ABA Family Legal Guide

Forming and Operating a Small Business

Starting a Business

Financing a Business

I've heard that my state offers special loan programs. What are they, and how can I find out more about them?

Many states have special loan or guaranty programs or financial assistance packages and tax relief plans for small businesses. In Texas, for example, low-cost loans are available to childcare providers, small businesses located in enterprise zones, and historically underutilized businesses. There are special provisions designed to promote growth in rural areas, and a statewide loan fund provides opportunities for small businesses across the state. You can get information about such programs from the local SBA office or the office of your equivalent state or local agency.

SBA loans can be used for most business purposes, including purchasing real estate; construction and renovation; acquiring furniture, fixtures, and equipment; acquiring working capital; and purchase of inventory. Franchises are eligible, too. The SBA imposes a limit on the size of the businesses it will help (your start-up should have no trouble meeting that requirement!) and it requires business owners to put some of their own money, including personal assets, into the business.

The SBA has several loan programs.