06/ 07/ 2006
by Emily McMackin
Finding help from the SBA
Has your loan request hit a dead end with the bank? The Small Business Administration offers loans for start-ups and small businesses that may not be eligible for financing elsewhere. With a portfolio of 219,000 loans totaling $45 billion, the SBA is one of the biggest drivers of small-business growth in the country, according to a recent study by the Federal Reserve Bank of Atlanta. If you're feeling cash-strapped, the SBA might be a good funding source. Three of its main programs include:
- 7 (a) Guaranty Loan Program: Geared toward start-ups and businesses with a variety of needs, this loan program, the SBA's most flexible, guarantees financing for working capital, machinery and equipment, furniture and fixtures, leasehold improvements, debt refinancing and the purchase of land or a business as well as renovation and construction of buildings.
- 504 Certified Development Company Program: Wanting to acquire real estate, machinery or equipment to expand or modernize your business? This loan program offers long-term, fixed-rate financing for businesses furthering economic development in their areas. Administered by nonprofit certified development companies through commercial lenders, 504 loans are financed 50 percent by the bank and 40 percent by the CDC and require a 10 percent contribution from the business owner.
- The Microloan Program: Available in most states through community-based, nonprofit lenders, this loan program provides short-term loans of up to $35,000 for newly established and growing small businesses needing working capital or funds to purchase inventory, supplies, furniture, fixtures, machinery and/or equipment. In addition, lenders are required to provide microborrowers with business-based training and technical assistance.
To learn more about these and other programs and to find out how to apply, go to www.sba.gov.
