As we’ve all heard before, timing is everything and that is especially true in business. Investors know that being one minute too late can sometimes be a costly mistake so careful analysis and timing is key to making money in business.
You may not be an investor in the stock market but if you’re planning to start a business, timing is just as important and your time may just be now.
The Obama Administration is currently debating the Federal budget and one of the many organizations who may see a drastic reduction in funding is the United States Small Business Association. This is the agency that subsidizes loans for future entrepreneurs. By working with certain banks all over the nation, the SBA helps those who couldn’t otherwise qualify for startup funds to gain funding by guaranteeing a portion of the bank’s loan to you.
The original Obama proposal called for a $28 million cut to the SBA’s budget which could severely impact the availability of those subsidized loans but it gets much worse. Just this week, Sam Graves, chairman of the House Committee on Small Business is proposing a cut of $100 million rather than the original $28 million.
According to the SBA’s Raymond Keating, this may be just the beginning of an annual push towards cutting the SBA down to a much smaller organization at a time where small businesses are in desperate need of funding and support.
The SBA does much more than just provide funding. There are smaller scale training and mentor opportunities for business owners around the country as well as national events aimed at strengthening the small business
sector. A cut of just the original size that repeats itself in to coming years would be catastrophic for those programs.
Currently, the SBA has not seen any cuts and will not see them until the new Federal budget is approved and set in to place. This gives the small business owner who is still hoping to start their business in the near term time to gain funding through an SBA program. If you are looking to form a LLC or other type of business, don’t wait until next year. Do it now while there is still funding available.
Before you qualify for a loan, you should be registered with your state. Form a LLC or other type of business before applying for a loan at an SBA sponsored bank.