Getting a Business Loan in Alabama

Whether you are in urban Alabama or rural, getting loans for business is not a distant dream anymore. Let’s have a look at some of the prominent financiers of this city who have played a key role in fulfilling many a dreams of aspiring entrepreneurs. HULT PRIVATE

Getting Funds from Small Business Administration:

The Small Business Administration (SBA) provides funds under two types of programs: The SBA 504 CDC loan program and the SBA 7a loan guaranty program.

SBA 504 Loan Program:

This loan program is designed to provide long-term loans for fixed assets. The small businesses can use the funds for acquiring, building, expanding, or renovating property. They can also use it for buying equipment that is life-long.

Under this loan program, the SBA gives 100 per cent guarantee of a debenture, which is sold to the Federal Financing Bank, through a Certified Development Corporation (CDC). It is sold for up to 40 per cent of the costs of fixed asset.

In order to get this loan, you have to submit a proposal to a loan committee of a licensed development corporation. This committee passes your application to the SBA.

The following are the CDCs that help the small businesses in loan application:

o Alabama Community Development Corp.

o Birmingham City Wide Local

o Southern Development Council

o Greater Mobile Development Corporation

SBA 7a Loan Program:

Under this program, loans are provided on long-term period for either working capital of fixed assets. The good thing about these loans is that they require no particular job creation.

SBA authorizes the financial organizations to work as Small Business Investment Companies (SBIC). The SBICs are owned privately and are akin to venture capital companies.

Southern Development Council:

The Southern Development Council works throughout the state. A non-profit organization assists the small businesses to get long-term funds on fixed assets to expand their business in Alabama. The SDC uses the sources of public financing programs as well as Alabama banks to finance the businesses.

U.S. Department of Agriculture-Rural Development:

The U.S. Department of Agriculture (USDA) is a boon for the non-farming community of rural Alabama. The USDA does not provide direct loans, but loan guarantees to the rural entrepreneurs. The program is similar to SBA 7a loan program.

The loans are provided for up to 30 years on fixed assets, 15 years for heavy and light equipment, and 7 years for working capital.

Besides this, the USDA offers low interest loans for developing water infrastructure, health services, public safety services, and other social services for the welfare of the community of Alabama. The interest rates are fixed based on the income of the family.

Thus, Alabama has great opportunities to start business and flourish it. A slew of loan programs are there to finance your dream projects.

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