|
|
|
|
We have tons of info here. Use our Search function to find it
fast....
|
|
|
Article added or updated:
03/30/2008 |
Small Business Administration Loan Program Basics
|
The SBA offers numerous loan programs to assist small businesses. It is
important to note, however, that the SBA is primarily a guarantor of
loans made by private and other institutions.
|
|
|
PROGRAM: Basic 7(a) Loan
Guaranty
FUNCTION: Serves as the SBA’s primary business loan program to help
qualified small businesses obtain financing when they might not be
eligible for business loans through normal lending channels. It is also
the agency’s most flexible business loan program, since financing under
this program can be guaranteed for a variety of general business
purposes.
Loan proceeds can be used for most sound business purposes including
working capital, machinery and equipment, furniture and fixtures, land
and building (including purchase, renovation and new construction),
leasehold improvements, and debt refinancing (under special conditions).
Loan maturity is up to 10 years for working capital and generally up to
25 years for fixed assets.
CUSTOMER: Start-up and existing small businesses, commercial lending
institutions
DELIVERED THROUGH: Commercial lending institutions
www.sba.gov/financing/sbaloan/7a.htm
SBA offers multiple variations of the basic 7(a) loan program to
accommodate targeted needs.
PROGRAM: Certified Development Company (CDC), a 504 Loan Program
FUNCTION: Provides long-term, fixed-rate financing to small businesses
to acquire real estate or machinery or equipment for expansion or
modernization. Typically a 504 project includes a loan secured from a
private-sector lender with a senior lien, a loan secured from a CDC
(funded by a 100 percent SBA-guaranteed debenture) with a junior lien
covering up to 40 percent of the total cost, and a contribution of at
least 10 percent equity from the borrower. The maximum SBA debenture
generally is $1 million (and up to $1.3 million in some cases).
CUSTOMER: Small businesses requiring “brick and mortar” financing
DELIVERED THROUGH: Certified development companies (private, nonprofit
corporations set up to contribute to the economic development of their
communities or regions)
www.sba.gov/financing/sbaloan/cdc504.htm
PROGRAM: Microloan, a 7(m) Loan Program
FUNCTION: Provides short-term loans of up to $35,000 to small businesses
and not-for-profit child-care centers for working capital or the
purchase of inventory, supplies, furniture, fixtures, machinery and/or
equipment. Proceeds cannot be used to pay existing debts or to purchase
real estate. The SBA makes or guarantees a loan to an intermediary, who
in turn, makes the microloan to the applicant. These organizations also
provide management and technical assistance. The loans are not
guaranteed by the SBA. The microloan program is available in selected
locations in most states.
CUSTOMER: Small businesses and not-for-profit child-care centers needing
small-scale financing and technical assistance for start-up or expansion
DELIVERED THROUGH: Specially designated intermediary lenders (nonprofit
organizations with experience in lending and in technical assistance)
www.sba.gov/financing/sbaloan/microloans.htm
PROGRAM: Loan Prequalification
FUNCTION: Allows business applicants to have their loan applications for
$250,000 or less analyzed and potentially sanctioned by the SBA before
they are taken to lenders for consideration. The program focuses on the
applicant’s character, credit, experience and reliability rather than
assets. An SBA-designated intermediary works with the business owner to
review and strengthen the loan application. The review is based on key
financial ratios, credit and business history, and the loan-request
terms. The program is administered by the SBA’s Office of Field
Operations and SBA district offices.
CUSTOMER: Designated small businesses
DELIVERED THROUGH: Nonprofit intermediaries such as small business
development centers and certified development companies operating in
specific geographic areas.
SBA Web Site
|
|
As always, please check with your tax professional,
CPA or lawyer
prior to acting on any advice found here. We do NOT dispense advice on
any articles contained here.
Legal Disclaimer
© Copyright 2003-2008 Please do not reproduce or copy without written permission.
SelfEmployedWeb. All Rights Reserved |
|
|
|
