Starting a small business is never an easy task.
At a minimum, a business plan, perseverance and the necessary funds are needed. The Small Business Administration offers various types of loans for small businesses. To apply, visit a lending institution that participates in SBA programs so that the loan is eligible for an SBA guarantee. This guarantee represents the portion of the loan that SBA will repay if there is default on loan payments. An introductory sampling of SBA loan programs:
Starting and Expanding Businesses
■ Basic 7(a) Loan Program: Loans to eligible borrowers for starting, acquiring and expanding a small business. This loan is the basic and most sought loan within SBA’s business loan programs. Borrowers must apply through a participating lender institution.
■ Certified Development Company (CDC) 504 Loan Program: Loans to growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.
■ Microloan Program: Small loans to start-up, newly established or growing small businesses. SBA makes funds available to nonprofit community based lenders which, in turn, make loans to eligible borrowers up $ 50,000. Applications are submitted to the local intermediary and credit decisions are made on the local level.
■ Disaster Assistance Loans: Financial assistance to victims of disasters or to individuals in a declared disaster area.
Economic Injury Loans
■ For small businesses, small agricultural cooperatives and nonprofit organizations as they recover from economic losses resulting from physical disaster or an agricultural production disaster.
Export Assistance Loans
■ Export Express: Provide exporters and lenders with a streamlined method for loans and lines of credit up to $ 500,000. Lenders use their own credit decision process and loan documentation. SBA provides an expedited response in less than 24 hours.
■ Export Working Capital: Offers loans for businesses that are able to generate export sales but need additional working capital to support these opportunities.
■ International Trade Loans: Term loans for businesses that plan to start/continue exporting or those that that have been adversely affected by competition from imports.
Veteran and Military Community Loans
■ Military Reservist Economic Injury Disaster Loan: Offers funds to eligible small businesses to meet operating expenses that are unable to meet, because an essential employee was “called-up” to active duty as a military reservist.
Minority and Women Owned Business Loans
■ There are numerous SBA loan programs set up with the intent to help women and minority group member entrepreneurs in business. We encourage small business owners to look up SBA loans on line to check for a loan program which matches their situation.