What is an SBA Loan? The U.S. Small Business Administration does not loan money directly to businesses, what they do is guarantee a percentage of the loan to a participant lender, usually around 85%. There are different categories of SBA Loans to fit different types of business situations.
SBA 7(a) Program and Express Loan Program - The 7(a) Program is the primary program designed for all existing business for working capital or business expansion. The basic requirements are you must have been in business for two years, have a credit score around 650 and be able to show repayment ability through your financials. Loan amounts can go up to $350,000. Payback times are usually around 10 years and the interest rates averages about 7.5%. The SBA Recently established their Express Loan program that allows for a more simplified application procedure and a quicker turn around on SBA approvals - sometimes just a few days. However you pay a slightly higher interest rate. The best source I have found for this type of loan is SmartBiz The company can Pre-qualify you in as little as 5 minutes without impacting your credit score, then you work with their relationship manager who can put your package together for you. They then submit to an SBA approved lender that best fits your business and will be most likely to fund your loan. Funding can take place in as little as 7 days. SmartBiz is rated A+ by the Better Business Bureau and has a 5 star review ranking. Contact SmartBiz for more information or to apply
SBA Microloan Program - If you are a startup business, while you can’t qualify for the 7(a) Program you can probably qualify for the SBA Microloan Program. This program provides funding up to $50,000. You will need to provide a small down payment on your project, usually about 10-20% and provide a personal guarantee. There is a 1% loan origination fee. Approval times are very quick. This type of loan is normally done locally so there are no on-line sources I can recommend. Visit the SBA website and request their assistance in finding a local lender in your area that participates in the Microloan Program
The SBA 504 Loan program - is a powerful economic development loan program that offers small businesses another avenue for business financing, while promoting business growth, and job creation. The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. 504 loans are made available through Certified Development Companies (CDCs), SBA's community based partners for providing 504 Loans. For more information or to start the process visit the SBA Website