Contract Loan Program: Online Applications

A contract loan provides a business with temporary financing required to ultimately secure a government contract. Without temporary financing, a small business may not have the resources to purchase necessary equipment, successfully write an application for the contract or otherwise win the government as a client. Contract loans can be secured through private organizations, but the most popular provider is the Small Business Administration (SBA). It offers assistance through its guaranty program. This option is provided through the general SBA 7(a) loan option, and applications are accepted online.

Finding the Correct SBA Program

All government contract loans through the SBA fall into the Government Contracting Assistance category. There are three programs within this category: Prime Contracts Program (PCP), Subcontract Assistance Program (SAP) and Certificate of Competency Program (COC). The PCP is initiated through procurement center representatives who help local businesses learn about and apply for contracts. The SAP uses small businesses as subcontractors for existing contractors with large relationships with the federal government. Finally, the COC program helps businesses with a small amount of financial resources qualify for contracts they would otherwise be deemed insufficient.

Requirements to Engage in the SBA Program

The size requirement for a small business is the first criterion. A construction company, for example, cannot have proceeds in excess of $5 million in order to be classified as a small business. Local offices have more information on size requirements. There are limitations on the size of the loan the SBA will guaranty. A small business must seek and secure the loan from a private organization, and the size of this loan cannot exceed the SBA's indivdiual guaranty in order for the business to receive the support. Generally, a business must also be determined credit worthy, the owner's must be determined ethical and the business must present a good chance of success in winning the contract.

Fill out Application Materials

You can locate all materials to apply for an SBA loan online or at a local service center. You must submit the forms in writing, however. The forms are similar to all loan application forms.

  • Prepare information on your credit history as a person and a business
  • Prepare financial statements for your business
  • Prepare a copy of your business plan, which will help the SBA determine if you are a viable contender for the government grant you are seeking
  • Navigate to the application for a 7(a) loan on the SBA website
  • Fill out appropriate information based on the resources you have gathered
  • Print the forms, attach a copy of your business plan and relevant documents, and submit these documents through the mail

If you would like to expedite the process, you can submit forms directly at an SBA service center. To cut back on paperwork, consider working with an SBA qualified lender. These lenders have been approved by the SBA to issue SBA guarantees directly. You will only have to submit one round of applications in order to get both the loan and the guaranty as opposed to two separate sets should you choose to apply with the SBA independently.