Using the government as a medium for obtaining financing for your business is a great avenue and works for many business owners. As an independent federal agency, the SBA (or Small Business Administration) plays a key role in providing financing to American businesses. We work directly with SBA lenders on a number of key initiatives for assisting you in the financing process.
SBA Express Loans
Small startup or home-based businesses can find loan advantages through the SBA when seeking assistance and financing for less than $100K. Funding can be procured quickly and typically does not require proof of income, offers more flexible loan terms and even a convenient line of credit for working capital emergencies. With the SBA express, loans can be as high as $1 million.
SBA Express loans are typically used for equipment and machinery finance, business acquisition, franchise startup, inventory and general working capital needs.
The Community Advantage Program
The SBA Community Advantage Program or CAP was implemented as a pilot program by the SBA in an effort to increase the total SBA 7(a) loans to underserved communities. The initiative is meant to target areas where need-based lending, coupled with business financing could help provide financing to companies who may have previously been unable to to access funding. The CAP process can be completed quickly. It only requires a couple page application and can provide funding for up to $250K.
SBA 7(a) Lending
As the most frequently used SBA program, 7(a) loans are typically used to establish new companies, fund acquisitions of existing businesses, finance operational needs or assist in business growth. As a government-assisted loan, SBA 7(a) loans provide loan amounts up to $5 million. Lending institutions are also incentivized on 7(a) loans. Loans <$150K or 85% guaranteed by the federal government and loans >$150K are 75% guaranteed.
For more fixed-rate, long-term financing the SBA 504 loan is a great option. This loan type is typically used to acquire fixed assets for modernizing equipment and expanding existing operations. Such loans are typically used to acquire fixed assets such as property, plant and equipment. As a rule, 504 SBA loans are restricted from using funds for working capital, debt consolidation or inventory. Loan amounts can go as high as $2 million are are typically secured by the underlying asset involved.