'7(a) Loan Guarantee Program - SBA guarantees up to $750,000 or 75% of the loan amount which ever is lower. For amounts $100,000 or less, the guarantee is 80%. ' Sounds great, but what are the criteria for this guarantee?

The Small Business Administration (SBA) in the United States has a desire of helping small businesses succeed. One of the ways is to provide financial support to those in need of funding. There is an abundance of types of loans. Here are some examples: 7(a) Loan Guarantee Program - SBA guarantees up to $750,000 or 75% of the loan amount which ever is lower. For amounts $100,000 or less, the guarantee is 80%. CAPLines - it's a revolving credit line similar to a credit card. These are working capital loans to be use on a short term or cyclical basis. International Trade Loan Program - open to individuals who can demonstrate that the loan will expand existing export markets or establish new ones. SBA can guarantee up to 75% of an amount up to a maximum of $1,250,000 in combined working-capital and fixed-asset loans. import-from-china-business.com/page39.html ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

$500K is a lot.  I am from Sierra Leone and I am starting up my business over there.  $200K is even too much to start my technology import business.   Take a closer look at the textile business as that market has a lot of competitors.  Something to think about...

Keep in mind, U.S. Customs will require you to post a surety bond.  You can get the bond as a blanket policy for all of your imports for the year or on a per import basis.   The latter is more expensive, but might make sense for a new company.   I bring this up, as surety bonds are NOT insurance.  Not everyone qualifies for suretyship.  The main underwriting criteria used in order of importance:   Business financial statements for the most recent fiscal year end Credit reports of owner(s) Experience of owner(s) Personal financial statements of owner(s)   Obviously you won't have business financials since it is a new company so they will have to look to your experience.  Do you have any?  If not, it is not likely you will get bonded.  If so, you will need strong personal credit and finances.     If you can not get properly bonded, you cannot operate!  Just something to think about.  Let me know if you have any further questions.

Can you start on a smaller scale? Seems like a lot unless you already have buyers set up. If you already have buyers - you could look into some alternative sources. If you have some equity - you might look into SBA loans. But, I would scale it down first, start small, make sure you have a market, then with a track record behind you - scale upward.

Grants are rarely available to for-profit businesses unless you are involved in the development of cutting edge new technology. What may be available is tax credits for creating new jobs. Your state department of commerce usually oversees the programs that offer funding for new job creation.

Message Edited by GBIntel on 01-30-2010 03:36 PM