SBA Loans
What is the SBA?
The SBA or Small Business Association is a government loan program that was establish July 20th, 1953, with the express purpose of assisting small business with their financial needs. As worded by congress, the SBA’s main function was to, “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.” This congressional act also ensured that small business would have as much of a chance as other companies to obtain government contract work and participate in the purchasing of surplus property. Through out its history, the SBA has established several different types of loans to help meet the specific needs of small business throughout the country.
SBA Loan Programs
Today the SBA operates primarily as a “guarantor of loans made by private and other institutions.” They do however offer good, sound advice for small business and different loan programs. Three different loan programs available through the SBA are a Certified Development Company (CDC) Loan a Microloan, and a Basic 7(a) Loan.
The CDC loan program is perfect for companies that need assistance in establishing the bones of their company. This loan will help business owners purchase land, equipment, or any sort of machinery that will help to establish or modernize their company. The loan is generally obtained through a private lender and then guaranteed through the SBA.
The Microloan is a program designed specifically for small businesses and non-profit childcare businesses. The monies obtained from a Microloan are intended to be used as start-up funding or for the purchasing of supplies, furniture, or equipment. This loan is not intended to be used for the purchase of real estate. The Microloan is perfect for smaller businesses and non-profit childcare businesses that are just starting up or are needing a little bit of extra money to technologically advance their company.
The Basic 7(a) Loan is the most popular and widely used loan program provided by the SBA. The loan could easily be described as a blanked loan, as it is the most diverse loan program, offering help to many different types of small businesses. Under this program, the loans themselves are obtained from a bank or other loan provider and guaranteed (at least in part) by the SBA. The general eligibility requirements for the Basic 7(a) Loan are: your business must be for profit, your business must be in or ready to begin business, your business must have some owner equity for investing, your business must be located with in the United States or one it possessed land areas, and your business must use other means of financing (personal money included) before inquiring after a Basic 7(a) loan. Monies obtained from a Basic 7(a) Loan are intended to be used for such things as:
* Buying land and buildings and covering any construction costs incurred while making it ready for your business operations.
* Buying equipment, furniture, fixtures, supplies and anything else necessary for the establishing and running of your business.
* “Long Term Capital” so you can pay employees while getting started and buy the necessary inventory for the opening of your business.
The SBA is a great resource for small business owners and offers a plethora of information, guidelines, requirement and rules for anyone seeking financial assistance. While they them selves do not offer loans, they are a helpful establishment intent on seeing small business succeed, not a bank. For detailed information, counseling, advice or just general information on how to get an SBA guaranteed loan visit their site at: www.sba.gov.
