All About SBA Business Loans

Small businesses can avail themselves of various business loans from the SBA. Depending on your company's financing needs, the Small Business Adminstration (SBA) serves as guarantor in able for you to obtain funds from commercial lenders.

Types of Business Loans

There are 5 different business loans that the SBA provides to small firms:

7 (a) loan program - Known as the basic loan program, 7 (a) is offered to eligible American small businesses. Proceeds of the fund can be used to purchase machinery or equipment, renovation of facilities, refinancing debts, purchase of buildings or lands, and even for working capital. The maximum amount a business can borrow is up to $2 million.

cdc/504 loan program - The source of funds of this loan is shared between private-sector lenders and certified development companies. The borrowed capital can only be used to finance fixed-assets like purchase of machinery and equipment, land acquisition or improvements of business facilities. A maximum amount of $4 million is made available to qualified "small manufacturers."

micro-loans - This loan is exclusively offered to start-ups, newly established, and growing small businesses which need small-scale or technical financing. The average fund a company can request is $13,000 with a maximum of $35,000.

business disaster recovery loan - This loan finances the loss or damage of business properties affected by natural calamities. Business of all sizes can apply through the "physical disaster loans" up to a maximum of $2 million.

special purpose loans - These are loans aimed to finance special programs of businesses which include working capital for global expansion and employee stock ownership plans. The amount of funds depend on the loan category.