Government Grants for Young Entrepreneurs

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Small Business Administration

• The Small Business Administration is an independent agency of the federal government that helps small businesses succeed. The Small Business Administration employs experts that give financial advice and allocate loans and grants to small businesses. If you are a young entrepreneur who wants to open a new business, the Small Business Administration is an excellent resource.
  
  

7(a) Loan Program

• Some young entrepreneurs do not have the history or line of credit to participate in traditional loan programs. One helpful loan program for young entrepreneurs offered by the Small Business Administration is the 7(a) Loan. The 7(a) Loan Program is granted by private lenders and backed by the Small Business Administration. The federal government promises the private lender that if the small business cannot repay a loan on time, the government will reimburse the lender. Although the federal government protects the lender with a guaranteed payment, the Small Business Administration enforces the entrepreneur's original loan agreement.
  
  

Microloan Program

• The Small Business Administration offers the Microloan Program to businesses for short-term goals. The Small Business Administration loans money to local and community creditors that directly help small businesses. The maximum loan a young entrepreneur can receive is $35,000. The entrepreneur must use the loan for short-term capital needs, such as inventory or technology. Entrepreneurs must complete a training program set up by local creditors in order to receive the loan. As of 2010, the interest rates for the loans range from 8 to 13 percent. Borrowers must pay off the loan within six years.
  
  

The CDC/504 Loan Program

• The Small Business Administration offers a long-term loan program called the CDC/504 Loan Program, which distributes funds to nonprofit organizations across the country. A young entrepreneur must apply with his local nonprofit organization to receive the CDC/504 loan. This loan is perfect for a young entrepreneur because its main purpose is to buy large capital and property. Typical uses for the loan program include purchasing offices, buildings, or land on which to build the business. Borrowers can use the loans to purchase construction equipment or hire renovators to re-build or re-furnish the business office. If the young entrepreneur owns an existing business, the business must make less than $2.5 million a year after taxes to be eligible for the loan. The maximum loan under the program is $1.5 million dollars. The business must guarantee job creation as a result of this loan. These are fixed-rate loans with five- or 10-year payment plans. As of 2010, the interest rate is set at 3 percent.
  
  

[RebeccaR]

Great link