In U.S., there is a Small Business Administration (SBA). It is an independent agency of the federal government. Its programs include education and direct and indirect programs to help small businesses obtain financing. Besides that, the SBA also offers some direct loans as well as loan guarantees that allow other lenders to receive backing on some or all of the money they lend to businesses. The SBA also licenses private lenders to participate in the small business investment company (SBIC) program, a low-level form of venture capital. Actually there are many programs of SBA. And some of them are 7 (a) loan guarantee, Certified development company (CDC) 504 loans, 7 (m) microloans, and Surety bond guarantee (SBG). In 7 (a) loan guarantee, the SBA’s basic program offers guarantees to lenders to entice them to make loans to small businesses that might not otherwise qualify for a loan. Loans are extended for up to 10 years for working capital and for longer periods to purchase equipment and other fixed assets.
Meanwhile, in Certified Development Company (CDC) 504 loans, private lenders can offer loans to acquire real estate or equipment for expansion or modernization. The loans are funded by an SBA-guaranteed note. In the term of Surety bond guarantee (SBG), SBA offers completion and contract bonds for small and minority contractors. If a company is unable to fulfill a contract, the surety bond is supposed to pay for completion of the project by others. And the last, in 7 (m) microloans, SBA will gives small loans to small businesses for working capital, equipment, or inventory. In here, the SBA lends money or guarantees loans to third parties that offer funds to enterprises.