SBA Loans, Helping Hand For Small Businesses
SBA loans, a lot of people might be blurred with the meaning of SBA
, because many think that SBA loans are just type of loans offered by local banks wherever they are. Actually, it is simply abbreviation of Small Business Administration loan, a loan which is offered by Small Business Administration, United States government agency which has been glorified by those whose business is relatively small, since the year of its establishment back in 1953. With headquarters located in Washington, D.C. its mission is to support the State's economy through development of small businesses, as well as rejuvenating communities due to effect of disasters. Karen Mills, as SBA administrator, confirmed that they are using all 'tools' to offering small businesses help, in the hope that leading the nation's economy through minor aspects is not just an opaque dream.
Some claim that small business is such a good approach to combating poverty, by providing an opportunity for someone to claim each dollar he makes within. It has been reported that SBA loans volume had increased over 25% just a week after American President Barack Obama signed the American Recovery and Reinvestment Act (ARRA) under the law. Another proof of SBA is taken into account seriously is when businesswoman Karen Gordon Mills was chosen by President of the United States, to lead the overall body of SBA. She ever led a well-known private-equity firm called Solera Capital, making her name was somehow bold upon her competitors.
SBA loans itself have several flagships, some of them are 7(A) lending program, 504 fixed asset financing program, MicroLoan program, and economic development program. Each type has its own requirement, terms, and conditions. And each application has to obey one of those 'umbrellas' before finally a loan is released. In some occasions, the way SBA loans work is slightly the same as the way the normal banks do, but SBA loans do not need borrowers in order to refinance every a half decade period, making SBA loans a little bit distinguish than other similar loan programs.
Mentioning bogus businesses, it can be a good opportunity to take advantages from existence of SBA loans. But, the head-of-bogus-company has to bear in mind that SBA loans are quite-easy to be achieved. But if the company is no longer able to stand upon its feet and forces itself to no-longer-bring-the-company-the-bacon, SBA itself will run for the owner and ask him, or her, nicely to liquidate all the assets he, or she, might have. It sounds not too good, but it does happen just that way.
Speaking of small businesses, it can cause vagueness, making 'a-little-bit' unclear boundary between bigger business and the small business itself. Maybe because human-being never ever is satisfied with whatever they currently have, so one which is small now will no longer be so within couple of days. Take example of a news which was brought to the public around May 2009, about eligibility of SBA loans application. SBA loans were reported that 'larger' business are temporary eligible for SBA loans. The 'larger' businesses which are meant here cover auto dealer, as well as industry suppliers. For the auto dealer, it reaped controversy since the auto dealer industry normally has annual sales for more than USD$ 29 million, which literally didn't let the business to consider SBA loans. Making it the other way around, SBA made another 'rule' so the auto dealer industry will now be eligible for SBA loans, which taking SBA's revenue cap no longer upon that industry. Does that mean that SBA loans are now for every business, regardless how big it is? The floor is totally yours to answer such question.
SBA Loans, Helping Hand For Small Businesses
By: Limadijaya Suhendra
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