Every business owner needs to know what our government offers in the term of start up business loans from the federal organization US small business administration. Here are answers to the most frequently asked questions about SBA loans.
What is an SBA loan?
While the term SBA loan is singular, it refers to a group of loan types that small business administration offers. Here are the types of SBA loan programs:
- General small business loan (7a) – this is the loan that most people commonly refer to for helping businesses with special requirements, such as loan program eligibility, use of loan proceeds. There also special types of these loans for firms that have been affected by NAFTA – North American fair trade act and for businesses to set up employee stock ownership plans, plus to help companies implement green business practices for pollution control.
- Micro loan program – these are small capital and shorter-term programs for small businesses and for particular types of childcare centers that are not-for-profit. The limit is up to $50,000, and the average loan is about $14,000.
- Real estate and equipment loans CDC/504: these SBA loans are for financing major assets such as business equipment and property.
- Disaster loans: the SBA will provide loans for firms that were negatively impacted by disasters such as floods, hurricanes, and other occurrences. These loans are open to businesses of all sizes, nonprofit organizations, homeowners, and even renters. The loan proceeds will be for repairing or replacing items such as real estate, personal property, manufacturing machinery and business equipment, plus inventory and other miscellaneous business property.