States with Small Business Start Up Revolving Loans

What is a Revolving Loan?

For individuals interested in starting up new or improving eisting businesses, a revolving loan fund can be very beneficial. These loans are specifically deigned for those planning or operating small businesses and who lack credit history and access to loans from commercial banks. State-funded loans such as these are considered "revolving" because as payments are made from borrowers, that money in turn becomes available for new borrowers.

Although it might seem difficult at first, there are many organizations and resources in place to assist small businesses with start-up and improvement financing such as revolving loans.

U.S. Small Business Administration

The Small Business Administration ("SBA") plays an important role in small-business financing. This agency, which is part of the Executive Branch of the Federal Government, is charged with administering loan programs. Guidelines are set by the SBA for lending institutions and agencies, who then provide funds to business owners.

The loans are guaranteed by the SBA against default on the part of the borrower/business owner. Approval for a SBA loan is relatively quick (within 36 hours) and the paperwork is handled by the lending institution.

SBA Express

Business owners can borrow up to $350,000.00 under the SBA Express Program. For its part, the SBA guarantees up to 50% of the amount borrowed. A revolving loan, in the form of a line of credit, can be arranged for a period of up to seven years. No collateral is required for loans of up to $25,000.00.

Patriot Express Loan Initiative

The Patriot Express Loan Initiative is offered to businesses where 51% or more of the ownership is made up of a:

• Military Veteran
• Member of the National Guard or a Reservist
• Serviceman/Woman Discharged from the Military Within the Previous 12 Months
• Active Duty Personnel Due to Retire Within the Next Two Years
• Spouse of any of the Above
• Surviving Spouse of a Member of the Military who Died due to Disability Stemming from Military Service

Under this Initiative, funds of up to $500,000 may be borrowed, with the SBA guaranteeing between 75-85% of the loan. Revolving loans (lines of credit) may be taken out for up to seven years.

Community Express

This program is available to residents of low and moderate-income areas, as well as new business owners. It provides funding of up to $250,000.00 for qualified applicants. As with the other SBA Programs, lines of credit with terms of up to seven years are available.

Microloan Program

If a business owner is looking for a small amount of startup money, the Microloan Program may be able to help. Up to $35,000.00 may be borrowed by startup or newly-established businesses. The average amount borrowed is less than $15,000.00. The interest rate charged on the loan is determined by the lender, but varies at between eight and 13 percent per annum.

How to Find States with Small Business Start Up Revolving Loans

Business Reference Services from the Library of Congress

The small business development agency for your state is a great source of information about how to get financing for a business. Visit the Library of Congress website for a comprehensive directory.

The directory provides the name, address, phone/fax numbers, and a contact name for the business development agency for each state. A link to each agency's website and an e-mail address are also provided.

For a new business owner, finding sources of financing can be challenging. Fortunately, help is available. Check out the list of states with small business start up revolving loans to find out how to access the programs offered by the SBA.