SBA Loans

The US Small Business Administration (SBA) offers a range of different loans that are designed to help businesses in various different stages – from start-ups to larger enterprises that may have fallen on hard times. Finding out exactly what the SBA has to offer is always a wise move – especially if your applications for bank loans with commercial lenders have been turned down to date.

SBA loans aren’t handed out directly by the US Small Business Administration. Instead these loans are granted by private sector lenders such as banks and credit unions – the SBA stands behind you as a guarantor for the loan, should you end up defaulting on the sum owed. In order to obtain an SBA loan, you should get in touch directly with private sector lenders and ask whether SBA loans are something that they offer.

Types of Loans

A 7(a) loan

This is where the SBA acts as your guarantor when taking out a loan. Usually the maximum sum that the SBA will guarantee is $1 million. This is the most common type of SBA loan that’s used by start- ups and established companies that require funding on reasonable terms.

Certified development company loan

This type of loan is for long term, fixed rate borrowing for small businesses. It’s the ideal loan to use when it comes to purchasing new machinery or equipment for a business.

Disaster recovery loans

If your business is situated in a location that has been the subject of a disaster, there’s help available from the SBA in order for you to get your business back on the right track. The loans vary in details so it’s best to contact the SBA directly, let them know your situation and see exactly what they can put on the table to help you.

As is apparent, there are various routes that you can go down when it comes to SBA loans. If you’ve been unable to obtain funding for your business through a private lender to date or your business has been hit by disaster, it’s well worth looking into what’s on the table for you. The SBA is there primarily to assist small business owners in unlocking the funding they need to improve and grow their businesses – the SBA is an organization you should definitely reach out to if funding becomes a major head ache.