SBA Financing 101: The Complete Guide to SBA 504 Loans

SBA Financing Basics

The US small business administration was created to help small business get started and stay afloat during recessions. Founded in 1932 after the great depression, its purpose was to help small businesses.  It has been doing this for nearly a century throughout many recessions and booms.  Here are two basic facts to know about how the SBA operates.

• The SBA does not advance loans directly to small businesses.

• The SBA promises banks and other lenders to pay back a portion of the loan if the small business defaults on the loan as a way to encourage lenders to make loans to small businesses.

Types of SBA Financing options

7(a) loan program: This program is used primarily for the refinancing existing loans or the purchase of equipment.

Export-assistance loans: This program is for financing to assist with exporting goods.

CAPLine: This program is used for financing that is only required seasonally.

CDC/504 loans: This program is for the purchase of major assets such as real estate or expensive equipment.

Disaster recovery loans: This program is used for rebuilding a business after a natural disaster.

Microloan program: This program is meant for small business loans in increments under $50,000.

SBA Express: This program is meant for smaller business loans of up to $350,000.

To help you decide which SBA Financing option is a good fit for your business, consult a financial professional or the SBA loans wizard.

Applying for an SBA financing program

• Discuss your businesses eligibility for each type of loan with your lender and your local SBA District Office.

• Prepare all the basic information for your loan with the SBA’s loan application checklist.

• Work with your lender to complete the application process for the SBA financing option of your choice.

For more information on SBA financing please contact Muth Capital.

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