- Market Directly to the Consumer
- Party Plan
- Direct Mail
- Telemarketing
- Multilevel Marketing
- Television Infomercials
- Pay-Per-Call
- Internet
- Market Through the Government
- Market Through Distribution Channels
- Market Through Foreign Trade
- Market Through Specialty Channels
- Market Through Email
- Retail Stores
- Sales Promotion
- Media Outlets
- Entrepreneur Profile
- Start-Up Costs
- Operating Costs
- 20 Financing Approaches
- Choosing a Bank
- 4 Cs of Credit
- Underwriting
- Loans
- Equity Financing
- Extending Credit
- Equipment Leasing
- Venture Capital
- Angel Investors
- Personal Guarantees
- Bookkeeping and Financial Statements
- Entrepreneur Profile
- Tax Basics
- Income Taxes
- When To Pay
- Minimizing Taxes
- Home Business
- Travel and Entertainment Expenses
- Automobile Expense and Mileage
- Retirement Plans
- Medical Expenses
- Sales and Use Taxes
- Property Taxes
- W-4 and I-9
- W-2, W-3 and Form 1096
- FICA, Social Security and Medicare
- Unemployment Taxes
- Form 1099
- Payroll
- Business Tax
- Excise Tax
- Tax Tips
- Audits
- Business Insurance Agents
- Workers’ Compensation
- Property Insurance
- General Liability
- General Medical
- COBRA
- Directors and Officers
- Employment Practices Liability
- Errors and Omissions
- Product Liability
- Operations
- Business Interruption
- Disability
- Life
- Claims
- IRS Section 125
- Home-Based Business
- Entrepreneur Profile
- Nondisclosure Agreement
- Sale of Goods Agreement
- Sale of Specialty Goods Agreement
- Terms and Conditions
- Promissory Note
- Guarantee
- Corporation Articles of Incorporation
- Corporation Bylaws
- Bank Resolution
- IRC Section 83 Election
- Independent Contractor Agreement
- Employment Agreement
- Sexual Harassment Policy
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Steven D. Strauss
Author of The Small Business Bible |
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ORDER NOW: The Small Business Bible |
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Stephanie Chandler
Author of The Business Startup Checklist & Planning Guide |
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ORDER NOW: The Business Startup Checklist & Planning Guide |
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Joe Kennedy
Author of The Small Business Owner's Manual |
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ORDER NOW: The Small Business Owner's Manual |
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Tom Severance
Author of Business Start-Up Guide |
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ORDER NOW: Business Start-Up Guide |
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The 504 program funds about 30 percent of the amount of the Section 7(a) program, because it is intended for narrower purposes: 504 loans are directed toward small businesses that may increase or retain jobs or otherwise meet public policy goals. Loans may range from $200,000 to $10 million. About 8,000 504 loans are funded per year (in contrast to 70,000-plus Section 7(a) loans). Funds are typically used to provide long-term financing for the construction or renovation of buildings, equipment, real estate, leasehold improvements, parking lots, and landscaping. 504 loans may be more difficult to obtain because small businesses must go through the normal loan approval process but also jump through a complex set of political hoops.
Small businesses usually invest 10 percent of their own funds into a project, a commercial lender provides 50 percent, and a Certified Development Company (CDC) puts up the remaining 40 percent. CDCs are non-profit organizations that put the project together for the other parties. A list of CDCs is available at www.sbc.gov. Note that the 10 percent small business contribution is less than required in other programs.
As for rates and fees, commercial lenders are able to provide funds at normal commercial rates because the deal is safer, and because of their first lien on collateral. Similarly, the CDC charges 0.50 percent to 0.75 percent below commercial rates because the SBA guarantees this amount. However, the SBA charges 3 percent of the guaranteed amount as a one-time fee, thus significantly increasing the real cost of funds.
Excerpted from The Small Business Owner’s Manual © 2005, The Career Press