SBA Loan Programs

[The Easy to Follow Guide]

First, the SBA is not a loan. It is a government guaranteed program.

The U.S. Small Business Administration offers many loan programs that can assist in a variety of business needs. There are many different types of costs and requirements when opening a business, expanding a business or just trying to keep a business running smoothly. SBA can assist businesses with an array of different loan options.

7(a) General Loan Program

The 7(a) Loan Program is designed to financially assist businesses with special requirements such as operating in rural areas, employee trusts or exporting to foreign countries. The 7(a) loan proceeds may be used for a variety of business needs including the acquisition, expansion or operation of an existing business or to establish a new business. There are three specific types of 7(a) loan programs. Within this program the borrow will pay an additional 5% if the loan is for a start-up, as well as 5% if the the loan is for a specialty purpose.

Special Purpose Loan Program

The Special Purpose Loan Program offers several loan options to provide financial assistance to Employee Stock Ownership Plans, aid for businesses that have been affected by NAFTA or to help implement pollution control.
The CAPline program is designed to help small businesses with things like seasonal working capital needs and meeting short term and cyclic work needs.
The Employee Trust Program is designed to financially assist with Employee Stock Ownership Plans.
The Community Adjustment and Investment Program (CAIP) is designed to assist U.S. companies that have been negatively affected by the North American Free Trade Agreement.
The Pollution Control Program is designed to aid businesses reducing their environmental impact. This loan program is currently unavailable due to lack of appropriations.

Export Loan Program

The Export Loan Program is provided to assist U.S. exporters. This program is designed specifically to help exporters expand or develop their businesses. Loan funds can be used to enhance a company’s export development. Any business that can demostrate that loan funds will aid in export activity and has been in operation for at least twelve months is eligible for the Export Loan Program.

The Small/Rural Lender Advantage (S/RLA)

The Small/Rural Lender Advantage is designed to suit the needs of small community or rural based lenders by making the loan application process and procedures simpler and more convenient. It is meant to promote economic development for small communities especially those with challenges like high unemployment and economic dislocation.

Microloan Programs

Microloan Programs offer small, short term loans to small businesses and to specific non-for-profit child care centers. These loans can be used for needs such as inventory and supplies, machinery and equipment, furniture and fixtures and for working capital. Each lender is required to provide businesses with technical assistance and training to borrowers. Borrowers may be required to undergo specific training or planning requirements before being approved for microloan financing. The average microloan is 13,000, but the maximum a loan can be taken out for is 50,000. It can not be used for existing debt or real estate.

CDC/504 Loan Program

The CDC/504 Loan Program is a powerful economic loan program that can assist small businesses with another avenue for businesses financing while encouraging job creation and business growth. This loan program provides small businesses with long term fixed rate financing to acquire fixed assets for modernization and expansion. 504 loans are available through Certified Development Companies (CDC) CDCs are nonprofit corporations that promote economic development within communities. 504 loans can be for up to 1,000,000 and can be used for soft costs, land, building purchases, renovations or to purchase furniture and equipment. 504 loans are beneficial to businesses because they offer 90 percent financing, fixed rates and no balloon payments (only on the 40% by the CDC at a fixed rate, slightly above prime).

Program Benefits
  • No collateral required
  • Unrestricted use of funds
  • No restrictions on business types
  • No upfront fees
  • Simple application process
  • 48-72 hour approval in most instances
  • Low documentation programs available
  • Quick approval
  • Great rates and affordable terms
  • Exceptional customer service
  • Largest network in the industry