Small Business Administration Loans

Understanding the services of the Small Business Administration loans and financing is very important.  SBA is the Federal Government’s independent agency that provides assistance to US small businesses in areas of procurement, advocacy, management and financial assistance.

Small Business Financing is issued through SBA's Guaranteed Loans investment programs, loans for small business, disaster loan programs, and also contractor’s bonding. Also, Sub Loans and Small Business financing are significant areas of assistance. 


The main aim of the Small Business Administration is to strengthen and maintain the economy of the US by counseling, aiding, protecting, and assisting the interests of small businesses and by helping businesses and families to recover from national disasters.

Important Note

It is important to note that the Small Business financing programs of the Small Business Administration offer assistance and loans for small business that may not be able to qualify for any assistance and loans through the traditional banks and lending sources. If a business can get funds on good reasonable terms from these traditional banks and other sources, then the Small Business Administration may not guarantee a small business loan.

Basic Type of SBA Loan Programs

The three basic type of (SBA) Small Business Administration Loans programs are:

1. The Basic Section 7(a) – Loan guaranty program – which helps small business financing when the business is not eligible for loans through traditional banks and lending sources. Loans under this program are only available on a “guaranty basis” on a portion of the loan. This guaranty will protect against default in payment.  
2. The Section 7(m) loan program is a Micro Loan program. The Section 7(m) Microloan program features short-term loans of up to $35,000. This loan is applicable to small businesses and not-for-profit child-care centers and can be used for working capital or purchase of inventory, supplies, and equipment.  
3. The SBA 504 Loan Program is the Certified Development Company Program. It is intended to help small and medium-sized businesses. This is a long-term loan with fixed rate financing for investing in fixed assets. The objective behind this program is to increase employment opportunities.

To get a loan under any of the loan programs you must meet all criteria and submit an accurate application. The SBA uses the usual Basic Section (7a) criteria for eligibility which are designed to cover a large number of needs of small business financing.

All Small Business Administration loans application should explain in detail the following 7(a) Loan programs criteria:
        Type and size of business
        Use of finances
        Repayment plans
        Other available funds

The following criterion also qualifies a small business to be eligible for the loan assistance:

         Construction – annual receipts and sales of three years

        Mining and Manufacturing: 500 employees or less

         Service or Retail: three year annual receipts and sales

         Special Trade Contractors: up to $14million

         Wholesale: 100 employees or less

         Agriculture: up to $75million



Please be aware that small business loan applications from religious, charitable, and non profit organizations, gambling and illegal activities, lending, etc are not eligible for the small business loans.

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