You don’t have become an expert on government loan programs to get government financing for your small business.
The government does not lend money out directly, the financing is indirect via incentives to the banks and other finance entities. For example, if the borrower and loan purpose qualifies, the Small Business Administration guarantees a percentage of the loan the bank makes to the business.
Although you need not become an expert, you should certainly do a bit of research of your own to learn about the various financing opportunities.
Government Financing Resources
Generally, government backed financing programs DO NOT guarantee that all businesses will get a loan. These programs require that banks underwrite the loans the same as they would for any other loan but with some exceptions.
What Makes Government Backed Financing Different
- Lower down payments on equipment or real estate, can be as low as no money down.
- Longer repayment terms, the loan payments can be stretched out over a longer than normal time period in order to make the loan payments affordable.
- Collateral requirements can be loosened.
The above exceptions can be a tool for the bank and borrower to get loans done that might not be accomplished with conventional financing.
You can always start the process the old fashioned way by having a conversation with a business banker.