top of page
This site was designed with the
.com
website builder. Create your website today.Start Now
The Breakdown
 

Summary:

SBA-backed Loans provide a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.

 

Pros:

  • All loans are backed by the SBA which lenders enjoy a reduced risk in their investment.  

  • Loans can be used to finance a collateral shortfall.

  • Long repayment period.

  • The SBA acts to improve the relationship between local lenders and local borrowers.

Cons:

  • Less freedom for business owners due to strict government regulation.

  • The SBA looks at data from the previous 2-3 years, so its extremely difficult for young business owners to acquire funds.

 

Who Qualifies:

The key factors in becoming eligible to receive loans from the SBA are what your business does to receive income, the character of its ownership and where the business operates.

 

4 Criteria of SBA-Backed Loans:

1) Experience - A minimum of 10 years' SBA lending is required.

2) Prudence - A good record shows few loans bought back by the SBA.

3) Community lending - A solid record of loans to local borrowers, especially to minorities and to women, is needed.

4) Assistance to small business - The banks show a record of helping local small firms. 

SBA-Backed Loans

 

Small Business Administration (SBA) Backed Loans are term loans from a bank or commercial lending institution that the SBA guarantees as much as 80% of the loan principal for. SBA financing programs vary depending on a borrower's needs. SBA-guaranteed loans are made by a private lender and guaranteed up to 80% by the SBA, which helps reduce the lender's risk and helps the lender provide financing that's otherwise unavailable at reasonable terms. 

 

The following are different SBA-Backed Loan Programs:

  • 7(a) Guaranteed Loan Program

  • 504 Local Development Company Program

  • The Microloan Program

    • State Business and Industrial Development Corporations (SBIDCs)

    • CDC-504 Loans

    • Community Adjustment and Investment Program Loans

    • Energy and Conservation Loans

  • The Export Working Capital Program

  • The Export-Import Bank (EXIMBANK)

  • The Small Business Innovation Research Program (SBIR)

  • The Diaster Loans Program

 

The SBA uses 3 primary types of lenders to fund loans:

1) Infrequent participant lenders

2) Certified lenders

3) Preferred lenders

 

Click the picture above to find out more about SBA-Backed Loans. 

Click the picture above to find out more about SBA-Backed MicroLoans. 

bottom of page