As banks tighten lending standards, small businesses and startups are running out of capital resources. However, loans guaranteed under the SBA 7(a) program still provide small business owners with access to credit.

There’s a better option for entrepreneurs financing their business ventures with home equity credit lines or personal savings. Through the SBA 7(a) program, lenders will provide up to 80 percent of the project cost if borrowers can foot the remaining 20 percent. Depending on the business plan, viability of the project, current business profile and the borrower’s credit history the lender may take a second lien on real estate owned by the entrepreneur.

For example, a successful limousine business owner wanted to acquire a Coldstone Creamery franchise to diversify across industries. In operation for three years, the business was listed for $400,000. Despite a patchy credit history, the entrepreneur received an SBA 7(a) loan from an SBA Preferred Lender and acquired the business. The entrepreneur only had to cover 25 percent of the project cost personally.

Despite a fragile economy and sluggish capital flow, SBA programs still provide entrepreneurs with valuable financing options and a means to grow their enterprise.