A Business Loan and How to Get One

Contrary to popular belief, government agencies generally do not make loans directly to business owners. The government provides a guarantee to banks and lenders who provide a business loan to a small business. This guarantee is a promise to pay a portion of the loan back to the bank in case a business owner defaults on the loan. A guaranty reduces the lender's risk, which allows the lender to make loans to business owners who do not qualify for traditional loans.

Consequently, the first place to start looking for a loan is with your local commercial bank or lending institution. The lender will have all the forms you'll need to apply for a government-backed loan, and will work with the government on the application process.

You should also look to your state and local government agencies and local non-profits. Some of these organizations make loans directly to businesses, which means you won't need to go through a bank.

Venture Capital

Don't overlook the government when looking for a Business Loan.