Small Business Loan Sources:
A little creativity can get you the money you need
by Lisa Phillips
March 2008
Small business owners may
have to seek alternative small
business loan sources.
Being creative and thinking
outside the box may get you
the financing your small
business needs. Below are
several ideas to get you
started in the right direction:
Borrow from Your Savings
Banks and other lenders typically expect small business owners to
have invested at least 30% of their own capital in initial start-up
financing. Tapping into your savings is probably the best method of
financing your business. You can loan the business your money and
pay yourself back down the road. Using your own funds is probably
the best method of financing.

Angel Investor
Angel investors look to invest in businesses that return a higher
profit than a traditional investment.  Many angel investors are
successful entrepreneurs who want to help other entrepreneurs get
their business off the ground. Angel investors look for businesses
that can compete in an industry and that have experienced some
prior success.
More Resources
Business Opportunities
Home-based business
opportunities. Earn extra income
from your computer.

Bad Credit Business Loans
Find alternative funding sources if
you have bad credit.

Micro Business Loans
Do you need just a little cash to
grow your business try a microloan
from the SBA.

Business Loan Sources
A little creativity and al lot of
determination can get you the
money you need.
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in 10 Steps
Banks often neglect new and small businesses when it comes to
financing and because of the recent credit crunch many banks have
tightened their underwriting standards. It has become very difficult
for even established business owners to get small business loans.
Angel investors usually come at the stage of the business where the business already has some
funding but needs a significant amount more to take the business to the next level. Funding
typically ranges from $150,000 to over $1millon. Financing from an angel investor is going to be
expensive. The costs may range from 10 to 50 percent of a company’s equity. The angel investor
may even charge a monthly retainer in the form of management fees.

A good source for a small business loan is the SBA. SBA loans do not come directly from the
Small Business Administration. The SBA assists in obtaining a loan by guaranteeing the small
business loan you get from the bank. The SBA is not a direct lender. Banks are willing to fund the
business because the SBA says it back the loan in case of default. The SBA guarantees 80% of
the loan. There are different types of SBA loan programs available.

Community Express Loans
Community Express Loan is administered through the SBA loan program and is available at
selected lenders. This loan program is for pre-designated geographic areas serving mostly low
and moderate income individuals and new small businesses. The program also includes technical
and management assistance, which is designed to help increase the chances of success for the
small business.

Micro Business Loans
This loan program provides small loans to start-up, home-based or micro-businesses. It was
designed to meet the needs of entrepreneurs who need financing assistance to start or expand
their business. You can borrow as little as $1,000 up to $35,000. Loans must be repaid within six
years. The SBA provides low-cost loans and grants to non-profit intermediaries such as
community economic development centers which redistribute the funds to qualified small
businesses. General guidelines are established by the intermediary agency.
More on Microloans

Patriot Express Loan
The SBA has launched a new loan program for military service members, veterans and their
spouses called the Patriot Express Loan Initiative. The Patriot Express Loan builds on the more
than $1 billion in loans the SBA guarantees annually for veteran-owned businesses. The loan
can be used to establish or expand a small business and the maximum loan amount is $500,000.
Read More on the Patriot Express Loan.
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