Small Business Loans and Grants

Small Business Loans and Grants


The U.S. Federal Government is the nation's largest provider of financial assistance for small businesses!

Since 1953 the Federal Government's Small Business Administration has helped small businesses succeed, from start-up through the many stages of growth.

Many big businesses whose names are now household words -- FedEx, Intel, Nike, Apple, Ben & Jerry’s, Compaq and AOL, just to name a few -- received money from the Federal Government along the way.



Small Business Loan Programs

The Small Business Administration is Congressionally mandated to assist the nation’s small businesses in meeting their financing needs. The agency’s mall business loan programs enhance the ability of lenders to provide long- and short-term business loans to small businesses that might not qualify through normal business loan channels.

There are basically four types of Small Business Administration business loan and equity investment programs available: the 7(a) Business Loan Guaranty Program, the 7(m) MicroLoan Program, the 504 Certified Development Company Business Loan Program and the Small Business Investment Company Program.



Basic 7(a) Business Loan Guaranty Program

The 7(a) Business Loan Guaranty Program is the Small Business Administration's primary small business loan program. It is also the most flexible small business loan program, since the agency can guarantee financing under this loan program for a variety of general business purposes. In guaranteeing a small business loan, the Small Business Administration (SBA) assures the lender that, in the event the small business owner does not repay the business loan, the Small Business Administration will reimburse the small business lender for its loss. The small business owner however, still remains obligated for the full amount due.



How It Works

You submit a business loan application to an SBA participating small business lender for initial review. If the business lender approves the business loan subject to an SBA guaranty, a copy of the business loan application and a credit analysis are forwarded by the business lender to the Small Business Administration.

Following SBA approval, the business lending institution closes the business loan and disburses the funds to the small business owner. The small business owner makes monthly loan payments directly to the business lender.

No balloon payments, loan application fees or points are permitted with 7(a) business loans. The small business lender can tailor the repayment plan for each small business.

Use of Proceeds

A start-up small business or existing small business may use the proceeds of a 7(a) guaranteed business loan to —

• expand or renovate facilities;
• purchase machinery, equipment, fixtures and leasehold improvements;
• finance receivables and augment working capital;
• refinance existing debt (under some circumstances);
• finance seasonal lines of credit;
• construct commercial buildings; and/or
• purchase land or buildings.



SBA Loan Prequalification Program



The SBA Small Business Loan Prequalification Program is offered to armed forces veterans, minorities, women, exporters, rural small business owners and business owners in certain specialized industries, this small business loan program enables the SBA to pre-qualify an applicant for a 7(a) loan guaranty before the applicant goes to a bank.



504 Certified Development Company (CDC) Program

The 504 Certified Development Company Program provides growing businesses with long-term, fixed-rate business loans for major fixed assets, such as land and buildings. Approximately 270 CDCs nationwide work with the Small Business Administration and private-sector business lenders to provide financing to small businesses. CDCs are nonprofit corporations set up to contribute to the economic development of their local communities.



Low Documentation Loan (SBALowDoc)

SBALowDoc is the Small Business Administration’s quick and easy small business loan program that provides a guaranty on small business loans of $150,000 or less. You complete the front of a one-page business loan application. The agency processes completed loan applications within 36 hours.



SBAExpress Loans

SBAExpress Loans provide small business loans of $250,000 or less. The SBA provides a rapid response through its PLP processing center in Sacramento, Calif.— within 36 hours of receiving the complete application package. Lenders use their own procedures to approve and service the loans.



7(m) Microloan Program

The SBA’s Microloan Program provides very small business loans up to $35,000 to small businesses and not-for-profit child-care centers through a network of locally based intermediary business lenders.



CAPLines Loan

Through CAPLines, the Small Business Administration helps small businesses meet their short-term and cyclical working-capital needs.



Defense Loan and Technical Assistance (DELTA) Program

If you own a defense-dependent small business that has been adversely affected by defense cuts or that is located in a defense-impacted community, the DELTA Program can help you diversify into the commercial market.



CommunityExpress Loans

The CommunityExpress Loans pilot program is designed to spur economic development and job creation in untapped rural and inner city communities by providing small business loans in low and moderate income urban and rural areas.



Community Adjustment & Investment (CAIP)

CAIP loans are intended to create new, sustainable jobs and preserve existing jobs in businesses at risk due to changing trade patterns with Canada and Mexico.



Export Working Capital (EWCL) Loan

The EWCP provides short-term loans to small businesses for export-related transactions. Under the EWCP, the SBA can guarantee up to 90 percent of a secured loan or $750,000.



International Trade Loan (ITL) Program

The International Trade Loan Program provides small business loans to businesses engaged in international trade, prepared to engage in international trade, or adversely affected by competition from imports.



Energy & Conservation Loan

Small business loans are available for businesses engaged in engineering, manufacturing, distributing, marketing, and installing or servicing products or services designed to conserve the nation’s energy resources.



Pollution Control Loan

This program provides small business loans to businesses that are planning, designing or installing a "pollution control facility". Unlike the Energy Conservation Loan, the Pollution Control Loan is for the end-user of the pollution control facility.



Qualified Employee Trusts Loan

The Small Business Administration can guarantee 7(a) business loans to employee trusts that are part of a plan sponsored by their employer, and qualify under the Internal Revenue Code as an (Employee Stock Ownership Plan) or the Department of Labor (under the Employee Retirement Income Security Act). Loan proceeds may be used by an employee trust for a growth and development loan, whereby the trust re-lends the loan proceeds to the employer by purchasing qualifying securities in the employer's business; or a change of ownership loan, whereby employees acquire controlling interest in the employer's business. Collateral for the loan includes the assets of the employer's business.



SBA ExportExpress Loans

SBA ExportExpress Loans may be used for most export-related business purposes.



Small Business Grants



Small Business Innovation Research (SBIR) Program



Under the Small Business Innovation Research (SBIR) program, 10 federal agencies having annual external research and development requirements of more than $100 million, must reserve 2.5% of these funds for award to small businesses.



Small Business Technology Transfer (STTR) Program



Under the Small Business Technology Transfer (STTR) program, five agencies with annual external research and development budgets of more than $1 billion, must reserve .15% of these funds for award to collaborative efforts between small businesses and non-profit research institutions.



Venture Capital



Small Business Investment Companies (SBICs)



Small Business Investment Companies (SBICs) put venture capital, in the form of small business loans and equity financing, into small businesses for growth, modernization and expansion. SBIC's are investment companies licensed by the Small Business Administration. They make venture capital investments and long-term small business.




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Business Loan Information Site Map


Government Grants & Loans For Small Businesses!
The U.S. Federal Government is the nation's largest provider of financial assistance for small businesses!



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