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The SBA can help: Guaranteed loans in a nutshell

If you’re planning to start a business or expand an existing business, you might need financing help. SBA participates in a number of loan programs designed for business owners who may have trouble qualifying for a traditional bank loan.

To start the process, you should visit a local bank or lending institution that participates in SBA programs. SBA loan applications are structured to meet SBA requirements, so that the loan is eligible for an SBA guarantee. This guarantee represents the portion of the loan that SBA will repay to the lender if you default on your loan payments.

The SBA Loan Application Checklist provides a listing of forms and documents you and your lender will need to create a loan package to submit to SBA. That checklist is available online at www.sba.gov.

Loans for starting and expanding businesses

  • Basic 7(a) Loan Program – This type of loan is the most basic and the most used within SBA’s business loan programs. Borrowers must apply through a participating lender institution.
  • Certified Development Company (CDC) 504 Loan Program – Provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings.

Microloan Program – Offers very small loans to startup, newly established or growing small businesses. SBA makes funds available to nonprofit community-based lenders which, in turn, make loans to eligible borrowers in amounts up to a maximum of $50,000. Applications are submitted to the local intermediary and all credit decisions are made on the local level.

Export Assistance Loans

  • Export Express – Provides exporters and lenders with a streamlined method of obtaining financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. SBA provides an expedited eligibility review with a response in less than 24 hours.
  • Export Working Capital – Offers loans targeted at businesses that are able to generate export sales but need additional working capital to support these opportunities.
  • International Trade Loans – Gives term loans that are designed for businesses that plan to start/continue exporting or those that that have been adversely affected by competition from imports. The proceeds of the loan must enable the borrower to be in a better position to compete.
  • CAPLines – Help small businesses meet their short-term and cyclical working-capital needs through the SBA umbrella program called CAPLines.

This article is featured in the 2017 Small Business Resource Guide, a free publication from Business Examiner Media.