The transportation industry covers small and big business opportunities without losing its own unique niche identity. Financing within the transportation industry is just one among a myriad of challenging actions. Another layer of difficulty surrounds financing due to the small business aspect of many transportation industry members. The Small Business Association has a number of different options for financing a small business, even in transportation. Here is a sampling of the newer options available to the struggling transportation business owner.
1. Commercial Mortgage Refinancing
Small business financing can ease the difficulties of tough economic times. Growth through financing pushes a business through an economic downturn into the future. Temporary Commercial Mortgage refinancing is currently available through the SBA through 2012. This program came to life under the Small Business Jobs Act with hopes to breathe life into many struggling small businesses who own a property that has declined in value. The loan is based on the owner putting in 10% equity, mortgage lender 50% and the SBA 40%.
2. Expanding Options for Small Companies
Small businesses in underserved communities often do not receive business loans. The SBA added the Small Loan Advantage program in early 2011 with hopes to increase entrepreneurship by allowing more lower-dollar loans. Loans of $250,000 or less should facilitate some economic improvement for lower income communities. Additionally, Community Advantage will reward not-for-profit companies who are involved with community development.
3. Goodwill Financing Receives Higher Caps
SBA goodwill financing was limited in 2009 by a $250,000 or 50% of loan amount cap. This process helps companies buy intangible assets like a well-known name or client list. Most transportation and trucking business value rests on tangible assets much could still be intangible. Like so many other things within the transportation industry, lenders may misunderstand the importance of goodwill financing. Due to unrest, the cap has been lifted to $500,000. This financing option allows anyone to think about purchasing into the transportation industry.
4. The 7(a) Loan
Many SBA programs come and go, however there is one steady option: the 7(a) loan. This is the most general and flexible plan of all the SBA financing options sustained by a wide-range of banks and lending institutions. Existing companies can also benefit from the micro-loan programs present with in the 7(a) loan. Purchasing the necessities like inventory, machinery and equipment are all possible within the micro loan program.
Entering the transportation industry during the coming 2012 year may seem daunting and uncertain. Take some advice from a few professionals who have been around the block. The Tenney Group, successful transportation business brokers, works closely with first time business owners or life long moguls for the better of a company. They can help you explore all the financing options available for your unique transportation business needs.