If you’re looking to get a small business off the ground, you should be aware of the myriad loan programs supported by the US Small Business Administration (SBA). To help you get your bearings, this article goes over the basics of several SBA loan programs.
7(a) Loans
7(a) loans serve as the SBA’s primary lending vehicle. These loans range from small amounts to up to $5 million. They can be used to start a business or make it easier to expand an existing one. Per the SBA’s website, lenders do not need to take the collateral if the amount is $25,000 or smaller.
Express Loans
Among SBA loan programs, express loans are notable because of their relatively fast turnaround time. These are available in amounts up to $350,000. The SBA responds to applications for these loans within 36 hours.
CDC/504 Financing
CDC/504 financing is so named because in this setup, Certified Development Companies (CDCs) provide 504 loans to businesses within their communities, working with the SBA to do so. Per the SBA’s page on the topic, 504 loans can be used for purchases such as buildings or land, construction, and debt refinancing, among other needs.
The Community Advantage Program
Per the SBA’s borrower-focused fact sheet on the topic, the goal of the Community Advantage program is to “meet the credit, management, and technical assistance needs of small business in underserved markets.” These loans are available in amounts up to $250,000, and they are targeted toward businesses that may not have other funding options.
Microloans
As their name implies, microloans are among the smallest loans available through SBA loan programs. They average $13,000 apiece but can go up to $50,000. Per the SBA, they can be used for working capital, supplies, inventory, furniture, and equipment.
If you want to continue learning about financing options and the business world, Aspen Commercial Lending’s other blog posts are worth checking out!
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