Grants and Loans: 5 Financial Resources for Small Businesses

by QuickBooks

2 min read

The nation’s economic woes have made it tougher for small businesses to get loans and grants. The SBA’s (PDF) loan volume is edging up for fiscal 2013 over 2012, but it’s still down from 2011’s numbers. No statistical data is available for grants, but government budgets have been tight the past few years and many grant dollars are given by local and state governments.

Yet loans and grants can help save struggling businesses, providing much-needed cash flow to jump-start operations. One way to increase your odds of securing financial aid is to look for programs that target small businesses in your demographic or market segment.

Here are a few of the resources available to small businesses:

  1. Accion specializes in helping all types of business owners who have trouble securing traditional loans. Accion lends amounts ranging from $500 to $500,000 and offers financial education, whether you’re just starting up, in transition, or looking to grow your company. It also provides assistance to those implementing green practices, running food and beverage operations, and more.
  2. Center for Community Self-Help brings four lenders together to help small businesses by providing financing and other resources. As of December 2011, the center has provided more than $6 billion in financing to nearly 75,000 individuals and organizations through this collaborative effort. The center provides general and specialty small business loans, along with financing for non-profits, childcare centers, real estate projects, and other organizations that help strengthen communities. Unlike traditional lending institutions, the center is not-for-profit, believing that investing in small businesses and local organizations helps build better communities and provide opportunities to those who traditionally wouldn’t have had access to them.
  3. The Small Business Innovation Research program seeks entrepreneurs who are interested in getting involved in research and development. Various federal agencies set aside 2.5 percent of their R&D budgets to work with small businesses on encouraging innovation. The SBIR program awards up to $150,000 for phase one, where the agency determines that the project has what it takes to succeed. If the project progresses to phase two, the federal government could grant as much as $1 million for up to two years. If the project is successful, your small business receives all of the profits.
  4. The Minority Business Development Agency provides loans to minority-owned small businesses. The federal agency has centers set up throughout the U.S. to advise business owners on what loans are available when banks prove to be a dead end. Each center is staffed with a specialist who works with minority business owners to help them succeed. The agency also works hard on advocacy and outreach to ensure that minority-owned businesses have the information and support they need to succeed.
  5. The SBA Microloan Program lends up to $50,000 specifically targeted to purchases of furniture, inventory, or equipment. Prior to approval, you may be asked to participate in a training session hosted by the lender, designed to help you be successful as a small-business owner. This training can be anything from a one-on-one counseling session to a seminar or class, with length and content determined by the lender. The lender may help you learn how to set up a website, understand how the SBA can help you, or provide other forms of small business consulting.

You can find other types of financial assistance available to small businesses on the SBA’s grants and loans page.

Related Articles

Your Financing Options

Current financing options are broken into three categories: Small Business or High-Growth…

Read more

Financing Options for Small Business Owners

Sooner or later most small businesses find they need financing for one…

Read more

The Military Servicemember’s Guide to Starting a Business

Many of the personality traits that make a person an ideal candidate…

Read more