Last March, the Small Business Administration (SBA) assigned a limit on the agreement it was offering on “goodwill” financing, limiting them to $250,000 or 50% of the total amount of SBA loan, whichever amount was lower. For those small businesses that do not have the hierarchical structure in place to implement formal corporate governance plans, it is recommended that regular self assessment of the company will be the starting place for accountability, to enhance performance, grow the company and be a greater contributing force in the economy.
These lender programs were designed to provide better response to borrowers; they accomplish this goal by placing additional responsibilities on the lenders for analysis, structuring, approval, servicing and liquidation of loans, within The Small Business Administration’s guidelines.
One of the most significant ways start-up business owners can benefit from these loans is that they are eligible for the credits even with poor credit records, including bankruptcy, IVA, insolvency etc., which might be a problem if you try to secure credits from banks and other conventional lending sources.
Corporate governance simply refers to the set of internal policies, rules, and procedures that a company follows on a regular basis to ensure that it operates in a fair, equitable, and appropriate manner for the benefit of the company, its management and its shareholders.
Although this is true that the SBA borrowings are there for the help of small businesses, it is also true that you have to have a good credit history to get approval from SBA If there were some problems with the credit report in the past, then you have to make clear that all these problems have already been sorted out.