The main Federal aid program for the reconstruction of non-farm, private sector disaster losses is the Small Business Administration’s (SBA) disaster loans. The only SBA aid that isn’t just for small businesses is the catastrophe loan program.
In this guide, we review What Is The Government Small Business Loan, government loans to start business in nigeria, how to apply for federal government loan, and 5 types of government loans.
What Is The Government Small Business Loan
The Small Company Administration’s (SBA) business lending programs offer several different loan types, but 7(a) loans are the simplest and most popular. Its name is derived from Section 7(a) of the Small Business Act, which grants the agency the authority to lend money to small firms in the United States. The lending program is intended to help for-profit companies that are unable to obtain…
A long-term financing strategy for local economic development is the CDC/504 loan program. The 504 Program offers long-term, fixed-rate financing for substantial fixed assets, such equipment or real estate, to expanding enterprises.
The MicroLoan Program offers extremely modest loans to start-up, recently established, or growing small company concerns as well as certain not-for-profit childcare facilities. In accordance with this program, the SBA provides funding to nonprofit community-based lenders (known as Microlender Intermediaries), who in turn lend money to qualified borrowers in sums not to exceed…
The Military Reserve Economic Injury Disaster Loan program’s (MREIDL) goal is to give money to qualified small businesses so they may pay their regular and required running costs after an essential employee was “called up” to active service in their capacity as a military reservist. They are loans.
The Small Business Investment Company (SBIC) program of the SBA aims to encourage and supplement the flow of long-term loan funds and private equity capital to small businesses, which are needed by small business concerns for the sound financing of their business operations as well as for their growth, expansion, and modernization when such capital is not available in…
The Business & Industrial (B&I) Guaranteed Loan Program’s goals are to enhance, develop, or finance business, industry, and employment in rural regions while also bettering the local economy and environment. This goal is accomplished by strengthening the current private credit system through the assurance of high-caliber loans that will give…
The Northwest Halibut/Sablefish and Alaskan Crab Fisheries are funded through the Fisheries Finance Program (FFP), a direct government loan program that offers long-term financing for the cost of building or reconstructing fishing vessels, fisheries facilities, aquaculture facilities, and individual fishing quotas.
If your company has been harmed and you live in a region that has been declared a disaster, you can be qualified for financial aid from the Small Business Administration (SBA). Any size business and the majority of private nonprofit organizations are eligible to apply to the SBA for a loan to help them recover after a disaster.
The program’s goal is to assist privately funded, commercially reasonable funding for Indian-owned enterprises. The Indian Loan Guaranty, Insurance, and Interest Subsidy Program, which removes the typical impediments to financing for tribes and individual Indians, is managed by the Division of Capital Investment.
government loans to start business in nigeria
Almost everyone starting a new business venture is looking for money to get started. In Nigeria, one of the easiest and cheapest ways to get funds for your business is by applying for small business grants. But unfortunately, there aren’t actually that many Nigerian federal or provincial government grants available for small businesses.
Unlike business loans, grants don’t need to be repaid, so there’s no worry over term length, interest rates, APR, or refinancing. You just need to qualify, and boom—free money. In this post we shared tips about top small business grants in Nigeria organised by government agencies and private individuals.
1. Tony Elumelu Entrepreneurship Programme (TEEP)
The Tony Elumelu Entrepreneurship Programme (TEEP) is a yearly programme launched by one of Nigeria’s business tycoon Mr. Tony Elumelu via Tony Elumelu Foundation (TEF). The program launched in 2015 is aimed at providing 10,000 USD seed funding for entrepreneurs across Africa. Every year, the programme selects 1,000 entrepreneurs across Africa from a pull of over 50,000 applicants.
Every year, the programme selects 1,000 entrepreneurs across Africa from a pull of over 50,000 applicants. Each application is carefully reviewed by business experts in the industry and winners are selected based on market feasibility, clear financial models and a capable team to run the business. Each program cycle begins with an application process opened from January 1st until March 1st.
2. YouWIN Connect Nigeria
YouWiN! Connect is a multimedia programme of the Federal Ministry of Finance. The programme aims to promote entrepreneurship, job creation and wealth via enterprise education for young Nigerians. Nigerian entrepreneurs will enhance their productivity through relevant SME development tools. These ventures are promoted by young Nigerians in target sectors that align with the government’s objective of diversifying the economy and promoting competition and transparency
The first edition, tagged YouWin!1, was initiated to sensitize aspiring entrepreneurial Youth on job creation by funding their business plans. The second edition (YouWin!2) was a Mono-gender version, with Women below the age of 45 years as the target participants. It rewarded over 1200 youths. The third edition (YouWin!3) was Poly-gender, with a record number of awardees (over 2500 Youth).
3. Bank Of Industry (BOI)
The Bank of Industry (BOI) recently launched a youth empowerment program for young and talented entrepreneurs looking to venture into various sectors of Nigeria’s economy. The Youth Entrepreneurship Support (YES) Programme is BOI’s effort at addressing the worrisome phenomenon of youth unemployment in Nigeria by building the capacity of the youths and funding their business ideas.
The YES programme is aimed at equipping young people with the requisite skills and knowledge to be self-employed by starting and managing their own businesses. The YES Programme comprises of;
4. GroFin Fund
GroFin is a pioneering development financier specializing in financing and supporting small and growing businesses (SGBs) across Africa and the Middle East. GroFin combines patient capital and specialized business support to grow emerging market enterprises.
GroFin Focus on Small and Growing Businesses (SGBs) that are grossly underserved by other funds or financiers. Delivers a unique integrated solution for patient risk capital and end-to-end business support to start-up and growing businesses at the SME base. GroFin has fund size of US $100+ Million to funding Nigerian micro, small and medium business (MSMEs) across the country.
5. Diamond Bank BET Programme
The Building Entrepreneurs Today (BET) is a programme designed to support budding entrepreneurs. Every year, 50 entrepreneurs are selected from the pool of the numerous applications received and these entrepreneurs undergo a six (6) months intensive entrepreneurial/business training. At the end of the training period, the Top Five (5) Entrepreneurs are awarded financial grants as seed capital for taking their business to the next level.
The BET Program has witnessed 6 editions with over 25 winners and over 150 business supports. The sixth edition of the program awarded Three Million Naira (N3,000,000) grants to the top 5 finalists to take their businesses to the next level.
6. AYEEN Financial Grants
Africa’s Young Entrepreneurs (A.Y.E) is committed to empowering young entrepreneurs across Africa by creating platforms that facilitate intra-trade on the continent. We are dedicated to developing the next generation of outstanding African entrepreneurs, who will shape the economies and political landscapes of their home countries.
AYEEN is looking to finance small business in various sectors of the economy. Winners would be awarded their respective prizes without any stake for the organizers. Although, the business owners and businesses will be duly monitored for a period of one year. The only criteria for the program are that the applicant must be a Nigerian and the business must be located in any of the 36 states of the country.
7. Lagos State Entrepreneurs Trust Fund (LSETF).
The Lagos State Employment Trust Fund (LSETF), was established by The Lagos State Employment Trust Fund Law 2016 to provide financial support to residents of Lagos State, for job, wealth creation and to tackle unemployment. LSETF serves as an instrument to inspire the creative and innovative energies of all Lagos residents and reduce unemployment across the State. The Fund has the mandate to directly invest ₦25Billion in helping Lagos residents grow and scale their Micro Small and Medium Enterprises (“MSMEs”) or acquire skills to get better jobs.
As the brainchild of Governor Akinwunmi Ambode, the LSETF is committed to financially support a target of 100,000 MSMEs by 2019, creating 300,000 direct and 600,000 indirect jobs as a result. The mission is well underway with a total of 705 beneficiaries who have received support to date.
how to apply for federal government loan
Times are tough for small business, but help is available, from both the government—federal, state or local—and the private sector. It may be in the form of a grant, a loan or a leg up competing in a difficult business environment. Here’s a breakdown to help you sort through what’s available.
Federal stimulus aid
Businesses of all sizes have been negatively impacted by the ongoing COVID-19 pandemic. Some are just getting started, while others have had to rethink their business model. President Biden’s recently enacted coronavirus stimulus bill is designed to help, providing $1.9 trillion in assistance to businesses and individuals. The bill includes aid in the form of tax credits, loans and grants.
Government grants
Begin your search for a grant from the federal government at Grants.gov. This government site offers the most comprehensive database of funds the government is going to give away. There are thousands of grants to apply for, with opportunities for companies from all backgrounds.
Keep in mind that not all assistance flows directly from the federal government to small business. Some funds are distributed to state and local governments and agencies, nonprofit organizations and institutions of higher learning. These entities, in turn, distribute the funds, or use them to provide technical or educational assistance on a local level.
In addition to the programs listed here, be sure to check with your state and local governments and use the resources listed below. When searching through grant and contracting options, note that you may qualify for more than one program.
As illustrated by the following sampling of grants, the assistance available to you from the government will vary, depending on your specific situation.
As you would expect, acceptance of free money from the government comes with a fair amount of paperwork. Applying for a grant can be time-consuming and technical. You want to make sure, therefore, that you are eligible before applying. In addition to the legal and administrative prerequisites, there are ongoing reporting and auditing requirements.
Government contract assistance
The federal government spends billions of dollars on goods and services each year. A lot of that money is spent through a competitive bidding process. Programs have been put in place to assist some small businesses with the process, allowing them a better chance to compete for those federal dollars.
Natural Resource Sales Assistance Program
In addition to the billions of dollars spent purchasing goods and services, the federal government also sells large amounts of natural resources and surplus property. The SBA Natural Resource Sales Assistance Program sets aside a percentage of these goods for bidding by small businesses only. In addition, federal agencies sometimes divide surplus materials into smaller parcels, making it easier for small businesses to purchase. The five categories are:
The program also provides training for small businesses on government sales and leasing.
General small business grants
There are many nonprofit and corporate entities offering grants and other assistance to small businesses. Here are a few such programs that are open to qualifying small businesses in any industry:
Industry-specific and diversity small business grants
Some small business grant programs are confined to a specific entrepreneur demographic or business profile and they often have an application process that is easier to navigate. This is a sample list, so be sure to check with nonprofits and large corporations in your geographic area or industry.
5 types of government loans
Circumstances make it difficult for some people to qualify for conventional mortgages. Government-insured loans exist for this reason – so borrowers who need funding can achieve their homeownership or financial goals.
Government home loans and other federally backed loans are often more affordable, have lower interest rates, and are often easier to qualify for than personal or conventional loans. We’ve created a short guide to everything you need to know about the most popular government loans available.
Take the first step toward the right mortgage.
Apply online for expert recommendations with real interest rates and payments.
What Are Government Loans?
Government loans are insured or backed by the U.S. federal government. There are many types of government home loans as well as government loans for college education, disaster relief, opening a business and supporting veterans. Government-backed mortgages help all types of home buyers purchase their dream home.
How Does A Government-Backed Loan Work?
All government loans are secured, or insured, by the federal government. In some cases, applying for a government loan is as easy as filling out an application online and submitting it to the government. To apply for a student loan, you can simply fill out the Free Application for Federal Student Aid (FAFSAⓇ) online.
In other cases, the government works with approved lenders and only insures the loan, rather than funding it. For instance, the government doesn’t issue VA loans – you must work with a mortgage lender to get this type of loan.
If a borrower defaults on a mortgage issued by a lender, like a private bank, but is secured by the government, the government ends up repaying the lender. Every lender has its own application process for taking out a government loan that you’ll need to follow.
The Different Types Of Federal Government Loans
Government loan programs are available for everything from attending college to buying a home. Your state might also have some unique loan options, but we’ll cover the major federal loan programs below.
Government Housing Loans
A government-backed home loan is considered a non-conforming loan, so it operates outside of the standards of Fannie Mae and Freddie Mac. Additionally, each type of government loan has a unique set of requirements.
The federal government generally doesn’t directly fund housing loans. To get a government mortgage loan, you’ll need to work with an approved bank or an online lending service. Some of the most common government housing loans are FHA loans, VA loans and USDA loans.
FHA Loans
Backed by the Federal Housing Administration, FHA loans are mortgage loans with lower down payment and credit requirements, making them accessible to more people. To qualify for an FHA loan with Rocket Mortgage®, you must have a credit score of at least 580 and a 3.5% down payment.
The downside of an FHA loan is that you’re required to pay an upfront mortgage insurance premium, usually equal to 1.75% of your total loan value, followed by monthly mortgage insurance payments. Depending on the size of your down payment, you may be paying monthly mortgage insurance for the life of your loan.
VA Loans
The U.S. Department of Veterans Affairs backs VA loans, which are only for eligible veterans, active-duty military, National Guard personnel, reservists and qualifying surviving spouses. While the VA has no minimum credit score to qualify, most lenders have certain requirements. Rocket Mortgage will accept scores as low as 580. The approval process will require you to have a valid certificate of eligibility (COE) as proof that you qualify for the loan. Like USDA loans, VA loans typically don’t require any down payment when buying a home. However, both types of loans still require the home buyer to pay closing costs.
The U.S. Department of Veterans Affairs backs VA loans, which are only for eligible veterans, active-duty military, National Guard personnel, reservists and qualifying surviving spouses. While the VA has no minimum credit score to qualify, most lenders have certain requirements. Rocket Mortgage will accept scores as low as 580. The approval process will require you to have a valid certificate of eligibility (COE) as proof that you qualify for the loan.
Like USDA loans, VA loans typically don’t require any down payment when buying a home. However, both types of loans still require the home buyer to pay closing costs.
Take the first step toward the right mortgage.
Apply online for expert recommendations with real interest rates and payments.
USDA Loans
USDA loans are government-backed loans that can help you buy a home in a suburban or rural area. USDA loans don’t require a down payment, but you usually must have a credit score of at least 640 to qualify. The home you want to buy must also be in an eligible rural area; you can check your potential home’s eligibility on the USDA website.
Rocket Mortgage doesn’t offer USDA loans at this time.
Government Loans For Veterans
In addition to home loans, a few other types of VA loans are available for veterans through the Department of Veterans Affairs.
Interest Rate Reduction Refinance Loan (IRRRL)
If you have a VA home loan and would like to lower your monthly payments, an IRRRL, also called a VA Streamline Refinance, can help you refinance with a lower rate. Depending on your loan’s terms, an IRRRL can give you a lower interest rate or a lower monthly payment.
If you’re switching from a different lender to refinance with Rocket Mortgage, you’ll need a minimum credit score of 600 for an IRRRL.