About Small Business Financing

2007-03-08 10:33:40

( Business )



Small business financing programs have been established to help small businesses. Small businesses get loans that may have otherwise been available to them. Small business financing helps business owners to lease both new or used equipment they need for their ventures.

Eligibility for small business financing may vary by location and country. Most small business financing programs accept any kind of business as long as they are there to gain profit and their profits do not exceed a specific amount determined by the program. Charities and other non-profit organizations are not eligible for this program.

Financing for small businesses can be used for commercial loans such as a purchase or lease of real estate property or a purchase or lease of equipment. This program also covers the purchase or lease of commercial vehicles.

Small business financing does not exclude you from the screening process of the bank or lending institution. You will still be required to provide documents and you will still undergo credit investigation. Some lending institutions also require a guarantor.

Interest rates for these types of financing programs can either be floating or fixed rates. Interest rates are determined by the current prime lending rate. There are also additional fees included upon approval of the financing. Most lending institutions charge a minimal registration fee that is dependent on the amount that you are going to loan. They may also charge additional administrative fees. Most small business financing programs require the loans to be completely paid off within ten years.

Small business financing benefits both small businesses and the lending institutions. Small businesses are granted access to financing programs that are not ordinarily available to them. Small businesses also provide opportunities for growth and employment. The lending institutions get more clients and meet the needs of other emerging ventures.


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