Small business loan california
Small business is the backbone of California\'s economy. California economy which is the largest in the nation and fifth largest in the world depends primarily on the small businesses running on its courtyard. One might easily make the premises about small business in the state of California by this fact that small business comprise 98% of all business in the state, provides 82 % of the private sector jobs and 75% of gross state product. Small businesses sector is the largest employer. The state has an estimated total of 3,575,200 small businesses based on the most recent data. Firms with employees numbered 1,075,066 in 2005, of which an estimated 99.2 percent or 1,066,465 were small firms ( Sources:U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau;U.S. Dept. of Labor, Bureau of Labor Statistics. Hence Small business s not small here in the state of California, it\'s a gigantic sector compassing in itself the economics of this huge state. Therefore, if we call California as a small business paradise it won\'t be an exaggeration, flourishing more under the aegis of California\'s government.
Being a mammoth sector the Small businesses require finance for their further enhancement which includes infrastructure and other sundry expenses. The two primary sources which the small businesses in California use for financing are commercial banks and savings and loan institution.
SBA 504: SBA 504 loan is meant for those small business entrepreneurs who want to acquire a loan to build or develop their own facilities. The borrower of SBA 504 loan avail of facilities like loan for a longer period of time, below market interest rates and at fixed rate financing and is available with almost all the private lending institutes. You can borrow up to 90% of the total project cost or appraised value of the property whichever is less. As SBA 504 loan you can get maximum amount up to $2.00 million for most businesses and $4.00 for manufacturing businesses. SBA 504 loan is probably the most reasonable loan that is available to small business owners in California. CDC has been a leader in the field but most of the private commercial bank and lending institutes can provide you the loan. Some of the other loan available to you in state of California are
2. The 7A loan: it is the most basic and common loan that is available to small business not only in California but whole of the America. These loans are available only when you can provide a guarantee. The small business act (SBA) does not guarantee everyone the 7A loan. Only those lenders who chose to structure their own loan according to the SAB norms and apply to SBA and in lieu receive a guarantee only on that loan or a loan amount as guaranteed by a loan. Its wholly and solely at the discretion of the SBA to provide the loan. The maximum loan amount that you can receive through the loan is $2.million. But beware that the ABA guarantee\'s only till $1.5 million .the maximum loan maturity is for 25 years for real estate and equipments and 7 years for working capital.
3. Community loan program: CDC is a nonprofit organization funding the small business with SBA loans finance. The group works for about 100 private lenders and have claimed to have help finance thousands of small businesses, funding over $1 billion on SBA 504 loans. The community loan program by CDC is for those small businesses who fail to get a loan due to some qualifying constraints. This program is targeted at those small businesses that are emerging and comparatively new, offering them finance option for growth and expansion. The intention is to promote the small business sector which is the life- blood of the California state.
4. SBA Micro Loan program: this is the new kid on the block with its coming to life only in 2001. The loan prepares you and provides you with pre and post loan technical assistance. The cap of the loan is $35000.this is very beneficial for the people who want to start off a small business.
5. SoCal CDFI :almost similar to the SBA micro loan program it is loan meant for the pre and post loan assistance to fight the jitters of getting a bigger loan. You can avail up to $150000 to finance your needs for your small business.
6. California state guarantee loan program: This program is an initiative of the federal government of California to enhance the setting up and growth of small businesses in the state. The program provide the lender an additional security by 11 non-profit FDC located within the perimeter of the state on behalf state government, for credit request which in normal circumstances he refuses to accept. This program proves the invincibility of small business in California. The state guarantees up to 90% of the commercial loan which should not exceed a limit of $500,000. The guarantee is not backed by state government directly but through a special $32 million trust fund. Maximum loan term should not exceed a term of 7 years. Therefore these are some of the option that are widely available to you in the state of California and with increasing patronage of federal government over the small business you can surly make your small business do wonders.
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