How to Get a 7(a) SBA Small Business Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Business |
| Lender: | Government |
| Secured: | No |
A 7(a) SBA small business loan is a loan that is guaranteed in part by the United States Small Business Administration (SBA). The SBA offers numerous loan programs to assist small businesses; although the actual lending is done by private and commercial financial institutions. The 7(a) loan guaranty is the most basic loan offered by the SBA. It was put in place to help small businesses obtain financing when they might not be eligible for business loans through normal lending channels. If financial institutions perceive one particular business to be too risky for lending, an SBA guarantee can help provide assurance.
The basic 7(a) loan is the SBA's most flexible business loan program and loans can be approved for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building, leasehold improvements, and in some cases debt refinancing. Loan terms are available for up to 10 years for working capital and up to 25 years for fixed assets.
Who it's for
Many small businesses find themselves in need of a small business loan at one time or another for a variety of reasons, and an SBA basic 7(a) loan can help. This type of loan is designed for a small business owner with either a start-up or existing business and is meant to be used in conjunction with commercial lending institutions. An SBA small business loan is particularly helpful for those who cannot find financing through regular avenues of borrowing.
What you need to do to apply
Applicants for an SBA small business loan must apply through a participating SBA commercial lender. The lender will move the paperwork through the SBA and provide approval for the loan, as well as administer it. A statement of personal history is obtained from each applicant to determine willingness and ability to repay debt and abide by law. Applicants should have good character, management capability, collateral, and owner's equity contribution.
Apply for a 7(a) SBA Small Business Loan
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