The Small Business Administration (SBA) has a number of loan programs designed specifically for small and medium sized business, including microloans, SBA 7(a) loans, and CDC/504 loan program.
Understanding SBA Loans to Small Businesses
What is an SBA Loan?
The U.S. Small Business Administration, or SBA, is a federal agency that provides loan guarantee programs and other services to support and encourage the growth and development of small businesses across the United States. It was founded on July 30, 1953, and has delivered over 20 million loans, guarantees, counseling sessions, contracts, and other forms of assistance to small businesses across the country. SBA loans are offered to borrowers through multiple financial institutions.
SBA Loan Guarantee Program
The SBA guarantees a portion of the loan, which makes it easier for lenders to provide loans to small businesses that may fall in a higher risk category. These businesses may not be in a strong enough financial position to obtain traditional bank small business loans, and therefore rely on the SBA guarantee.
Common SBA Loan Program Features
SBA programs offer lower down payments and longer term financing, which can help businesses just starting out, those looking to expand, or better manage their cash flow. This allows small businesses to focus on operational expenses rather than debt repayment.
What Can I Use an SBA Loan For?
Loans from the SBA are provided for various purposes. These include business start-ups or acquisitions, working capital, owner-occupied real estate, franchise financing, inventory, debt refinancing, equipment, and even improvements and renovations.
Choosing an SBA Lender
Biz2Credit can help borrowers find the right SBA lender for their needs, and we have the experience needed to make SBA borrowing easier and more convenient for our customers.