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What is SBA and what kind of loans does it offer to small businesses?The United States Small Business Administration as it is popularly known as SBA was established in the year 1953 under the small business act with concerns such as to protect, counsel, assist and aid small businesses in whatever way possible as provided by the law. The mission of SBA as stated on their website makes it clearer and it is here:SBA loans for small businessesSBA has drawn up a series of loan programs to achieve this goal of assisting small businesses. However it is important to note at this stage that SBA does not provide loans but it assists and guarantees them that are to be provided by banks, other private financial institutions and not for profit organizations.Before discussing the eligibility criteria for SBA loans we will see the different SBA loans that are available for small businesses. So here are they.
The Micro Loan 7 (m) is made suitable for businesses that are in urgent need of cash for their short term necessities. The maximum amount of money that is permissible under this program is $ 35,000 only. This SBA business loan comes with a stipulation that it can be used for short term necessities like working capital, furniture, inventory and equipment and machinery purchase etc. Small business set ups such as day care centers for babies also qualifies for this small loan. And as in all loan programs, this loan too is delivered through not for profit organizations. The CDC 504 program is more suited for small businesses looking for bigger amounts. This covers necessities like real estate, machinery and equipment purchases and includes modernization and expansion too. The loan is made available through Certified Development Companies that qualify. Term is 5 years and the loan limit is $ 5 million. EWCP helps small businesses develop export in international markets. The LowDoc program is gaining popularity for its simplicity of documentation. Amount of loan is $ 150,000 and it comes with a term of up to 25 years. The CapLine Loan is particularly designed to help small businesses tide over their cash flow problems. It really helps small businesses by saving from cost run over and perhaps loss of business. The amount is a magnanimous $ 2 million for 5 years. Minorities and women have a special consideration in SBA's scheme of things. They enjoy more assistances in kind at preparing loan applications and counseling through out. These applications are processed by SBA within 72 hours and lenders almost immediately disburse the loans called as prequalification loans. However, qualification for this loan is by establishing 51% of the stake is held by minorities or women as the case may be. Natural disaster loans are dedicated to such small businesses that have incurred losses in disasters such as Hurricane Katrina etc. This small loan is available to existing businesses that have run for at least a year. Continue to : Eligibility for SBA loans Related ArticlesBusiness loans - Find out the options availableThe right source for women business loans SME loans - Know the various schemes Avail the benefit of getting small business grant loans Unsecured business loans - Go for it if you have the guts to repay it Business start up loans - The alternatives available for budding entrepreneurs Thinking for the Long Term? Get CDC 504 Loans  Bookmark
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