Small Business Government Loans

Some people look first to the SBA for small business government loans, and for good reason: the SBA is a big lender for startup businesses.

The SBA offers a myriad of programs and services for small business, from microloans to 8(a) loans to export assistance to women's roundtables to lots more.

Major SBA Small Business Government Loans

The SBA 7(a) Loans

This is the major loan program in the SBA. It may be used for start-up, expansion, equipment purchases, working capital, inventory or real-estate acquisition. The SBA will guarantee up to $750,000 of a bank loan. Interest rates are negotiated between the applicant and the bank.  Here is where business plans for SBA really shine.



8(a) Programs

The SBA administers two particular business assistance programs for small disadvantaged businesses (SDBs). These programs are the 8(a) Business Development Program and the Small Disadvantaged Business Certification Program.  Both are unique types of small business government loans.

While the 8(a) Program offers a broad scope of assistance to socially and economically disadvantaged firms, SDB certification strictly pertains to benefits in Federal procurement. Companies which are 8(a) firms automatically qualify for SDB certification.

One of the outstanding programs offered under 8(a) is the Mentor/Protege Program which matches small and disadvantaged firms with those that are larger and more successful.  Sometimes there are mentors who can assist with business plans for SBA funding.

Low Documentation SBA Small Business Loans

Small businesses looking for less than $150,000 may qualify for a "low doc" loan, which simply means less paperwork.  Only particular banks can offer this type of small business government loan, so check with your SBA office for particulars.

SBA Express

The Express program encourages banks to make more small business government loans to small businesses directly (i.e., without SBA direct involvement). Under this program, banks themselves approve loans up to $150,000, and can even include revolving lines of credit.  Business plans for SBA funding will speed the process along.

Prequalification Program

Under this program, it is the SBA that does the determination for a loan. Certain applicants -- such as veterans, minorities, exporters, rural small business owners and certain specialized businesses -- can be "prequalified" by the SBA before they approach a bank. The SBA judges the applicant on character, credit, experience and reliability rather than assets. May be for loans up to $250,000.

7(m) Microloans

SBA small business loans for up to $35,000 on a short term basis. May be used for inventory, supplies and working capital.

CAPLines

The SBA guarantees loans up to $750,000 for the cyclical and short term needs of businesses, such as seasonal purchasing, builders, and asset-based lending.  Business plans for SBA funding are essential here.

504 SBA Loans

The 504 program provides long-term, fixed-asset financing through certified development companies. May be up to $1 million.

Physical Disaster SBA Loans

Any company that is located in a federally-declared disaster area may be eligible for up to $1.5 million in loans to return the business to pre-disaster status.

Community Adjustment and Investment (CAIP)

These 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 Program

Short term loans for export-related transactions. The SBA will guarantee up to 90% of a secured loan or $750,000.

International Trade Loan

Both short and long term financing for companies involved in exporting. Up to $1.25 million can be guaranteed.

Pollution Control Loan

Businesses that design, build, install or service pollution control facilities may be eligible for up to $1 million in SBA guarantees.

These are only the major programs. There are others!

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