US Small Business Administration (SBA) loan is the most common loan program for small businesses. They offer the the “7(a)” loan which is the easiest loan to get. The loan does not actually come from the SBA, it comes from a lender and a portion of it is guaranteed. Because lenders can lower its standards, which means the small businesses who do not have good credit histories can qualify. Lenders observe to potential business earnings, collateral and resource management. According to the SBA to qualify a small business must have these characteristics. The must me in the Unites States, demonstrate a need for a loan, no prior U.S debt, meet the SBA definition of a small business and operate for profit. There is no minimum for the size of the loan but the maximum is five million dollars. M...
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...t. Using their connection could have amazing benefits. Unfortunately, the owner does lose some control. Because the VC are putting their money into a business, they want to be very involved. The size of the financing loan determines their level of involvement in a company.
Private placements in stocks are very customizable and flexible when it comes to raising money. These investors are more patient and less aggressive than venture capitalists because they wait a longer time before asking for their investments back. This route is also faster. The downside, is like many other financing options, it requires owners to give up some control. Private investors can also have access to all of the financial records. On the upside, it is less stress on the owner because of help from investors and the fact that there isn’t any repayments involved unlike a commercial loan.
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