For owners ready to expand their businesses, the SBA offers management and technical assistance, business planning, financing, access to federal contracts and more.

Loan Programs

The 7(a) loan program guarantees loans to small businesses that cannot obtain financing on reasonable terms through other channels.

When a small business applies to a lending institution for financing, the lender reviews the application and decides if it merits a loan on its own, or if it requires additional support in the form of an SBA guaranty. In guaranteeing the loan, the SBA assures the lender that, in the event the borrower does not repay the debt, the government will reimburse the lending institution for a portion of its loss.

Generally, the repayment period may not exceed 25 years for real estate and other fixed assets, and no more than 10 years for other uses. For loans of less than seven years, the rate can be up to 2.25 percent above prime. For loans of seven years or longer, up to 2.75 percent above prime is permissible.

The SBA normally can guarantee as much as 85 percent on loans of up to $150,000 and 75 percent on loans of more than $150,000. In most cases, the maximum guaranty is $3.75 million and maximum loan size is $5 million.

Other Loan Programs

In addition to the 7(a) program, the SBA offers several other options to small businesses:

Small/Rural Lender Advantage // Provides loans up to $350,000, of which the SBA normally guarantees as much as 85 percent on loans of up to $150,000 and 75 percent on loans of more than $150,000.

SBA Express // Provides loans up to $350,000, of which the SBA guarantees up to 50 percent. SBA-Express loans under $25,000 do not require collateral unless it is the lender’s policy to do so.

Patriot Express // The business owner must meet eligibility requirements related to active or retired military status, or be a spouse of those military-qualified applicants. This program provides loans up to
$500,000, of which the SBA normally guarantees up to 85 percent on loans up to $150,000 and 75 percent on loans of more than $150,000.

Small Loan Advantage and Community Advantage // This program helps small business clients in underserved market areas, provides loans up to $350,000, of which the SBA can guarantee as much as 85 percent on loans up to $150,000 and 75 percent on loans of more than $150,000.

CAPLines // This financing option provides loans to help meet short-term and cyclical working capital needs. The SBA can generally guarantee up to $5 million on these loans. CAPLine funds are advanced against a company’s existing or anticipated inventory and/or accounts receivable.

Export Working Capital (EWCP) // Provides pre- and post-export working capital financing for export sales up to $5 million. In this program, the SBA guarantees up to a maximum of 90 percent of the gross loan amount.

504 Loan Program // These programs provide long-term, fixed-asset (e.g., land, building, machinery/equipment) financing through Certified Development Companies (CDC). The debentures issued to finance SBA’s part of the transaction cover 30 percent to 40 percent of the project and can be a maximum of $5 million.

Procurement Assistance

The SBA works to ensure that small businesses obtain a fair share of government contracts and subcontracts. Geography can play a part in the assistance available to expanding businesses. The HUBZone Empowerment Contracting Program has been designed to stimulate economic development by providing federal contracting opportunities to small businesses located in eligible areas. A HUBZone is a “historically underutilized business zone.” The SBA administers this program and certifies companies for eligibility.