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Some small businesses are further financed through credit card debt - usually a poor choice, given that the interest rate on credit cards is often several times the rate that would be paid on a line of credit or bank loan. Many owners seek a bank loan in the name of their business, however banks will usually insist on a personal guarantee by the business owner. In the United States, the
Small Business Administration (SBA) runs several loan programs that may
help a small business secure loans. In these programs, the SBA guarantees a
portion of the loan to the issuing bank and thus relieves the bank of some of
the risk of extending the loan to a small business. |