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A group of SBA loans which guarantee portions of the total amount, cap interest rates, and limit fees. SBA’s most common loan program, which includes financial help for businesses with special requirements.
The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is a good option when real estate is part of a business purchase, but it can also be used for:
The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.
To be eligible for 7(a) loan assistance, businesses must:
Some businesses may not qualify for a 7(a) loan. Read more about Terms, conditions, and eligibility.
Basic uses for the 7(a) loan include:
The contents of the loan application generally vary depending on the size of the loan and the lender's processing method. When you’re ready to apply, begin the process by working with your lender to determine which documents they will require you to provide.
The loan application documents required will generally include SBA Form 1919, Borrower’s Information Form. Use the following checklist to ensure you are prepared if your lender asks you for any of the following information:
If you are buying an existing business, gather the following information (required):
You may be required to submit more SBA forms based on the specific use of proceeds or fees paid on a loans package or to a broker or agent.
Loan repayment terms vary according to several factors.
Existing borrowers can create an account in the MySBA Loan Portal (lending.sba.gov) to monitor their loan status, view statements, payment history and more.
Payments can only be made using the MySBA Loan Portal for SBA-purchased 7(a) loans. All others can continue to set up and manage online payments at Pay.gov.
A Long-term, fixed rate financing of up to $5 million for major fixed assets. dd an answer to this item.
The 504 Loan Program provides long-term, fixed rate financing for major fixed assets that promote business growth and job creation.
504 loans are available through Certified Development Companies (CDCs), SBA's community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by SBA.
The maximum loan amount for a 504 loan is $5.5 million. For certain energy projects, the borrower can receive a 504 loan for up to $5.5 million per project, for up to three projects not to exceed $16.5 million total.
To be eligible for a 504 loan, your business must:
Other general eligibility standards include falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.
Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.
A 504 loan can be used for a range of assets that promote business growth and job creation. These include the purchase or construction of:
Or the improvement or modernization of:
A 504 loan cannot be used for:
504 loans are available exclusively through Certified Development Companies (CDCs). Find a CDC in your area to ensure you are dealing with a qualified lender. CDCs are uniquely qualified to understand 504 loan program regulations, and will help you navigate the lender channels to create your project financing.
Smaller-size loans of up to $50,000 provided through SBA funding intermediaries.
The microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.
SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers.
Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.
Microloans can be used for a variety of purposes that help small businesses expand. Use them when you need less than $50,000 to rebuild, re-open, repair, enhance, or improve your small business.
Examples include:
Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.
Microloans are available through certain nonprofit, community-based organizations that are experienced in lending and business management assistance. Individual requirements will vary.
To apply for a microloan, work with an SBA-approved intermediary in your area. SBA-approved lenders make all credit decisions and set all terms for your microloan.
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