SBA Loans Programs

A majority of small business owners who start with their venture would need help in terms of raising capital or funds for the operations of the business. In fact, based on a recent study, about 59% of business owners admitted that they needed loans to grow and expand their business; only a sheer 21% were confident that they can do it on their own.

Many people look at loaning to be a sign of weakness and failure, when in actual reality, it is not. Borrowing money is a form of style to raise funds. Borrowing money doesn’t necessarily mean that you’re broke or your business is failing – it’s sometimes needed.

Loan Programs Offered by the SBA

That being said, the financing programs and agencies, just like what the Small Business Administration (SBA) is and what they offer, is an integral part of a business’s life and journey. The SBA has different loan programs that business owners can take advantage of.

These loan programs have their own goal – each of them has a specific set of uses that business owners can choose from. For instance, if a business owner needs to purchase equipment or land, there’s a specific loan for that – if a business owner needs to borrow just a little bit of funds, there’s a program for that.

The following are the SBA loan programs that the agency offers:

• SBA 7(a) Loans
• SBA Disaster Loans
• SBA CDC or the 504 Loan Program
• SBA Microloans
• SBA Export Loans
• SBA CAPLines

All of these SBA loans programs have their own uses – and let’s try summarizing them one by one so you get the idea of what these loans are for.

SBA 7(a) Loans

This loan is the most common business loan offered by the SBA. It provides a working capital of up to $5 million. The business owner holds the decision on what he or she will do with it – for expansion, purchasing of assets or properties, etc.

SBA Disaster Loans

The disaster loan is the loan program that is given and granted to businesses that have been affected by any type of disaster. Homeowners can avail this loan too if they’re in the area where the disaster hit.

SBA CDC or the 504 Loan Program

In this SBA loan program, the owner’s goal is to purchase commercial real estate. It uses 10% or the downpayment coming from the borrower; 40% from the CDC, and about 50% from private lending companies (SBA).

SBA Microloans

From its term, this is the type of small loan that business owners need – and it’s in the form of being provided a small working capital.

SBA Export Loans

Specifically, this loan is for businesses that have plans of going offshore. If they need to finance activity out of the country, this is the best loan.

SBA CAPLines

If you need a line of credit that is revolving, this is the perfect type of loan program for you that the SBA offers. It’s simple and it’s a revolving line.

The Big Problem

Taking out and applying to any of the loan programs that the SBA provides is a good way to jumpstart a business or to fund an existing business. It actually can be considered as the best loan business owners can apply to. The big problem with it is the fact that it’s hard and difficult to qualify and to become eligible for any of their programs.

Most usually, only the best of the best candidates are the ones that are approved for a loan. Newer businesses as well as those with a not-so-good standing are left behind.

If you unfortunately fall under that category, don’t worry – we here at SoFlo Funding are always ready to help. We have loan programs that are close to what the SBA has and we can place low interest rates for these loans as well!