Fresno, CA -- (SBWIRE) -- 11/10/2014 -- The federal government has a vested interest in encouraging the growth of small business. As a result, some SBA loans have less stringent requirements for owner's equity and collateral than do commercial loans, making the SBA an excellent financing source for startups. In addition, many SBA loans are for smaller sums than most banks are willing to lend.

A 7(a) loan can be used for many business purposes, including real estate, expansion, equipment, working capital and inventory. The money can be paid back over as long as 25 years for real estate and equipment and 10 years for working capital. Interest rates vary with the type of loan you apply for.

SBAExpress Program
A general 7(a) loan may suit our business's needs best, but the 7(a) program also offers several specialized loans. One of them, the SBAExpress Program, promises quick processing for amounts less than $350,000. SBA Express can get us an answer quickly because approved SBAExpress lenders can use their own documentation and procedures to attach an SBA guarantee to an approved loan without having to wait for SBA approval. The SBA guarantees up to 50 percent of SBAExpress loans.

CAPLines
For businesses that need working capital on a short-term or cyclical basis, the SBA has a collection of revolving and nonrevolving lines of credit called CAPLines. A revolving loan is similar to a credit card, with which we carry a balance that goes up or down, depending on the payments and amounts we borrow. With nonrevolving lines of credit, we borrow a flat amount and pay it off over a set period of time.

CAPLine loans provide business owners short-term credit, with loans that are guaranteed up to $2 million. There are five loan and line-of-credit programs that operate under the CAPLines umbrella:

1. Seasonal line of credit: designed to help businesses during peak seasons, when they face increases in inventory, accounts receivable and labor costs

2. Contract line of credit: used to finance labor and material costs involved in carrying out contracts

3. Standard asset-based line of credit: helps businesses unable to meet credit qualifications associated with long-term credit; provides financing for cyclical, growth, recurring or short-term needs

4. Small asset-based revolving line of credit: provides smaller, asset-based lines of credit (up to $200,000), with requirements that are not as strict as the standard asset-based program

5. Builder's line of credit: used to finance labor and materials costs for small general contractors and builders who are constructing or renovating commercial or residential buildings

Each of the five credit lines has a maturity of up to five years but can be tailored to the borrower's needs.

MicroLoan Program
SBA financing isn't limited to the 7(a) group of loans. The MicroLoan Program helps entrepreneurs get very small loans, up to $35,000. The loans can be used for machinery and equipment, furniture and fixtures, inventory, supplies, and working capital, but they cannot be used to pay existing debts or to purchase real estate. This program is unique because it assists borrowers who generally do not meet traditional lenders' credit standards.

MicroLoans are administered through nonprofit intermediaries. These organizations receive loans from the SBA and then turn around and make loans to entrepreneurs. Small businesses applying for MicroLoan financing may be required to complete some business-skills training before a loan application is considered.

The maximum term for MicroLoans is six years, and the interest rates vary.

CDC/504 Loan Program
On the opposite end of the loan size spectrum is the 504 Loan, which provides long-term, fixed-rate loans for financing fixed assets, usually real estate and equipment. Loans are most often used for growth and expansion.

504 Loans are made through Certified Development Companies (CDCs)--nonprofit intermediaries that work with the SBA, banks and businesses looking for financing. There are CDCs throughout the country, each covering an assigned region.

If we are seeking funds up to $5 million to buy or renovate a building or put in some major equipment, consider bringing our business plan and financial statements to a CDC. Typical percentages for this type of package are 50 percent financed by the bank, 40 percent by the CDC and 10 percent by the business.

In exchange for this below-market, fixed-rate financing, the SBA expects the small business to create or retain jobs or to meet certain public policy goals. Businesses that meet these public policy goals are those whose expansion will contribute to a business district revitalization, such as an empowerment zone; a minority-owned business; an export or manufacturing company; or a company whose expansion will contribute to rural development.

HubZone Program
Since 1980, 40 states have established programs to designate enterprise zones, offering tax breaks and other incentives to businesses that locate in certain economically disadvantaged areas. States vary widely in the number of zones designated, incentives offered and success of the programs. In some areas, businesses may also qualify for lower utility rates or low-interest financing from eligible government jurisdictions. To be eligible for any of these incentives, businesses must generally meet certain criteria, such as creating new jobs in a community.

The HubZone Program was set up to provide tax incentives and stimulate community investment and development. Specified urban and rural communities will receive grants and tax breaks for businesses in the area. The federal government's involvement means entrepreneurs in those areas can get federal tax breaks, not just state.

8(a) Business Development Program
The SBA's 8(a) program is a small-business set-aside program that allows certified socially and economically disadvantaged companies to enter the federal procurement market as well as the economic mainstream. The 8(a) program is envisioned as a starter program for minority businesses, which must leave the program after nine years.

Entrepreneurs who participate in the 8(a) program are eligible for the 7(a) Guaranty Loan and the Pre-Qualification Programs. Businesses must be owned by a socially and economically disadvantaged individual. Socially disadvantaged categories include race and ethnicity. To qualify as economically disadvantaged, the person must have a net worth of less than $250,000 as well as two years' worth of tax returns.

About Start up Business Loans
As commercial loan brokers, our mission is to provide our clients with the highest quality of service and efficiency. We provide our clients with extensive loan processing by experts on our quick, simple and safe process, while closing loans faster than anyone else. Here at Biz4Loans, the customer is our top priority.

Who We Are

Biz4Loans is a California-based loan company with an exciting new way of quickly closing commercial loans for businesses small and large. With a customer-centric focus and a high standard for quality service, we embrace new technology to pass cost savings on to our business clients.

Entrepreneurship Advocates

“Entrepreneurship is living a few years of the life like most people won’t, so that one can spend the rest of their life like most people can’t. “ – Anonymous

We believe entrepreneurship to be one of the most rewarding journeys that a person can pursue and that no two entrepreneurs are the same. Some seek a better life for themselves and their families while others take on the risk in pursuit of independence. Whether it is a small town where everyone knows each other or a big city that never sleeps, every community relies on entrepreneurs to create and provide jobs and to usher in new possibilities.

At Biz4Loans, we understand the challenges that entrepreneurs face in financing their venture. We also understand that a startup entrepreneur frequently has to wear many different hats while her company is getting off the ground. This is why we provide a quick, convenient, and detail-oriented process that achieves results without unnecessary delays or obstacles. For more info visit http://www.biz4loans.com/