Applying for SBA Handicapped Assistance Loans Online

SBA loans provide a way for small businesses to access funding through private lenders. The loan guarantees small businesses access to the capital necessary to be competitive and grow as well as meet the needs of the community.

Handicap Assistance Loans (HAL)

The requirements for the HAL-1 and HAL-2 programs are found in the basic loan (7(a) and CDC/504 economic development programs. The loans are made to meet the specific needs of handicapped business owners as well as those businesses and non profits that employed handicapped employees. HAL-1 directed assistance is available for a business who has at least 75 percent of their direct work performed by handicapped persons. HAL-2 loans go to businesses owned by handicapped persons.

Who is Eligible?

The requirements for HAL-1 include that the organization seeking the finance should be within the particular state laws where the application is made. It is compulsory that above 75% of the employees of the organization should meet the ‘handicapped’ criteria, or that 75% of its productive work hours should be met with by ‘handicapped’ people.

The requirements for HAL-2 include that the organization must not be a dominating one, and must be accordant with the size stipulations laid down by SBA. It is absolutely necessary that the organization is owned 100% by ‘handicapped’ persons. It is also important that these persons aren’t able to carry out the usual business practices that physically capable persons carry out and hence they cannot do without suitable help from the SBA.

SBA Is Not a Direct Lender

You should also note that the SBA does not engage in direct lending with a small business.  Loans made through the 7(a) and CDC/504 programs are done through private lenders that participate in the program. The SBA provides loan guarantees to ensure that the lenders make funding available to small businesses that meet the requirements and qualifications of the programs.

Working with a Private Lender

To apply for these programs, a business that qualifies for HAL-1 and HAL-2 works with a private lender that has been approved by the SBA for the 7(a) or 504 loans. The private lender’s website should have a web-based application that allows a borrower to apply online for the loan.  The application should also provide information on any additional requirements of the lender that must be met by the business, including credit or collateral minimums.

The lender is usually the best source for assistance with the online application. Meeting with the lender, or contacting them directly, is another option available to a small business that is looking to receive a handicapped assistance loan. This may also provide a way for the business to better explain their loan needs and receive guidance as to the best available lending programs.