Alternative Financing Options. David Lewis Brunswick SBDC. Small Business Administration Loan Programs. Primary SBA Business Loan Programs. 7(a) 504. 7(A) Loan Guaranty Program
The 7(a) Loan Guaranty Program is the SBA’s primary lending programs. It provides loans to small businesses unable to secure financing at reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans that are, in turn, guaranteed by the SBA — the Agency has no funds for direct lending or grants.
-The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities
-The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
-Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
-Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
-Financing against existing inventory and receivable under special conditions
-The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions
-To purchase an existing business
SBA loans cannot be used for these purposes:
-To refinance existing debt where the lender is in a position to sustain a loss and SBA would take over that loss through refinancing
-To effect a partial change of business ownership or a change that will not benefit the business
-To permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business's continuance until the loan supported by SBA is disbursed
-To repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow
-For a non-sound business purpose
SBA's Express programs offer streamlined and expedited loan procedures for particular groups of borrowers, notably active duty military personnel, veterans, and borrowers from distressed communities.
The SBAExpress program gives small business borrowers an accelerated turnaround time for SBA's review. You will receive a response to your application within 36 hours.
The Community Express loan program allows approved SBA lenders to provide a unique combination of financial and technical assistance to borrowers located in the nation’s underserved communities. Eligible communities include the SBA’s Historically Underutilized Business Zones (HUBZones) and those communities identified as distressed through the Community Reinvestment Act (CRA). To encourage small businesses start-ups, the SBA makes eligible loans of $25,000 or less, regardless of where your small business is located. Sunsets April 30th 2011.
The U.S. Small Business Administration has the SBA’s Patriot Express Pilot Loan Initiative for veterans and members of the military community wanting to establish or expand small businesses. The SBA and its resource partners are focusing additional efforts on counseling and training to augment this loan initiative, making it more accessible and easy to use.
The 504 loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A Certified Development Company (CDC) is a private, nonprofit corporation which is set up to contribute to economic development within its community. CDCs work with SBA and private sector lenders to provide financing to small businesses, which accomplishes the goal of community economic development.
NADCOis the trade association of Certified Development Companies (CDCs) - companies that have been certified by the Small Business Administration (SBA) to provide financing for small businesses under the SBA 504 Program.
The Microloan Program provides small, short-term loans to small business concerns. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries make loans to eligible borrowers. The maximum loan amount is $50,000, but the average microloan is about $13,000.
How Microloan Funds May Be Used
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