What Snowe wants most is a Small Business Administration (SBA) seat back in the Cabinet – one that President George W. Bush did not elect, and one she and others have sorely missed. Furthermore, elevating the agency’s incoming administrator, she said, “will send a clear signal that small business will drive our nation out of this recession,” as she wrote in a letter addressed to Obama.

At the same time, Snowe has been pushing legislation in hopes of providing more immediate relief. Along with lost lending activity, her ten-step Main Street Economic Recovery Act seeks to recover Small Business Administration funding that has suffered great losses. Over the past eight years, the administration’s budget shrunk by 27 percent – the largest cut of any federal agency.

“When you consider that the SBA budget represents only about 2/100ths of a percent of the total federal budget – yet at the same time small businesses are creating about three-fourths of all new jobs – there is no question that adequately funding the Agency’s small business programs is an investment in America’s economic future,” she said to BusinessWeek.

Traditionally the Small Business Administration’s most popular loan program, 7(a), aims to be “as broad as possible” for start-ups and existing small businesses, according to its official Web site. But over the past year, lending through that program has dropped by 55 percent, as 75 percent of banks reported to the Federal Reserve that they tightened their lending practices.

To stimulate lending activity again, Snowe’s act aims to make Small Business Administration’s loaning processes more efficient. Among other actions, she wants to offer training programs for new lenders, temporarily reduce lending fees by $510 million, and increase the maximum financing that can be secured through one loan – from $2 million to $3 million, according to a press release.

And, with the credit crunch in mind, Snowe also wants to allow borrowers to refinance their 7(a) loans if more favorable terms from another lender are available. Lately, as the Wall Street Journal reported last month, banks and lenders have not been able to re-sell Small Business Administration loans, as their costs have been rising too high to appeal to buyers.

“During these challenging economic times, it is imperative that the SBA … is part of every conversation President-elect Obama has about restoring confidence in the economy,” she said in a statement.

Working much the same way that a more traditional business loan works, the big difference with a peer-to-peer loan is that it’s funded by private individuals, which can include friends and family, and managed by larger companies. These include Prosper, Virgin Money, Lending Club, Zopa and GlobeFunder amongst others. The business owner gets the loan they need, and it’s carried out like a normal business transaction, with all the relevant protection and repayment options.

While it’s not quite as prevalent as a traditional business loan yet, the amount of business owners and entrepreneurs now using the peer-to-peer option is growing considerably. For example, both Virgin Money and Lending Club provide a peer-to-peer business loan to as much as 20% of their overall borrowers. The same goes for Prosper, with the average peer-to-peer loan sitting at between $9,000 to $21,000.

The reason for the increase in the amount of business owners looking to the peer-to-peer business loan option is that the more traditional lenders are tightening their belts. Due to poor stock markets and higher defaulters, banks and financial institutes are turning down borrowers whose credit is good, since the risk factor is too great. Without the peer-to-peer option, this would result in many more businesses falling by the wayside, which would simply add to the low confidence in the business markets.

Another reason for the increase in peer-to-peer loans is that it allows people who may not have a business “head” to become involved in a business they’re interested in. Although not a partner as such, a lender of a peer-to-peer loan feels like they are contributing to that business’s success, and this leads to more opportunities for borrowers to find the money they need.

If you’re considering a peer-to-peer loan for your business, or even if you’re considering becoming a lender yourself at a later date, make sure that you carry out a few simple checks, to ensure that you don’t end up out-of-pocket later on. These checks include asking for references or credential checks from interested parties. You should also check the company out at the Better Business Bureau, which can advise of any complaints raised about the company in question. Even a simple search engine check will bring up any negative news about any peer-to-peer lender, and will potentially save your business thousands.

If your personal credit score is less than 640, then you will most definitely want to separate your personal credit from your business credit. All you need to do is obtain a tax ID number or Employee Identification Number (EIN), rather than using your social security number.

Building your credit history

One you have a clean starting point for your business, it’s time to start building a loan-worthy credit score. You may want to start by getting a business credit card; however, you must be certain that you can pay off the balance in full, each and every month. Also, begin to build credit lines with your vendors and suppliers. The more you can show banks and lending institutions that you have a history of making payments on time, the better.

Obtaining a business loan

Once you’ve successfully implemented the above techniques, you’ll be well on your way to getting the larger loan you desire. However, building a stellar credit score takes time and, as with many small businesses, you may not want to wait years before the bank is ready to trust your business as a borrower. However, there are several ways you can get your business a loan, based just on the small credit history your business has. First, you can work your way up to that large loan with the "loan ladder" approach. That means you get a smaller loan, pay it off quickly and then get approved for a larger loan, etc. It may take several steps, but eventually you’ll prove to the bank or lending company that you are ready for that mega-size loan.

There are also two options that help to share the risk between lender and borrower. The first option is to get a collateral loan. This means that you are putting your assets as security against the loan. This can be expensive office equipment, land, office building, home, etc. This makes getting a business loan easier but, of course, it also increases the risk to you. The second option is to get someone with good credit to co-sign your business loan. This could be a family member, friend or business associate. Doing this will increase both your chances of getting a loan and the loan amount itself. Something to think about with this option, however, is the personal repercussions you may face if you end up defaulting on the loan.

Another option is a bad credit business loan. While this is a high interest loan with hefty penalties for late payments, it is at least an option for you when nothing else is available. Plus, if you can pay the loan off in good standing, you’ll be one step closer to getting that "perfect" business loan.

So you see, even though you may have made some mistakes in the past with your personal finances, you can start fresh with your business credit. However, it’s important that you learned a few things along the way and don’t fall into the same pattern once again.