SBA Loans
Government SBA Loans

SBA loans are funded by approved lenders. The SBA 7(a) program is the most common SBA loan. Funds may be used to:

  • Expand or renovate facilities
  • Buy machinery, equipment, fixtures, buildings and land for business
  • Finance receivables and increase working capital
  • Finance seasonal lines of credit
  • Construct commercial buildings.

Sometimes the loans can also refinance existing debt. To qualify for a loan you cannot be a non-profit or a business involved in lending, real estate development, investments or speculation, and you cannot exceed the size requirements. These requirements depend on your type of business.

Manufacturing 100 employees
Wholesaling 100 employees
Services and retailing $6.5 million in receipts
Construction $31 million in receipts
Agriculture $750,000 in annual receipts

    SBA requirements

  • Good character
  • Management expertise and commitment to succeed
  • Reasonable personal contribution or business equity
  • Feasible business plan
  • Sufficient collateral (although loans are not declined for insufficient collateral)
  • Ability to repay loan from projected operating cash flow
  • Paperwork required

  • Purpose of loan
  • Business history
  • 3 years of financial statements (if existing business)
  • Schedule of debts
  • Aging of accounts receivable and payable (if existing business)
  • Projected opening-day balance sheet
  • Any leases
  • Amount of owner investment in business
  • Projections of income, expenses and cash flow
  • Signed personal financial statements
  • Personal resumes
  • Personal guarantees from principals owning 20% or more of the business.

To apply for an SBA loan, click on the "SBA approved lenders" link. These are Preferred Lenders, who can provide a response to complete loan applications in one day. The loans can be up to 10 years for working capital; up to 25 years for fixed assets. The interest rate typically cannot be greater than prime plus 2.75%.

SBA MicroLoans

    Microloans are loans up to $250,000 funded for:

  • Machinery, equipment or fixtures
  • Leasehold improvements
  • Inventory
  • Working capital

The loans are issued through non-profits which also provide free technical and management assistance.

The microloan issuer in your state is:

Buying a Franchise?

The SBA has a streamlined loan application process for franchises listed on the Franchise Registry.

Click here to go to the Registry

If your franchisor is listed, you should obtain a "Certificate of No Change or Non-Material Change" from the franchisor. Provide this to the bank where you are seeking an SBA loan. This will eliminate the need to review all the franchise documents for SBA eligibility.