Business Funding

SBA-guaranteed loans, traditional bank loans, business credit cards, small business grants, crowdfunding, and investment capital from angel investors.

Frequently asked questions
What is Government Financing?
  • Direct Loans: The government can provide loans directly to individuals and businesses for specific purposes, such as federal student loans for education or SBA loans for small businesses. 
  • Loan Guarantees: Instead of directly lending money, the government can guarantee loans made by private lenders, like banks. This reduces the risk for the bank, making them more willing to lend and potentially offering more favorable terms. 
  • Examples: Common government-backed programs include:SBA Loans: For small businesses, covering expenses like real estate, working capital, and debt refinancing. FHA Loans: Government-insured mortgages that help homebuyers secure loans with lower down payments. Federal Student Loans: Funding for college, career school, and graduate school. 
  • Indirect Support: The Community Development Financial Institutions (CDFI) Fund provides federal investment to mission-driven financial institutions, enabling them to inject new capital into economically disadvantaged communities by working with private sector capital. 
What is Bank Financing?
  • Private Lenders: Banks are typically private entities that provide loans to businesses and individuals. 
  • Variety of Loans: Banks offer various types of loans, including commercial and industrial loans, owner-occupied nonfarm, nonresidential real estate loans, and more. 
  • Interaction with Government Programs: Banks often participate in government programs, such as offering government-backed loans, which benefit both the bank (via reduced risk) and the borrower (via more accessible financing). 
How does Government and Bank Financing work together?
  • Risk Reduction: Government loan guarantees reduce the risk for banks, encouraging them to make loans to sectors or individuals who might not otherwise qualify. 
  • Community Development: Through initiatives like the CDFI Fund, governments foster collaboration between public and private sectors, directing capital to communities in need via mission-driven banks and other financial institutions. 
  • Market Stability: The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance and oversees banks, working to maintain stability and public confidence in the financial system, a key goal of both government and bank operations.