SBA Loan Basics

Gather information about SBA loans before applying

Small Business Administration loans are available for numerous purposes to many small businesses from a home based business with no employees besides the owner to multi-branch small businesses. Loans amounts vary, with the cap falling between $5,000 and $5,000,000, depending on the loan. Commercial loan companies, most often banks, make these loans but the SBA backs them.

Preparation is the key to obtaining an SBA loan. Consider the following SBA loan basics to determine if an SBA loan is right for your business:

1. Determine the type of SBA loan you feel is appropriate for your business and its needs.

2. Find a lender that can work with you to secure an SBA loan.

3. Figure out if you qualify for a special circumstance SBA loan.

 

Learn about the specifics of SBA loans

SBA loans can be used for numerous purposes, including purchasing real estate for the business, paying employees or consolidating business related bills. Learning about each program, including qualifications, ensures you are applying for the correct loan.
Try: You can find basic SBA loan information at CreditInfoCenter.com. This company describes the approved uses and base SBA lending rates. All Business has detailed SBA financing information, including a step by step guide to securing a business loan.

Choose your preferred SBA lender

The SBA loan program is in place to guarantee your loan. The SBA usually doesn't make its own loans. This means you will have to find an approved SBA lender in your area. Choosing a lender will depend largely on the requirements the lender has in place for SBA backed loans.
Try: The US Small Business Administration offers a list of SBA lenders based on the program in which you want to participate. You can also get help with business plans and other small business related questions BusinessFinance.com offers a free matching service that allows you to find an SBA lender that meets your needs.

Consider special circumstance SBA loan programs

After declared disasters, such as hurricanes or terrorist attacks, certain Small Business Administration loan programs can be used to rebuild personal property. You will have to meet certain criteria to obtain this funding, but the guidelines are generally more relaxed than for traditional SBA backed loans.
Try: FEMA has information about the SBA disaster loan programs, including descriptions of the three programs. GovLoans.gov has descriptions, including qualifications for various SBA loan programs. You can even find information about SBA loans for personal property on this website.

 

• If you are unable to secure an SBA loan, consider applying for an SBA grant. These grants are usually difficult to obtain because of the numerous people who apply for them, but your credit score doesn't affect a grant since you don't pay it back.

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