Loans and grants
For any business activity, finance is one of the most important requirements. There are many ways of fulfilling the financial requirements for the setting up or expansion of existing business unit. Loans and grants are some such sources. There are many types of loans that are granted to the business units by various financial units that include banks, various government agencies etc. Apart from loans, grants are also provided to the needy business units. It is important to note here that in all the countries, government pass financial help in the form of subsidy or low interest rates or even in the form of loan amount that is not required to be repaid.
All these are included in grants provided by government. Grants are mostly provided for the uplifting of a particular sector of economy like small business sector or for inculcating entrepreneurship in the women so that they can also participate in the development of nation. Loans to small business units are also provided by government on priority basis, so that it can also contribute greatly to the gross domestic product. These loans are mostly provided by way of different financial institutions that have branches across the country.
In United States, Small Business Center takes care of all the financial needs of various small business units in the country. Loans up to $150000 are provided to such units for fulfilling different requirements. There are many characteristics of these loans that make them quite useful. For example, these loans are approved in as less as 48 hours and a person can get the required cash within 10 days. Even if a person is suffering from poor or bad credit, it is not a problem and no security or collateral is to be provided. There are no closing costs associated with such loans and there is no application fee that is required to be paid by a person. The application process is quite simple and a person has to fill single page for applying for the loan. The repayment of the loan can be done as funds are generated in the small business unit. But there are some qualifying standards that have to be passed by a person that wishes to get these loans. Apart from the above, working capital loans are also provided to the small business sector and the minimum amount that is provided in such loans is $5000. For starting the business loan, even loans up to $350000 are also available. .
Grants are also one of important sources for fulfilling financial requirements for the startup or expansion of the business unit. In all the countries, government passes grants by way of its various agencies to identified sector and people. Some financial institutions also pass grants. Various types of grants available in United States includes education grants for the students pursuing different types of education programs, business grants for the start up of new business activities, personal or individual grants for the different necessities etc. It is important to note here that these grants are not provided directly by the federal government and instead, many state government agencies, not-for-profit organizations and other lending institutions given away such grants for the start up and expansion of the business unit. Grants are available for setting up different types of units and all the people that have been classifieds as resident of United States and all citizens in United State can receive these grants.
A person has to be more than 18 years of age and the amount of grant involves the maximum of $50000. SBA or Small Business Administration takes care of all these loans and grants in the nation and these are executed by way of different types of financial institutions and government agencies. However, a person is required to have a good credit report, which is ensured by different mediums by the lending institutions and government agencies before providing loans and grants. There are also some special sectors that are given priority in providing loans and grants by the government. These include minority communities, women entrepreneur and loans and grants for the setting up of new business units. U.S Federal Government is the biggest provider of loans and grants mentioned above and all the activities related to the loans and grants are taken care of by SBA. For getting detailed information, a person can log on to smallbusinesscenter.com.
The main aim of providing such loans and grants to individuals and business units is to encourage the financial institutions to provide loans to such people and business units that have not been able to receive the financial help. Small Business Administration runs four types of loan programs. These are Business Loan Guaranty Program, 7(a) ; Micro Loan Programs 7(m); 504 Certified business loan programs and last but not the least, Small Business Investment Company loan programs.
The amount received under loans and grants are used for different types of purpose. These purposes include expansion of the existing business units, financing the lines of credit obtained, refinancing the different types of existing debts, financing the receivables and increasing the working capital, purchasing of machinery, fixtures, equipments etc, purchasing land and buildings for the business purpose etc. There is also a SBA pre-qualification program that is offered to the women, minorities, retired armed force personnel, small business owners in the rural settings and other specified sectors. Grants are provided to the small business sector under two heads. These are SBIR Program and STTR Program. SBIR refers to the Small Business Innovation Research Program and STTR refers to Small Business Technology Transfer Program.
Overall, loans are grants are available for the small business units in United States for the fulfilling management, financial and technical needs.
In Canada, loans are grants are provided by the Canadian Government in order to assist small business sector in developing. Loans and grants are provided for various purposes like purchasing new equipments, training, expansions etc. It is important to note here that more than $120 billion are provided by the Canadian Government by way of loans and grants to the small business sector. These loans are grants are provided by various financial institutions and various government agencies across the country.
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