The U.S. Small Business Administration offers services to small business owners in an effort to help those owners grow their business. SBA guaranteed loans tend to have more stringent regulations on how money can be used than other loans. However, SBA loan programs provide additional funding avenues to small business owners who may otherwise struggle to get funding.
Since the SBA has their own website with superior information, this article is intended as a brief synopsis of available SBA loan programs with pertinent links to SBA.gov.
The major loan programs found at SBA.gov include:
1. 7(a) loan program:
This program provides aid to highly specified groups to include active duty military personnel and their spouses, veterans, businesses who handle foreign exports, operate in rural areas and those businesses affected by NAFTA. The key to taking advantage of this program is falling into one of the groups that it specifies. Make sure to check here to see if there's an 7(a) loan that could help your business.
2. Microloan program:
As the name suggests, the SBA Microloan Program offers "small, short-term loans to small business concerns and certain types of not-for-profit child-care centers." Funding from a microloan can be used for various purposes, and the decision to grant a microloan is always made the local level. So if you're a small business owner looking for this kind of funding, be sure to get in contact with an intermediary, or lender, in their area. More information about this program can be found here.
3. CDC/504 Program:
This last SBA program seeks to foster community development through long term financing for small businesses/manufacturers. Typically funding for a CDC/504 project comes is split between a private sector lender, a Certified Development Company (CDC), and the borrower, however the borrower typically provides only 10 percent of the total project cost, while the remaining 90 percent is split between the CDC and private sector lender. This particular program impinges strict definitions for businesses and manufacturers as 'small' as well as strict guidelines on how program monies can be used. Click here to get more information on this program.
In addition to these loan programs, the SBA also provides opportunities to obtain grants, bonds and 'other financial assistance.' More information on each of these funding channels can be found here