Program Description
The primary financial assistance program for small businesses provided by the Small Business Administration (SBA) is the 7(a) loan program. This program, named after section 7(a) of the Small Business Act, is the most commonly utilized among the SBA's business loan programs. It enables the SBA to offer loan guarantees to SBA lenders who collaborate with American small businesses. Small business owners engage directly with these lenders rather than with the SBA itself. The program is tailored to support for-profit businesses that encounter difficulties securing financing from alternative sources.
Program Requirements
The SBA offers loan guarantees to lenders who then lend money to businesses, including sole proprietorships.
In order to qualify for funding through the SBA's 7(a) loan program, the business applying must satisfy all of the following requirements:
Meet the SBA's size standards
Operate for profit
Lack the internal resources (business or personal) necessary to secure financing, and
Be able to demonstrate the ability to repay the loan.
Some versions of the SBA's 7(a) loan program may have additional eligibility criteria. These specific programs will outline any extra requirements.
Loan Terms
The loan term for real estate can be up to 25 years, while for working capital, inventory, equipment, or other business assets, it can go up to 10 years. The maximum loan amount available is $5 million. For additional details, please refer to the SBA’s 7(a).
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