SBA Loan Options that Can Help Small Businesses Grow

SBA loans have helped entrepreneurs grow their businesses for decades. Through an SBA loan, the Small Business Administration guarantees a portion of the loan, while the lender handles the actual money. With a guarantee behind it, banks are more likely to loan to risky, smaller businesses. Smaller businesses tend not to have the financial power to obtain a traditional loan.

When it comes to SBA loans, there are different options. Every business has different standards and qualifications so it’s important to know the difference so that you can choose the one that fits.

SBA 7(a) Loans

This loan is one of the most common. It offers low down payments and a longer term. This provides startup businesses with the chance to expand and to manage cash flow. The SBA 7(a) requires three years of business tax returns and two years of personal tax returns if the principal has more than a 20 percent stake.


A long-term fixed rate SBA loan finances assets like equipment or real estate. When it comes to real estate, the business owner has to occupy at least 51 percent of the asset, cannot have more than 500 employees or have sales over six million dollars.

SBA Express Loans

SBA express loans offer long-term financing for working capital. If your business is older than 18 months then you can use up to 350,000 dollars for financing working capital or buying equipment. If you need a loan that is under 100,000, you do not have to prove income.

Community Advantage Program

This program helps businesses in under-served markets. The program provides access to the 7(a) guaranties that are as high as 85 percent for loans up to 250,000 dollars. The borrower does have to prove creditworthiness but the qualifications are not limited by the borrower’s balance sheet.

Microloan Program

The microloan program helps small businesses start up or expand. It provides up to 50,000 dollars, but most loans are about 13,000 dollars. You can use the loans for inventory, supplies, working capital or furniture and machinery. You cannot use the microloan to pay off existing debts or to pay for real estate.

An SBA loan helps small businesses out when cash flow is low or when they need the funds to expand. When it comes to running a business, you have to put money in to get anything out of it. SBA loans allow you to do just that without worrying about traditional bank loans.


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