SBA Loans

SBA Loans are loans that are guaranteed by the Small Business Administration. The SBA does not loan money to any business. What they do is provide a guarantee to a bank or credit union that you will repay the loan as promised. In today’s business lending environment many banks prefer SBA backed loans as they present minimal risk for the bank. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA sets the guidelines for loans, which are then made by its approved lending partners. SBA loan guaranty requirements and practices can change as the Government alters its fiscal policy and priorities to meet current economic conditions. Therefore, you can’t rely on past policy when seeking assistance in today's market. The application process is very detailed so be sure you have your business plans, personal tax returns, business tax returns, and application completed far in advance of needing the funding. Most decisions take 10 to 21 days, and funds may not be disbursed for several weeks after the SBA approval.

SBA also offers the Surety Bond Guarantee (SBG) Program which helps small business contractors who cannot obtain surety bonds through regular commercial channels.

A surety bond is a three-party instrument between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed. Many government and city projects require surety bonds so it’s a very important program for smaller contractors.

These are some of the SBA backed loans below:

U.S. Small Business Administration

7(a) Loan Program

For starting, acquiring and expanding a small business, 7(a) loans are the most basic and most used type loan of SBA's business loan programs. Borrowers must apply through a participating lender institution.

CAPLines

CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs.

Certified Development Company (CDC) 504 Loan Program

The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Community Adjustment and Investment Program (CAIP)

The Community Adjustment and Investment Program (CAIP) was established to assist U.S. companies doing business in areas of the country that have been negatively affected by the North American Free Trade Agreement (NAFTA). CAIP loans allow for the payment of fees on eligible loans, including the 7(a) Loan Program guaranty fee and the 504 program guaranty and CDC and lender fees. Depending on the size of the loan, these fees can be sizeable. CAIP works with SBA to reduce borrower costs and increase the availability of these programs.

Employee Trusts

The Employee Trusts program is designed to provide financial assistance to Employee Stock Ownership Plans. The SBA can assist qualified employee trusts that meet the requirements and conditions for an Employee Stock Ownership Plan (ESOP) as prescribed in all applicable IRS, Treasury, and Department of Labor regulations. Your small business must provide all the funds needed to collaterize and repay the loan.

Microloan Program

Provides very small loans to start-up, newly established, or growing small business concerns. SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.

Provided by sba.gov

If you don’t think you will qualify or need funding sooner than the SBA approval process can provide we have lots of other financing options available. To get a financing solution quote click here to start the process. Apply Now

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