Government Business Loans: 4 Agencies to Consider

Government business loans provide entrepreneurs with good financing opportunities. These loans are designed to help develop and spur the country’s economy. With that in mind, government loans are granted not to earn huge profits for the government, but to help people who want to establish or grow their own businesses. You can expect that government loans generally have lower interest rates and longer payment terms. The best part is that there are several agencies that offer this type of government loans.

Here are four government agencies that can provide you with much needed business loans.

US Small Business Administration
This is the main agency that facilitates government business loans to various American enterprises. It helps entrepreneurs in starting or expanding their businesses. The Small Business Administration, or SBA, works with private institutions to provide affordable low–interest loans to people who are having a difficult time applying for traditional bank loans. There are many loan programs under this agency that can meet the requirements of most types of businesses.

If you plan to avail of SBA loans, all you have to do is go to any participating banks or lenders in your area. If approved, you are actually taking out a commercial loan, except that the agency has guaranteed the loan on your behalf. Also, the terms and conditions of the loans will be in accordance with SBA programs.  

US Department of Agriculture (USDA)
If you plan to put up a business in a rural area, you can apply for government business loans from the Department of Agriculture. This agency offers Business and Industry Guaranteed Loan Program that works like an SBA loan. The department will guarantee up to 80% of your loan, which will be released by participating commercial banks and lenders. Typically, people who avail of USDA loans use the proceeds to buy farm machinery and equipment, as business capital, and even to refinance existing debts.

The Export-Import Bank of the United States (Ex-Im Bank)

This is the official agency of the US government that takes care of export credit. Its main function is to help in financing US businesses that export goods and services to other parts of the world. The main borrowers of Ex-Im Bank are exporters. The agency helps export business to get loans which can be used as working capital. If you avail of the agency’s loan program, you can obtain funding to develop your overseas sales and become more competitive in the global market.

Overseas Private Investment Corporation (OPIC)
This agency drives private American investors to invest in some 150 countries worldwide. OPIC spurs economic growth both in the US and abroad. It offers direct loans and guarantees for US businesses or projects abroad where traditional types of commercial loans are unavailable or disadvantageous. The agency provides Small and Medium Enterprise Financing for enterprises with less than $250 million in revenues. For bigger businesses with over $250 million in yearly revenues, it offers the Structured Financing. There is also a Small Business Center that gives out loans to businesses with less than $35 million in revenues. This program under the OPIC offers a streamlined approach in approving small government business loans.