If you’re looking to start your very own business and are on the market for a loan, then you should thoroughly understand and consider all of the services rendered by the Small Business Administration. So, what really is the Small Business administration (SBA)? It is an agency which was first established in 1953 and it works without any interference from the federal government. It has the responsibility of providing assistance to American small businesses in the following four areas:

Management
Advocacy
Procurement
Financial aid.
It provides these services through its business loan programs, investment programs, disaster loan programs and even bonding (though just for contractors). Out of all these programs, the most significant one is the business loan program.

If you are looking for finance and funding for your business, then one of your best options is the SBA, they have a variety of programs, to suit the needs of every businessman.

Debt Financing

If you own a small business, then the SBA will not provide you with a direct loan, they’ll go one step ahead and give you all the guidelines for the loans you apply for. You can subsequently approach partners, microfinance institutions etc, for the loan. The SBA will vouch for you, that the loan will indeed be repaid.

Thus, when you are applying for a loan to the SBA, you are in fact, applying for a commercial loan, custom made according to the requirements of the SBA and of course, with a seal of approval from the SBA. But, there’s a catch, you won’t be able to get these loans if you have some other source of financing on reasonable conditions and terms. The policies of the SBA are subject to change in case the Government decides to change its fiscal policy.

Equity Financing

Everyone is a bit wary of the term Venture Capital funding, but with the Small Business Administration by your side, you can be rest assured that you won’t be venturing into troubled waters. The SBA provides venture funding (by means of a partially public, partially private investment partnership) to small businesses. The funds are basically privately owned, but are managed by the SBA as well as licensed and regulated by them. The terms and conditions are reasonable, unlike other venture capital firms, but the SBA may choose to limit its investments to only legitimate small businesses.

Surety Bonds

The Bonding Program of the SBA is specifically designed with the aim of helping small venture contractors acquire surety bonds; often these business contractors cannot acquire them through the conventional channels. What is a surety bond? It is basically a bond signed between three parties – the contractor, a surety (someone who guarantees that the debt will be paid back) and of course, a project owner.

If the contractor is, for some reason, not able to see the contract through its successful completion, the surer takes on all of his responsibilities. So, the Small Business Administration is really a boon, and has helped many small businesses flourish over the years, so do consider approaching it for kick starting your business venture.