Small businesses are the backbone of the American economy and helping them flourish is vital to the nation’s well-being. That’s where the Small Business Administration (SBA) comes in, offering programs that make it easier for lenders to provide capital to small businesses like yours so that you can continue to thrive.
Rather than lending money directly, the SBA sets loan guidelines for partnering financial institutions—banks, community development agencies, and micro-lenders—and offers loan guarantees to minimize lender risk.
That way, everybody wins. Business owners like you have access to financing for capital growth and lenders can distribute more growth capital.
The SBA also helps support the federal government by encouraging economic growth and higher employment rates.
SBA loans vs. conventional loans
Opportunities for growth may arrive before your business can qualify for conventional financing. The SBA makes things easier by offering lenders loan guarantees, giving you more capital flexibility.
Specific SBA programs
The SBA offers several loan programs to meet a range of capital needs.
- SBA 7(a) Program – The flexible SBA 7(a) Program—the SBA’s most popular loan product—provides financing for a wide variety of capital needs, including growth, acquisition, and restructuring. Loans can be as high as $5 million with down payments as low as 10%.
- SBA 504 Program – Typically used for commercial real estate and large equipment transactions, the SBA 504 Program offers fixed and variable rates with terms up to 25 years. If you have different financial needs, it’s possible to combine the 504 with the 7(a) to access greater amounts of capital.
- SBA Express Programs – With a streamlined process, these programs provide quick access to short-term working capital through either a line of credit or 7(a) loan. Programs cover a range of options, from offering money to help navigate a crisis to the Export Express Program, which provides your business with capital to start and/or maintain export sales.
- SBA Specialty Programs – These programs include disaster recovery loans and other special focus programs.
SBA banking expertise
Each bank has its own way of delivering SBA loans. As a business owner in need of capital, you’ll want to find an experienced lender who regularly handles SBA loans. Look for banks that have made SBA lending a cornerstone of their small business services. Take the time to research each lender and ask questions like:
- What dedicated resources do you offer for SBA applications?
- How many SBA loans has your bank successfully closed in the past 12 months? How much was each loan?
- Which SBA programs do you offer? How many of each did your bank close over the past 12 months?
- Does your bank have any additional loan requirements besides the SBA guidelines?
