callnow

Live Support

+1-802-778-9005

SBA Loan

Home SBA Loan

Navigation

What Does SBA Stand for?

SBA stands for the U.S. Small Business Administration. It is a government agency that supports small businesses by guaranteeing loans issued through participating lenders, such as banks or credit unions.

What Are SBA Loans?

SBA loans are business loans offered by private lenders and partially guaranteed by the SBA. These loans:

  • Have set maximum interest rates, making them a flexible and affordable option for business financing.
  • Typically require 30 to 90 days for approval and funding, so they may not be ideal for immediate needs.
  • Are backed by the federal government, reducing lender risks and enabling small businesses to access financing they might not qualify for otherwise.

How SBA Loans Work:

  1. Application: You apply through a lender, not directly with the SBA.
  2. Guarantee: The SBA provides a partial guarantee to the lender, reducing their risk.
  3. Personal Guarantee: Borrowers with at least 20% ownership in the business must provide a personal guarantee, which means personal assets may be at risk if the business cannot repay.
  4. Loan Process: Once approved, the lender manages the loan disbursement and repayment process. Borrowers make payments directly to the lender.

Types of SBA Loans:

The U.S. Small Business Administration (SBA) offers several loan programs tailored to different business needs. Here’s a simplified overview of the most common types of SBA Loans for Small business:

1. SBA 7(a) Loans

  • Purpose: Flexible funding for working capital, payroll, expansion, or equipment purchases.
  • Loan Amount: Up to $5 million.
  • Key Features:
    • Maximum SBA guarantee: 85% for loans under $150,000; 75% for larger loans.
    • Interest rates are capped by the SBA, often making these loans more affordable.
    • Repayment terms: 5-25 years, depending on the purpose.

2. SBA Express Loans

  • Purpose: Quick funding for working capital or real estate purchases.
  • Loan Amount: Up to $500,000.
  • Key Features:
    • Approval time: 36 hours or less.
    • Maximum SBA guarantee: 50%.
    • Repayment terms: Up to 25 years for real estate and 10 years for working capital.

3. SBA 504 Loans

  • Purpose: Long-term financing for purchasing real estate, buildings, or equipment.
  • Loan Amount: Up to $5.5 million.
  • Key Features:
    • Primarily funded through Certified Development Companies (CDCs).
    • Fixed interest rates, often lower than market rates.
    • Repayment terms: 10, 20, or 25 years.

4. SBA Microloans

  • Purpose: Small loans for working capital, inventory, or equipment purchases.
  • Loan Amount: Up to $50,000.
  • Key Features:
    • Geared toward startups and underrepresented groups like women- and minority-owned businesses.
    • Repayment terms: Up to 6 years.
    • Interest rates: Typically 8%-13%.

5. Economic Injury Disaster Loans (EIDLs)

  • Purpose: To support businesses in declared disaster areas.
  • Loan Amount: Up to $2 million.
  • Key Features:
    • Low interest rates (capped at 4%).
    • Repayment terms: Up to 30 years.

6. SBA CAPLines

  • Purpose: Short-term and cyclical working capital needs.
  • Loan Amount: Up to $5 million.
  • Key Features:
    • Includes four specialized lines of credit:
      • Seasonal CAPLine: For inventory and labor during peak seasons.
      • Contract CAPLine: For contract-specific costs.
      • Builders CAPLine: For construction or renovation projects.
      • Working CAPLine: For short-term asset-based financing.
    • Repayment terms: Up to 10 years (or 5 years for Builders CAPLine).

7. SBA Export Loans

  • Types:
    • Export Working Capital Loans: Up to $5 million for export-related expenses.
    • Export Express Loans: Up to $500,000 with expedited processing.
    • International Trade Loans: Up to $5 million for global expansion or modernization.

These SBA loan programs offer diverse funding options, catering to businesses of various sizes and industries, making it easier to find a solution that fits your needs.