SBA Loan

Does the SBA have a program to benefit you?

General Information on SBA Loans
All SBA loan programs lend to small businesses unable to secure financing on reasonable terms through normal lending channels. The loan programs are operated through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA — the Agency has no funds for direct lending or grants. Most private lenders (banks, credit unions, etc.) are familiar with SBA loan programs so interested applicants should contact their local lender for further information and assistance in the SBA loan application process. [Many States offer small business grants.]

7(a) Loan Guaranty Program
One of the SBA’s primary loan programs, 7(a) offers loans of up to $2,000,000. (The maximum dollar amount the SBA can guaranty is generally $1 million.)
Complete loan information from SBA

Certified Development Company (CDC), a 504 Loan Program
Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower.
Complete loan information from SBA

Microloan Program
This new program offers loans of up to $35,000 to qualified start-up, newly established, or growing small business concerns. Loans are arranged through nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers. The entire Microloan process is handled on the local level, but you must go to one of the local intermediaries to apply.
Complete loan information from SBA

Targeted Loan Programs
Besides the general programs described above, the SBA offers several loans designed to meet specific needs. For complete information, just click on the program titles.

Gulf Opportunity Pilot Loan (GO Loan) Program
The U.S. Small Business Administration is initiating a one year Gulf Opportunity Pilot Loan (GO Loan) Program to expedite small business financing to those communities severely impacted by Hurricanes Katrina and Rita. Under this unique initiative, the Agency will provide its full guaranty and streamlined and centralized loan processing to qualified lending partners that agree to make expedited SBA 7(a) loans available to small businesses located in those disaster areas.
Complete loan information from SBA

Other SBA Loans
For complete information on the loan programs shown above, as well as other more specialized loans available through the SBA, see:
Financing Your Business - from the SBA.

Veterans & Disabled Persons? — Unfortunately, the SBA has not been granted funds to offer special loan programs to assist either veterans or disabled persons. However, individuals of both groups are eligible for all SBA loan guaranty programs. In addition, veterans are eligible for special consideration under SBA’s guaranty loan programs. The special consideration given veterans includes: Liaison personnel in each field office; In-depth management counseling and training assistance; and, Prompt and priority processing of any loan application.

What About Business Size?
Of course, not every business is a “small” business. To be eligible for SBA loans, your business must meet certain size restrictions.

Here you will find brief descriptions of the primary loan programs available through funding from the U.S. Small Business Association (SBA). For detailed information, including qualifications, allowable uses of funds and interest rates, click on “Complete loan information from SBA.”

SBA Maximum Loan Amounts

Maximum Loan Amounts

SBA’s 7(a) Loan Program has a maximum loan amount of $2 million dollars. SBA’s maximum exposure is $1.5 million. Thus, if a business receives an SBA guaranteed loan for $2 million, the maximum guaranty to the lender will be $1.5 million or 75 percent. SBAExpress loans still have a maximum guaranty set at 50 percent

Business Size Limits for SBA Loans

How small must a business be to qualify for a Small Business Administration loan? In very general terms…

“To qualify as small business… a business concern eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121.” — U.S. Small Business Administration

SBA Web Site - Size Standards Information
To assist businesses with the increasingly complex subject of size standards, the SBA has recently added several resources to its Web service. Among the many resources of the SBA Office of Size Standards are:

* Tables of Size Standards - based on the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC). Also includes a handy search tool for locating NAICS codes and SIC codes.
* Guide to SBA’s Definitions of Small Business - is a complete overview of the SBA size standards program.
* Frequently Asked Questions (FAQs) - because you will have questions, you need answers.
* SBA Contacts and Representatives - humans who can answer questions the Web page cannot.
* Glossary of Terms - an essential tool.

While the exact legal size specifications are very detailed and vary depending on the loan program involved, the most commonly applied maximum size standards are as follow:

* 500 employees for most manufacturing and mining industries
* 100 employees for all wholesale trade industries
* $5 million for most retail and service industries
* $17 million for most general & heavy construction industries
* $7 million for all special trade contractors
* $0.5 million for most agricultural industries

About one-fourth of industries have a size standard that is different from these levels. They vary from $0.5 million to $25.0 million for size standards based on average annual revenues and from 100 to 1500 employees for size standards based on number of employees.