Funding to Start a Small Business

You don’t have to be a self-made millionaire or come from money to start a business. In recent years the number of entrepreneurs across the country has skyrocketed. According to Forbes magazine, “as of March 2011, there are an average of 320 new businesses launched every month, for every 100,000 U.S. adults.” That breaks down to an average of more than 540,000 new businesses launched monthly. Most sources estimate that the total number of entrepreneurs in the U.S. is 11.5 million—making up nearly 4 percent of the population. “A high number of new entrepreneurs—nearly 30 percent—are age 20–34, accounting for 270 new companies per 100,000 U.S. adults every month,” according to Forbes. And not all of them come from money, or quit jobs on Wall Street to follow their dreams. “For these young entrepreneurs,” reports Forbes, “access to funding and understanding of the pros and cons of the various varieties of funding is a critical key.” Funding-to-Start-a-Small-Business-IMAGE

The U.S. Small Business Administration (SBA) maintains a spattering of helpful sources if you’re ready to consider funding to start a small business. The most prevalent of these sources is an SBA loan. According to the SBA, “to start the process, you should visit a local bank or lending institution that participates in SBA programs.” Only those that officially participate in SBA-sanctioned activities are guaranteed by the SBA. “This guarantee represents the portion of the loan that the SBA will repay to the lender if you default on your loan payments.”

There are three different types of SBA loans: the Basic 7(a) Loan, the Certified Development Company 504 Loan, and the Microloan program. Knowing which of these loans is the best for your small business is best determined with the help of a small business attorney. The SBA also offers business loans for businesses affected by natural disasters—there are two types: a Disaster Assistance Loan and an Economic Injury Loan. These were designed to help businesses forced to shutter their doors in the face of disaster; an integral process in getting the region back up and running.

If you or someone you know is considering starting a business, don’t go through it alone. Contact a dedicated business lawyer today.