01 Jul Celebrating America’s Independent Entrepreneurial Spirit
Happy July 4! Independence Day got me thinking again about the 2017 America’s Voice on Small Business Study by America’s Small Business Development Centers (SBDC) and The Center for Generational Kinetics.
They surveyed 1,011 U.S. adults aged 21-65 back in March to conclude that America has enormous untapped entrepreneurial potential.
“Would-be entrepreneurs are everywhere, and with the right circumstances, they are willing to make the leap into the entrepreneurial life right away,” the study finds. “In fact, the national study found that 41% of Americans would quit their job and start a business in the next 6 months if they had the tools and resources they need. Of this group, millennials are the generation most likely to say this (54%).”
The study also finds 33% of Americans say not having money or financing is the #1 reason keeping them from starting their own business. Among millennials not knowing how to run a business was cited as the #1 reason that keeps them from starting a business.
There’s a lot that those of us with years of experience in business can share with younger generations to help them achieve their dream of entrepreneurial independence. As for the money barrier, there is also a lot of help available, particularly when it comes to small business loans, that would-be entrepreneurs need to know about.
Federal, state, and local governments have become more active in business financing in order to facilitate growth in the local tax base, increase employment or accomplish certain other social goals. There are numerous programs available depending on the size of the company, the location of the business and the ownership profile. Small Business Administration (SBA) loans, economic development area incentives and specific bond issues are some examples of this type of financing. Usually the funds are made available through low cost loans with or without government guaranties or certain specific tax incentives. Terms vary by program and individual application.
U.S. Small Business Administration (SBA) loans are probably the best known and most widely accessed of the government programs. These loans are made by local banks and are guaranteed by the SBA. The SBA’s guaranty makes it easier for the bank to make loans on terms it would not otherwise be in a position to make available.
There are several types of loans available ranging from $5,000 to $2,000,000 with varying purposes, including general-purpose term loans, working capital lines of credit, and funding for business acquisitions, commercial mortgages, and equipment. Successful applications should include a well-developed plan. For startups this plan should include personal financial statements and tax returns for the principals as well as how the proceeds will be used. For loans for existing businesses, plans should include a narrative on the company background, the principals, and the outlook as well as company historical financial information and financial forecast, including cash flow with assumptions.
As we celebrate our nation’s 241st birthday, it’s wonderful to know so many Americans are interested in starting their own businesses.
For more information on SBA loans, visit www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs.