Government loans by the Small Business Administration are one of the most valuable
sources of
startup capital
for small business entrepreneurs.

Since its inception in 1953, the SBA has provided
startup capital
for several thousand
small businesses. In fact, SBA has financed more than 219,000 business owners with
loans of more than $ 45 billion. The role of the SBA in providing startup capital
to small companies has increased in the last decade. In the past 10 years, SBA has
startup capital
for almost 435,000 small businesses with more than $94.6
billion in loans. SBA is probably a leading source of funding for small businesses.
However, before approaching the SBA for startup capital, entrepreneurs need to estimate
how much they need for their business. Every business is different, and has its
own specific cash needs at different stages of development. Some businesses can
be started on a shoestring budget, while others may require considerable

in inventory or equipment. It is vitally important for entrepreneurs to estimate
how much startup capital they need.

A realistic budget for startup capital should include those things that are necessary
to start that business. These essential
startup capital
expenses can be divided
into two separate categories: fixed and variable. Fixed expenses include rent, utilities,
administrative costs, and insurance costs. Variable expenses include inventory,
shipping and packaging costs, sales commissions, and other costs associated with
the direct sale of a product or service.

The most effective way to calculate the expense for startup capital is by maintaining
a worksheet that lists all the various categories of costs. The advantage of applying
to the SBA for
startup capital
is that it is more flexible than other loans offered
by traditional lending institutions such as banks.

applying to the SBA for startup capital need to meet some minimum
criteria. Business owners will need to furnish details of business profile, loan
request amount, collateral details, business financial statements and personal financial

Most analysts suggest that
should get pre-qualified for the startup
capital. Pre qualified financing uses intermediary organizations to assist prospective
borrowers in developing viable loan application packages and securing loans.

The SBA is one of the most promising sources of startup capital for small business
entrepreneurs. Business owners should think of it before venture capitalists and
angel investors when seeking startup capital.