Being a small business owner means overcoming many obstacles. In addition to the problems that entrepreneurs face in operating business, the most severe problem is to raise capital. You need money to make money, but how can you get an investment if small business owners are treated by banks like borrowers with bad credit? It happens because banks and financial institutions prefer to avoid any risks and are not responsive to the demands of business owners. Fortunately, more and more small business loans are available through the State’s Small Business Credit Initiative (SSBCI).
A win-win solution
The government benefits when it gives small business loans to developing companies, because small and medium sized businesses employ more than 50 percent of the work force and contribute more than 50 percent of the gross domestic product of the country’s GDP. Expert advice and assistance for entrepreneurs is given for free by the Small Business Administration (SBA).
The SBA is a guarantor of loans offered by banks and other private financial institutions through the SSBCI. Credit institutions that accept the terms of the SBA provide loans to small businesses. And if the business owner is unable to repay the loan within the time limit, SBA pays the lender the agreed amount of collateral and the borrower must pay the SBA the full amount. Among various programs are Colorado small business loans for minorities, women, veterans and young entrepreneurs. Different loan programs for small businesses are offered by SBA to stimulate local economy.
The first thing needed for small business loans is a well-written business plan. The State of Colorado offers free advice on this in its network of small business development centers. Applying for small business loans you have to meet extensive and complex requirements, and doing it without any assistance is time-consuming. The OEDIT offers an online guide on business resources, including some advice on writing a business plan and other aspects of starting or expanding a small business in Colorado. This is a good place to start with when you want to get a small business loan. Alternatively, you can hire an experienced consultant, who will know all the steps and have copies of all required documents that are necessary for getting small business loans in Colorado.
Through the SSBCI Colorado’s Cash Collateral Support (CCS) provides easy access to capital for small businesses that have temporary difficulty due to lack of collateral. Through this program a business owner can get a deposit of cash as collateral for a loan when a company cannot meet the loan provider’s collateral requirements. You can learn more about small business loans Colorado offers at the website of The Office of the Colorado Economic Development and International Trade (OEDIT) (www.advancecolorado.com) and find out how your business can benefit from this opportunity.
How small business loans work
Small business loans are advanced to entrepreneurs who invest in a variety of purposes, such as the expansion of their facility, buying technology, buying new tools and better equipment, and also to buy raw materials and hire new specialists.
Small business loans in Colorado are provided on the concept of moderate risk, which is not different from any other form of lending. The concept of moderate risk loans involves maintaining adequate coverage against risks. Take for example, the interest rate. The interest rate on loans to small businesses is higher than normal. Similarly, lenders provide a limited amount on loans to small businesses. This is proof enough of how lenders prepare for any risks that may arise in the future. But the SSBCI is a viable solution for small business owners.
The benefits of Colorado small business loans
What benefits can small business owners get, which will be in their favor? They can repay the borrowed amount in loan installments without additional pressure. Through a flexible repayment schedule, borrowers do not need to make repayments of a pre-determined amount on a pre-determined period. They can make repayments according to the income they will gain. Therefore, in some months there may be smaller payments, overpayments and no payment (known as payment holiday).
Loans for small business in Colorado can be either short-term, from a few months to a year, or long-term up to 25 years. Depending on your business plan and future profit, you may choose repayment duration and other terms and conditions of the loan.
Find out more info about Colorado small business loans here:
US Small Business Administration
721 19th St #426, Denver, CO 80202
Larimer Small Business Development Center
320 E Vine Dr, Fort Collins, CO 80524
Small Business Development Center
900 West Orman Avenue, Pueblo, CO 81004
The Business Incubator Center
2591 Legacy Way, Grand Junction, CO 81503
North Metro Small Business Development Center
Campus Box 6, 3645 West 112th Avenue
Westminster, CO 80031