fact to get money for the loan you have to pay it back based on your potential credit card sales. It is said by some that “A merchant advance is ideal for small and mid-size businesses” I could not disagree more, I don’t know a more toxic loan that a small business could get. Though this option is better than trying to deal with a venture capitalist. A Merchant Cash Advance is easy for most companies because most small business take credit cards.

Many small business owners have been disappointed when their applications for small business loans were disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital. According to an article written by Robb Mandelbaum in the August 12, 2009 edition of The New York Times Online, “the program is off to a slow start.” It seems that most banks are reluctant to approve applications for small business loans.

Mandelbaum reports that the Small Business Administration’s program has $255 million to give away, enough to give small businesses 10,000 loans reaching as much as $35,000 each. However, two months after the program was launched, there have only been 1,127 small business loans released, with a total of $36.8 million.

Sources are saying that banks are not very keen on participating in the Small Business Administration’s program because giving the small business loans would not be very profitable for them. Paul Merski,.chief economist of the trade association Independent Community Bankers of America, said, “There’s not a lot of profit motive in a $35,000 loan stretched over six years.” Bob Seiwert from the Center for Commercial Lending and Business Banking at the American Bankers Association reveals that, because of strict underwriting standards, servicing the small business loans becomes even more expensive.

The banks have also found more ways to restrict the approval of small business loans with the Congressional restrictions on loan eligibility. According to Congress, in order to qualify for the Small Business Administration loans, small businesses need to be both struggling and viable. That means the business should have had an “immediate financial hardship” such as a 20 percent decrease in revenue. However, the business must also be at least two years old with proof of positive cash flow in one of the previous two years. It should also submit a two year cash-flow projection proving that it will be able to afford loan payments.

Because of the Congressional restrictions, banks are more likely to approve small business loans from their existing clients. Merski said, “From a financial perspective, it really is a loan that makes sense for an existing customer. You’re not going to have to put out a lot of resources to do a very costly underwriting. You know the business.”

Those who are working in support of small businesses are very much disillusioned. An example is Alex Cooper who is a counselor at the Pima Community College Small Business Development Center in Tucson. He said he had assisted almost 30 small business owners with their loan applications but none of them had been approved. “It’s a disappointment. I thought the banks would be more interested in the community and try to help small businesses,” he said.

When the applications for small business loans are disapproved by banks under the Small Business Administration’s program for America’s Recovery Capital, small business owners still have another option. They can get the equivalent of small business loans from their credit card services.

Credit card services provide their clients with the ability to accept payments through credit cards or debit cards in person, online or through the phone. Clients who have established a certain minimum in average monthly credit card sales are qualified to apply for cash advances that are like small business loans. Payments are automatically deducted from future credit card sales.

If you are a small business owner, you do not have to go through the hassles of applying for small business loans with banks who are reluctant to participate in the Small Business Administration program. Get your trouble free small business loans from your credit card services instead.

Small business owners continue to be impacted by the greed of Wall Street and large banks. Over the past few months,small business owners have struggled to obtain their small business loans and financing. Small business transactions have come to complete halt. As the top US banks have received TARP funding and Wall Street has rallied to over 10,000 small business owners continue to struggle. Financing for small business owners is harder than ever, with terms that are simply unreasonable for most. As banks and hedge funds, such as Goldman Sachs and others, have seen record profits and boost to stock values, your local business is systematically punished by the lack of policy on part of the law makers and reduction of funding from banks.

Seventy percent of Americans work for small business owners. They form the backbone of the US economy. That is the reason why Bizcloud was created. At the same time 22 of the biggest banks that have been the beneficiary of TARP have reduced small business loans by over 8 Billion dollars. Small Business Administration has been ineffective in championing the needs of US business owners and entrepreneurs. The fifteen billion dollars allocated for small business loans is still caught in Washington and banking red tape, and very little if any has been provided to small business owners.

President Obama will be announcing new effort to stimulate small business and entrepreneurship. He is also headed to Japan next month to discuss various geopolitical issues. We hope that the President takes time to meet with Japanese finance minister and discuss the current global economic meltdown. Valuable lessons can be learned from the Financial Services Agency of Japan on how to support small business owners in this country.

Japanese Financial Services Agency has recently stated that it would ask banks and other lenders to ease repayment terms, such as extending repayment deadlines, for smaller and medium size companies as part of emergency legislation for up to three years.
A similar approach can also help United States small business owners.  United States law makers and current administration should consider a similar model. The small business community is asking for a three year freeze of loan interest and principle payments for 261 billion dollars of current small business loan portfolio by the banks.  Considering the financial guarantees of payments provided to Financial Services companies by the United States tax payers, having guarantees provided to small business owners to protect them from the unchecked capitalistic greed of Wall Street bankers would be a huge boost to the US economy.

The cost for this program can be paid for by a three year surcharge tax on large corporate conglomerates, such as Wall Mart, Starbucks, and other mass retailers that operate over 100 corporate owned stores across the nation, and constantly siphon local community profits to Wall Street bankers and hedge funds. These mass corporate retailers and large financial institutions’ policies and unfair business practices have caused the death of small business ownership and entrepreneurship in America.

A simple 10% excise tax on large corporate stores and conglomerates of 100 locations or more can produce billions of dollars in revenue for Federal, State and Local Governments. It would additionally provide a level playing field for small business owners that do not get the special zoning rights, incentives, group health insurance discounts or the purchasing power from Chinese manufactures, and enable them to compete in the local economy.

Unless drastic measures are taken by the current administration, this holiday season will be a very grim one for small business owners. Minister Shizuka Kamei’s proposal for freezing loan repayments by small and medium-size companies battered by credit crunches amid the global economic slowdown is the right step to help sustain small business life in Japan and identical measures are needed in the US.

The Arkansas Small Business Development Center gives a comprehensive collection of Small Business Innovative Research  grant documents designed to introduce and lead you through the Small Business Innovative Research grant process and understand the type and scope of project they are seeking to fund. One can look in to the grant proposal solicitation for reference while completing your collection of Small Business Innovative Research grant application. Do as much of the grant proposal development as you can by yourself. No one knows your idea better than yourself. When you get stuck consult Arkansas small businesses centre to apply for SBIR grants.

Small Business Innovative Research grants are not for every small business. But, if your business has the capability to meet federal government needs, then an SBIR grant might be worth the extra effort to submit. The truth about grants is that very few if any federal grants are available to individuals. The federal government does, however, award grants to state and local governments to help them with economic development, and these are the grants you might be able to take advantage of in financing your small business. For example, some states provide grants for expanding child care centers; creating energy efficient technology; and developing marketing campaigns for tourism. Among the business financing resources you might find a suitable grant. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.

Two Arkansas small businesses that enjoyed remarkable success in competition for NASA Small Business Innovative Research(SBIR) are Phase I and Phase II research programmes that wins three grants. All three grants are targeted at development of high temperature electronics. This SBIR Phase I project seeks to prove the feasibility of developing high power density modular power electronic building blocks based upon high temperature silicon carbide (SiC) multichip power module (MCPM) technologies. The modular approach will allow for auto-configurable stackable modules to be built up in series and/or parallel configurations in order to increase overall system power handling capabilities.

The MCPM building blocks will utilize a decentralized control and communications structure, with a communications network established between the core silicon-on-insulator (SOI) controllers of the MCPMs, but with no single controller in command of the system. The decentralized control scheme will allow for the construction of highly flexible power systems which could perform a wide variety of power electronics applications, including power conversion, motor drive, and power distribution functions

If you cannot find a grant available from the state financial resources, there are plenty of low-interest loan programs backed by the U.S. Small Business Administration (SBA) you may be able to get. By going to Arkansas Economic Development Commission, you will come to know what are the different possibilities for you to get a loan. The other programs are Community Development Block Grant Program developed by Small Business Grant Programs and Small Business Loan Program by Other Sources of Small Business Financing.

Small Business Grant Source:
Learn the application procedures, various funding sources for specific types of businesses and eligibility criteria for small business grants. You can find the most comprehensive information on availing of small business grants by visiting this online guide on grants here

The Federal Government has set aside funds for small business grants and loans. Even though the process for receiving a grant is a long complicated one, one has to fraught with competition and lots of bureaucratic hoops. Also a small business must fit in to definition to qualify. The government requires extensive business planning, reporting and compliance to specifically measure your growth before the loan is given.

To get a grant in Florida for the small business, one has to go through economic development programs of Florida state. Federal money is given to all states to develop small business in specific areas where they see a need. Another issue to consider is that the government grants take time. One must understand that these funds are awarded only annually. You have to write a grant proposal that follows specific guide lines. Any deviation can make your proposal turn down. These grants are not necessarily free money, and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.

U.S. Small Business Administration provides loans to small business entrepreneurs through the following programs.-America’s Recovery Capital Loan Program, Basic 7(a) Loan Program, CAPLines, Certified Development Company Loan Program, Community Express, Microloan Program and Accion USA loan programs. The America’s Recovery Capital  Loan Program provides up to $35,000 in short-term relief for viable small businesses  in Florida facing immediate financial hardship. Each small business is limited to one ARC loan. The Basic 7(a) Loan Program starts, acquires and expands a small business. These loans are the most basic and most used type loan of Small Business Administration SBA business loan programs. Borrowers can apply through a participating lender institution.

The CAPLines is an umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs and the Certified Development Company Loan Program is a long-term financing tool for economic development within a community. This program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Community Express is a Small Business Administration pilot, loan program for small businesses in low and moderate income areas. The Microloan Program provides very small loans to start-up, newly established, or growing small business concerns. SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level. Accion USA gives Small Business Loans that are flexible up to $50,000 to small business owners who have limited or no access to traditional business credit.

Financing for Small Businesses and Non-Profits Loans for small companies and nonprofits whose financing needs are not met by traditional lenders are done by Self Help. If you cannot find a grant available from the state financial resources, there are plenty of low-interest loan programs backed by the U.S. Small Business Administration. These grants are not necessarily free money and usually require the recipient to match funds or combine the grant with other forms of financing such as a loan.

Small Business Grant Source:
Learn the application procedures, various funding sources for specific types of businesses and eligibility criteria for small business grants. You can find the most comprehensive information on availing of small business grants by visiting this online guide on grants here

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