It is always exciting to start ones own business and be self employed. You may not necessarily have funds to venture into a business; however, you must have a project idea that has the potential to work in the future and work in a good manner. History shows that people who had nursed ambitions of making personal wealth when starting a new business, failed after sometime whereas businesses which grew as means to support other people, create jobs and help others survived even the toughest economic losses and today, they are in the green again!
Personal wealth from business is a by-product and not the main product. The main product and aim of your business is to satisfy your customers/clients and provide them with the best of your produce. Only people having access to essential items like oil/energy could think selfishly and make personal wealth because whatever happens there is always a pull for their product!
Moving away from the topic of personal and company wealth, wealth can only be managed once you earn it! And for creating wealth, you need money in the beginning. The government agency like the SBA or the small business association is here for help.
Classification on the Type of Business
The SBA classifies businesses according to the type of end product they deal with. For example, if youre into construction business, even a $ 10 million grant is considered as a small business. On the other hand if youre into a simple neighborhood supermarket, the amount of $ 10 million qualifies as a big business and not small. To make things easier for itself, the government hence follows the rules of classification.
The Part where You Pay the Interest on the Loan Amount
Where does the money come from? The government is certainly not a bank and is not free to invest public money wherever it wants to. Believe it or not, the government also takes money from banks and financial institutions and makes that available to you! In case you declare premature bankruptcy and fail to pay your part, the banks dont stand a chance of losing money as the government will surely return their money but the government will extract money from you in a way depending on the type of agreement you have with the same.
To qualify for SBA assistance, you MUST have been rejected by other sources where you could find financial assistance, other than the government of course. In case the government also denied your application, you may want to review your project and approach private investors such as angel investors or venture capitalists.
There are certain advantages of taking government assistance for your small business. What tops the list is the government guarantee that comes with the funds. But beware that the government does not at any point of time mention that youre at your free will to return the money or not! If you have taken financial assistance, you have to pay the capital amount back with the interest amount as decided in the deal!
Looking for more useful information on SBA loans? Visit http://www.ventureworthy.com/SBA-loans.asp today.