Money is always involved whenever people want to start a business or buy a house and live the American dream. Good thing the U.S. government developed several programs for business owners and homebuyers.
Main Financing Programs
The U.S. Government provides many Financing Programs to help businesses grow by offering Loans. Three main financing programs are available to small businesses and large corporations: SBA Loans, Guaranteed Loans, and United States Department of Agriculture loans.
SBA Loan
SBA loans are offered through the Small Business Administration and provide different types of loans based on the needs of the business. The SBA 7(a) loan is the most common loan, which can be used for various purposes such as buying or expanding a business, working capital, inventory, or refinancing debt. The SBA also offers a loan for companies in start-up mode, the 504 loans, which are used to purchase commercial real estate or machinery and equipment.
Guaranteed Loan Program
The Guaranteed Loan Program is offered through the U.S. Department of Agriculture and guarantees loans up to $500,000 for businesses that are unable to get funding through traditional means. The loans can be used for machinery, equipment, vehicles, or real estate, and the borrower only pays the guarantee fee, which is 1% of the principal loan amount.
USDA Loan
The United States Department of Agriculture (USDA) also offers direct loans to businesses that are located in rural areas that might not get support from other banks because of their location. The USDA provides loans as low as $5,000 and up to $500,000 for businesses located in a rural area or town with a population of fewer than 50,000 people.
Other Loan Programs include the SBA Disaster Loans, Coal Leasing Moratorium Payment Program, and 504 Certified Development Company loans.
SBA Disaster Loan
SBA Disaster Loans are offered through the Small Business Administration to help businesses that have been affected by a natural disaster such as a flood or hurricane. There are two kinds of SBA Disaster Loans, Economic Injury Disaster Loan (EIDL) which provides loans up to $2 million for businesses that have lost income or can’t meet financial obligations due to a presidentially declared disaster, and the Physical Disaster Loans (PDL), which are offered through state governments and offer loans of up to $2 million.
Coal Leasing Moratorium Payment Program
The Coal Leasing Moratorium Payment Program is offered through the U.S. Department of the Interior and provides payments to companies in the coal industry that have been affected by the Obama Administration’s moratorium on new federal coal leases. The program is designed to help companies that have lost income due to the moratorium, and it is available to both small and large businesses.
504 Certified Development Company Loan
The 504 Certified Development Company (CDC) loans are offered through the U.S. Department of Agriculture and provide small businesses with low-interest-rate loans for commercial real estate projects, including new construction, buyouts, acquisitions, conversions, rental property improvements, refinances of existing properties, or equipment purchases for agricultural lands.
Home Loan Programs
The U.S. Department of Housing and Urban Development (HUD) offers home loan programs for current homeowners, new home buyers, people with low incomes, seniors, veterans, members of the military, and first-time homebuyers. The FHA Loan program and the Section 184 Native American Home Loan Guarantee program are the two main programs.
FHA Loan
The FHA loan program is offered through HUD and is a mortgage insurance program that helps people buy homes with low down payments and offers flexible credit requirements. The Section 184 Native American Home Loan Guarantee program is also offered through HUD and is designed to help Native Americans purchase homes on tribal lands.
Other home loan programs include the Rural Housing Loan program, the Veterans Affairs Home Loan Guarantee Program, and the HUD Good Neighbor Next Door Program.
Rural Housing Loan
The Rural Housing Loan program is offered through the U.S. Department of Agriculture and provides low-interest loans to rural homeowners for housing repairs, improvements, or new construction. The Veterans Affairs Home Loan Guarantee program is offered through the U.S. Department of Veteran Affairs and provides a loan guaranty up to $417,000 for veterans who qualify for a VA-backed home loan; it also provides those who qualify with down payment and closing cost assistance as well as access to interest rate discounts and other favorable terms.
HUD Good Neighbor Next Door Program
The HUD Good Neighbor Next Door Program is offered through HUD and provides homes for sale to eligible law enforcement officers, firefighters, emergency medical technicians, and teachers at a 50% discount.
The U.S. government is eager to help entrepreneurs and common citizens in their journey toward the achievement of their dreams. Whether you need funds for your business or you want an affordable housing loan, there is a program designed for you.