SBA Business Loans For Your Startup

When you are trying to start your business or expand an existing business, often there is a need for additional funding. The Small Business Administration has a number of programs available for small entrepreneurs to borrow money. Are you an entrepreneur in the making? If so yes, here’s we describe the some good information to know.

7 (a) Loan Guaranty Program

The 7(a) is the SBA’s most popular loan program. As a small business owner, you can get up to $2,000,000 from your local 7(a) lender, backed by a partial guarantee from the SBA. Note that the SBA is not lending you any money directly. What they are doing is making it less risky for a local lendr to provide you with financing. The loans are very flexible since they can be used for starting a business or expanding an existing business and are funded by commercial lenders. Possible uses for a 7(a) loans are typically used for working capital, New furniture ore fixtures, renovation, asset purchases and leasehold improvements.

Some of the loans under this program include Express Programs, Rural Lender Advantage Program, Export Loan Programs and Special Purpose Loan Programs.

Loan maturity for 7(a) loan programs is up to 10 years if used as working capital for the business or up to 25 years if used for fixed assets.


For qualified new businesses needing start up capital, or an existing business needing funds to grow, the SBA Microloan Program provides loans up to $35,000 through nonprofit lenders in the community the business is located in. Microloans are short-term, and are usually used for not-for-profit child care centers or to finance small business concerns such as inventory, training or necessary equipment expenses. The average amount of SBA microloans is around $13,000. Microloans cannot be used to pay off other business debts or to buy business real estate.

America’s Recovery Capital Loan (ARC)

Another program through the SBA offering up to $35,000 for small business owners was started as a result of the struggling economy. Because small businesses contribute to the economy, the government decided to create America’s Recovery Capital Loan program. The loans are meant to help a struggling business get back in the “green” and turn a profit. ARC loans are only available until September 30, 2010 (or until the program funding runs out).

Disaster Recovery Loan Program

If your business is located in an area declared as a “disaster area”, you could be eligible for a Disaster Recovery Loan. These programs are sometimes offered by the SBA even to people who don’t own businesses if a homeowner, renter or personal property owner experienced losses due to natural disasters.

Homeowner and Renter Disaster Loans – there are personal property loans up to $40,000 to help repair or replace damaged personal property such as clothing, cars, furniture or electronics. Homeowners may also apply for loans up to $200,000 to replace or repair the home itself.

Business Disaster Loans – up to $2 million can be used to repair or replace any real property owned by the business. There are also Economic Injury Disaster Loan programs for businesses up to $2 million to help if the business suffers economic injury, even if no physical damage has been caused.


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