Small Business Loans
The U.S. Federal Government is the nation's largest provider of financial
assistance for small businesses!
Since 1953 the Federal Government's Small Business Administration has helped
small businesses succeed, from start-up through the many stages of growth.
Many big businesses whose names are now household words -- FedEx, Intel,
Nike, Apple, Ben & Jerry’s, Compaq and AOL, just to name a few -- received
money from the Federal Government along the way.
Small Business Loan Programs
The Small Business Administration is Congressionally mandated to assist
the nation’s small businesses in meeting their financing needs. The
agency’s mall business loan programs enhance the ability of lenders to
provide long- and short-term business loans to small businesses that
might not qualify through normal business loan channels.
There are basically four types of Small Business Administration business
loan and equity investment programs available: the 7(a) Business Loan
Guaranty Program, the 7(m) MicroLoan Program, the 504 Certified
Development Company Business Loan Program and the Small Business
Investment Company Program.
7(a) Business Loan Guaranty Program
The 7(a) Business Loan Guaranty Program is the Small Business
Administration's primary small business loan program. It is also the most
flexible small business loan program, since the agency can guarantee
financing under this loan program for a variety of general business
purposes. In guaranteeing a small business loan,
the Small Business Administration (SBA) assures the lender that, in the
event the small business owner does not repay the business loan, the Small
Business Administration will reimburse the small business lender for its
loss. The small business owner however, still remains obligated for the full
How It Works
You submit a business loan application to an SBA participating small
business lender for initial review. If the business lender approves the
business loan subject to an SBA guaranty, a copy of the business loan
application and a credit analysis are forwarded by the business lender to
the Small Business Administration.
Following SBA approval, the business lending institution closes the business
loan and disburses the funds to the small business owner. The small business
owner makes monthly loan payments directly to the business lender.
No balloon payments, loan application fees or points are permitted with 7(a)
business loans. The small business lender can tailor the repayment plan for
each small business.
Use of Proceeds
A start-up small business or existing small business may use the proceeds of
a 7(a) guaranteed business loan to —
• expand or renovate facilities;
• purchase machinery, equipment, fixtures and leasehold improvements;
• finance receivables and augment working capital;
• refinance existing debt (under some circumstances);
• finance seasonal lines of credit;
• construct commercial buildings; and/or
• purchase land or buildings.
SBA Loan Prequalification Program
The SBA Small Business Loan
Prequalification Program is offered to armed forces veterans, minorities,
women, exporters, rural small business owners and business owners in certain
specialized industries, this small business loan program enables the SBA to
pre-qualify an applicant for a 7(a) loan guaranty before the applicant goes
to a bank.
Development Company (CDC) Program
The 504 Certified Development Company Program provides growing businesses
with long-term, fixed-rate business loans for major fixed assets, such as
land and buildings. Approximately 270 CDCs nationwide work with the Small
Business Administration and private-sector business lenders to provide
financing to small businesses. CDCs are nonprofit corporations set up to
contribute to the economic development of their local communities.
SBALowDoc is the Small Business
Administration’s quick and easy small business loan program that provides a
guaranty on small business loans of $150,000 or less. You complete the front
of a one-page business loan application. The agency processes completed loan
applications within 36 hours.
SBAExpress Loans provide small business loans
of $250,000 or less. The SBA provides a rapid response through its PLP
processing center in Sacramento, Calif.— within 36 hours of receiving the
complete application package. Lenders use their own procedures to approve
and service the loans.
The SBA’s Microloan Program provides very small business loans up to $35,000
to small businesses and not-for-profit child-care centers through a network
of locally based intermediary business lenders.
Through CAPLines, the Small Business
Administration helps small businesses meet their short-term and cyclical
Defense Loan and
Technical Assistance (DELTA) Program
If you own a defense-dependent small business that has been adversely
affected by defense cuts or that is located in a defense-impacted community,
the DELTA Program can help you diversify into the commercial market.
The CommunityExpress Loans pilot program is
designed to spur economic development and job creation in untapped rural and
inner city communities by providing small business loans in low and moderate
income urban and rural areas.
Community Adjustment & Investment (CAIP)
CAIP loans are intended to
create new, sustainable jobs and preserve existing jobs in businesses at
risk due to changing trade patterns with Canada and Mexico.
Export Working Capital (EWCL) Loan
The EWCP provides
short-term loans to small businesses for export-related transactions. Under
the EWCP, the SBA can guarantee up to 90 percent of a secured loan or
International Trade Loan (ITL) Program
The International Trade Loan Program provides small business loans to
businesses engaged in international trade, prepared to engage in
international trade, or adversely affected by competition from imports.
Energy & Conservation Loan
Small business loans are available for businesses engaged in engineering,
manufacturing, distributing, marketing, and installing or servicing products
or services designed to conserve the nation’s energy resources.
Pollution Control Loan
This program provides small business loans to businesses that are planning,
designing or installing a "pollution control facility". Unlike the Energy
Conservation Loan, the Pollution Control Loan is for the end-user of the
pollution control facility.
Qualified Employee Trusts Loan
The Small Business Administration can guarantee 7(a) business loans to
employee trusts that are part of a plan sponsored by their employer, and
qualify under the Internal Revenue Code as an (Employee Stock Ownership
Plan) or the Department of Labor (under the Employee Retirement Income
Security Act). Loan proceeds may be used by an employee trust for a growth
and development loan, whereby the trust re-lends the loan proceeds to the
employer by purchasing qualifying securities in the employer's business; or
a change of ownership loan, whereby employees acquire controlling interest
in the employer's business. Collateral for the loan includes the assets of
the employer's business.
SBA ExportExpress Loans
SBA ExportExpress Loans may be used for most export-related business
Small Business Grants
Small Business Innovation
Research (SBIR) Program
Small Business Innovation Research (SBIR) program, 10 federal agencies
having annual external research and development requirements of more than
$100 million, must reserve 2.5% of these funds for award to small
Small Business Technology Transfer (STTR) Program
Under the Small Business
Technology Transfer (STTR) program, five agencies with annual external
research and development budgets of more than $1 billion, must reserve .15%
of these funds for award to collaborative efforts between small businesses
and non-profit research institutions.
Small Business Investment
Business Investment Companies (SBICs) put venture
capital, in the form of small business loans and equity financing, into
small businesses for growth, modernization and expansion. SBIC's are
investment companies licensed by the Small Business Administration. They
make venture capital investments and long-term small business.
Information Site Map
Government Grants & Loans
For Small Businesses!
The U.S. Federal Government is the nation's largest provider of financial
assistance for small businesses!
SBA Loan: Qualifying and Applying
In 1953 the United States government established the Small Business
Administration (SBA) as a way of assisting entrepreneurs in forming successful
small businesses through government guaranteed loans.
SBA Loan: Options, Benefits, and Lenders
Part 2 of 2
In this second installment, we will further examine what kinds of SBA loan
options are available, and for what kinds of businesses they are most
advantageous. We will also discuss the different types of SBA lenders. There are
several different lending programs for those who qualify for an SBA loan.
Venture Finance: Federal Grants and Loans
While most companies seeking venture capital initially think about angel
investors and venture capitalists, a large alternative source of financing is
federal grants and loans. The two largest federal grant programs are run by the
Small Business Administration (SBA), and by Small Business Investment Companies
How to Get a Business Loan in Five Steps
Need funds to startup or expand your business? Follow these steps: A lender
looks at a loan request in three sections known as the "three C's". They are:
Credit, Capacity, and Collateral
Finance Your Home Business: Six Ways Under
There are lots of ways to get additional capital to expand a home-based
business. But before you look outside for financing, leaving the decision about
your company's progress and merits to someone else, consider these six ways
under your nose to finance your home-based business.
Seven Tips For Credit-Enhancing Your
What are the avenues available to
businesses with weak credit profiles or to companies pursuing credit
transactions that are perceived as too risky by credit providers?
Business Credit Scoring: Is It a Killer
Application or Application Killer?
Computers now make important credit decisions for major banks and financing
companies. By gaining a better understanding of the credit scoring process, you
may be able to help your firm maneuver in the new world of credit scoring. Here
are some key points about business credit scoring worth noting.
Making Your Business Happen with a
There are literally hundreds of commercial lenders waiting to provide new
businesses with growth capital. With so many lenders to choose from, how can you
get past the gimmicks to find the one that will fill your needs?
Business Loans from Family - A Good Idea?
One option is to ask your family for help. Asking for financial help is always a
tough decision, but sometimes it is the best option. In most cases a loan from
the family would be interest free.