There are a lot of business loans available today. With a well written business plan and your enthusiasm, you have all the pieces needed to get the funds you need to start a business. Don't forget to check your own state to see what loans they have available. The state programs listed here, (and some of the federal ones) are Alaska Specific.

Federal programs l State programs l Venture Capital l Helpful links

Federal programs

Bureau of Indian Affairs
Branch of Credit and Finance
P.O. Box 25520
Juneau, AK 99802-5520
(907) 586-7103 Fax (907) 586-7037

The Department of Interior, Bureau of Indian Affairs is a federal agency which administers loan programs under the Indian Finance Act. The BIA offers the following program:

Loan Guarantee Program (LG)

The BIA offers either 80% or 90% guarantees on loans made by a commercial bank to an Alaska Native, American Indian, tribe, or ANCSA Corporation. The ceiling limit for an individual is $500,000 and $5.5 million for tribes and ANCSA Corporations. Based upon need, interest subsidies are available. Loan limits are subject to the availability of appropriations. For more information on the program, contact Charles Katasse, Area Credit Officer, at (907) 586-7103 or Richard See, Financial Analyst, at 586-7183. Toll free (800) 645-8397 (ext. 4).

USDA/Rural Development

U.S. Department of Agriculture
Rural Development (RD) is a rural credit agency for USDA. RD offers loans, grants and loan guarantee programs to support rural development. These programs include:

Business and Industry Loan Guarantees (B&I)

Rural Business Services (RBS) can provide a loan guarantee of up to $10 million for businesses which are located in rural areas or cities under 50,000 population. Applicants may be individuals, corporations, or nonprofit corporations. All business purposes are eligible except hotels, recreation or tourism.

Rural Business Enterprise Grants (RBEG)

This grant program is used to support the development of small or emerging private business enterprise in rural areas. Eligible applicants are nonprofit corporations, municipalities or federally recognized Indian groups. Grant funds are limited but their use is quite flexible; including land purchase, building construction, equipment, technical assistance or small revolving funds.

Small Business Administration (SBA)

Small Business Administration
The small business administration has branch offices in each state. If there is one close to you, you might consider going to the office and talking to them about which loans would be the best for your particular business. If not, their site on the internet is very helpful. It is found at http://www.sba.gov

The Small Business Administration has several financial assistance programs:

Guaranty Loans

These loans, made by banks, may take several forms. All of SBA's financial assistance programs are under this program. The loan request, initiated by you to your local lender, is disbursed by the lender. Your payments are made to the lender receiving SBA's guaranty.

To obtain SBA's guarantee, the lender issues the SBA application. SBA may guaranty up to 80% of loans up to $100,000 or up to 75% of loans up to $1,000,000.

Specialized Loans

Specialized loans include International Trade Loan Program, Export Loan Program, Seasonal Line of Credit Program, Contract Loan Program and Certified Development Company.

Projects Eligible for Funding

Funding may be used to finance working capital needs, inventory purchases, machinery and equipment, leasehold improvements, business real estate, and in some circumstances, debt consolidation.

Funding Criteria

Applicants must meet SBA standards for small businesses. SBA uses much of the same credit criteria as banks, employing such creditworthiness tests as cash flow, management ability and adequate owner investment.

State Loans

Each state has different loans available for new businesses. To find out what your state has to offer, the qualifications, and the application forms. Go to their site. It is www.state.(your states 2 letter abbreviation).us Alaska's site is located at http:\\state.ak.us

Venture capital is money private investors supply to businesses with the expectation that their money will return to them with a large profit. Venture capitalists are in the business of investing money to make money, and they expect generally equity positions in the companies they finance. Most venture capitalists have definite preferences concerning the location, type and size of companies in which they are willing to invest. Most entrepreneurs and business persons are really not very familiar with the business of venture capital. Some tend to believe that venture capital is easily available for all sorts of businesses. It is not.

Many believe that venture capital is overly expensive, or that a company will have to give up too much control of the business. It is certainly true that venture capital is expensive and that venture capitalists will expect a say in the operation of the enterprise. However, it is important to remember that the terms and conditions of the investment are negotiable, to a point, and more important, the entrepreneur needs to balance the costs of venture capital against the cost of foregoing the business opportunities or market share that can be gained from moving quickly and gaining an adequate scale of operation.

Venture capital firms are interested in investing in businesses with especially high growth potential. The industry as a whole expects to generate an annual return on investment of approximately 30 percent, and that average figure includes a substantial number of total failures. Venture capitalists look for between three and ten times return on investment over a four to seven year investment horizon and even more with especially risky companies. Venture capitalists are usually interested in investments of $250,000 and above. A venture capitalist may receive hundreds of proposals annually and reject the majority of them out of hand; perhaps 1 or 2 percent will even be seriously considered.

If the decision is made to invest, the venture capitalist can be expected to take an active interest in the operation of the business. Understanding this relationship is a necessary first step for the entrepreneur, as a good relationship between the entrepreneur and the venture capitalist is vital. This partnership will allow a developing business to achieve its objectives faster and more efficiently which, in today's dynamic and highly competitive marketplace, may be a critical factor in the survival and success of new business development.

 

Some links that may be of help

Small business administration

Department of commerce