The Small Business Administration offers many resources, tools and opportunities for small business owners. The 7(a) loan program is the flagship SBA loan offering, but it’s not the only option for business owners. If you’re unsure whether SBA loans fit into your business model, learn more about what they are, who is eligible and how to apply.

SBA Loan Types

First things first, the SBA doesn’t actually issue the loan to entrepreneurs. The loan program is a guarantee to lenders for the money that is lent. If the business owner defaults on the loan, the SBA pays a portion of the money back to the lender. This doesn’t let the business owner off the hook for the loan, but it does reduce the risk to the lender which levels the playing field. SBA loans are traditional commercial loans backed by a guarantee.

SBA loans can be used for many different purposes, from working capital to refinancing existing debt. The type of loan you request depends on many factors. You can even obtain financing for assistance with disaster recovery. Smaller loan amounts are also available. Fees and rates for SBA loans are usually very favorable and competitive. Veterans, minorities and women may receive even better terms. You should discuss your needs with your lender.

Eligibility

The SBA has eligibility requirements for loans. Typically, your business must not have more than 500 employees and less than $7 million in annual revenue. You may also need two years history in business or experience in the industry. Credit factors will also be taken into consideration.

How to Apply

SBA loans are only available to lenders who meet the SBA requirements. The SBA offers a loan preparation checklist that you can work through before you apply. You will need to prepare your paperwork and business to present it at its best.

Contact JNI Lending today about SBA loans to see if one is right for your company.