Small Business Funding

When person have limited sources of money, then they can not set up a large business empire. And in establishment of small business very big amount of cash is not needed. First of all, we should be clear about the definition of small business.

According to Small Business Act, a small business concern is one which is owned and operated independently and not dominant in its field of operation.

The law also determines the main things which constitute small business. The definition might vary from industry to industry.

Some of the common examples of small business are:

  • Convenience stores
  • Hairdresser
  • Lawyers
  • Guest house
  • Restaurant
  • Small scale manufacturing

The challenges these business face depends upon the overall business atmosphere. The most important thing that owner should understand the legal requirements and obligations in the particular country of operation.

Problems in Small Business: Small business often faces many problems that are related to their size.

  • Undercapitalization, bankruptcy causes frequently.
  • Poor planning sometimes becomes the basic cause of it.

Recent relief: But now owners of small business can come over it. They can take funds or loans from different sources .These business owners have several type of funding choices.

Some examples of available funding programs can be illustrated as:

  • SBA Business Loan: these are the loans which are given to small business from private sector lenders (bank, etc) which are guaranteed by SBA.
  • Secured - working capital loan: this loan converts company or personal assets into company working capital.
  • Unsecured - working capital loan: based on credit worthiness of the applicant.
  • Start-up loans: loans for starting business.
  • Professional loans: for doctors, lawyers, etc.
  • Equipment loans: loans taken for business equipments

Benefits of funding in small business: There are many benefits of funding in small scale business. Basically these loans are given to help the business owner who does not have strong backing. It is really useful for small business as it helps business to grow faster. Some of the reasons how it is useful for small business as follows:

  • It helps business to grow fast
  • Its helps business in earning more revenues
  • It helps in starting the business.
  • Loans can be given back afterwards.
  • Cash flow becomes easy.

Grants for starting a small business: Many companies give grants to these types of business, these grants can be used in different works. The government also provides funding for subsidized services to small business, which includes:

  • plan consulting,
  • education
  • federally sponsored trade mission.

These funds can be used for many purposes such as:

  • Starting business cost
  • Hiring of employees
  • Equipment and building cost
  • Employees training
  • Marketing
  • Trade mission

Small Business Funding in USA: There are many small business funding programs that are provided by the government of USA and many other organizations. They help small business in many ways. Many sectors came under it.

Some of the most known programs are:

Small Business Innovation Research Program (SBIR): This program at the U.S. Department of Agriculture (USDA) gives funds to qualified small business to support advanced concept research related to important scientific problems and opportunities in agriculture that is in public benefit

Small and Home Based Business: Small business is the vital part of US economy. Many fields come under it such as farmers, micro business, agro- tourism, etc. It supplies Science based information to help entrepreneurs to understand the changes and take full advantage of it.

Its main focus is on:

  • Rural entrepreneurs invigorate local economies through tourism
  • Small and micro business stimulate rural economies

Small Business Funding Opportunities: Number of opportunities is available to grant funds for the small business. Many programs are there. For the funding, CSREES accepts application, consider it. Then grants are given through competitive peer review process. Some of the programs titles are:

  • Animal Manure Management, SBIR
  • Aquaculture, SBIR
  • Soil and Water Resources, SBIR
  • Small business 1
  • Small business II
  • Forest, Related Resources, SBIR

Small Business Funding Centre: Small business needs funds for better working and to earn more. There are many funding centre that help owners of such business to solve their many problems related to different fields of work. Some common centers are:

  • CSREES Funding Opportunity Rural Development, SBIR
  • CSREES Funding Opportunity Small Business I
  • CSREES Funding Opportunity Global Change: Carbon Cycle, NRI
  • Staff Directory Personal Data
  • Financial Security Resources.