Business Start-Up Loans from the SBA
When in need of financing for starting a business, don’t forget to check out business start up loans provided by the Small Business Administration (SBA). Although the SBA does not directly provide funding, it helps small businesses to qualify for a loan more easily by backing up the loan, th8us, minimizing the risk for the lender.
In this article, let’s take a look at three popular types of business start up loans from the SBA and define what each program has to offer.
7(a) Loan Program
The 7(a) loan program offers up to $750,000 worth of financing and can be used to cover start-up expenses or as a working capital for the business owner. This loan program is further divided into different categories such as the Lowdoc loan application program and the SBA Express program.
The Lowdoc program requires only a one-page application form, with the borrower’s information on one side, and the SBA’s guarantee for the loan on the other and is therefore a much simpler process. Meanwhile, the SBA Express program provides quick financing access to qualified entrepreneurs.
Check out the SBA’s website for the complete details on how to apply for the 7(a) program and what types of business are eligible to apply.
504 Loan Program
The 504 loan program can be used to purchase land, equipment or other assets necessary for the business. The SBA gives guarantee of up to 40% of the value of the asset. Take note that this type of SBA loan program cannot be used for other purposes such as in purchasing stocks and supplies or to consolidate other debts.
7(m) Microloan Program
The Microloan program offers financing assistance for both start-up and growing small businesses. As the name suggests, the maximum amount of is smaller compared to other business loans. Typically, a microloan offers an average loan of $10,000 up to $35,000 worth of financing and can be a huge help for small enterprises.
If you have tried to apply for a business loan from a bank or commercial lender but was declined, be sure to ask help from the SBA. Check out the SBA’s website to get to know all your available options.
Irish Taylor is a bussiness loan consultant with Startup Business Loans and has been providing consumers and business owners with startup business financing since 1992. For years she has helped people with credit and loan problems especially pertaining to business start up, SBA loans and Unsecured loans.
Copyright 2010.
Related Article: Borrowing Money To Build Your Business
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