Updated October 21, 2021
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What Is an SBA Loan?
The Small Business Association (SBA) has worked with lenders to create guidelines for SBA lenders, reducing the risk of lending to small businesses and making loans more accessible to small businesses. Getting a loan from an SBA lender gives you peace of mind knowing that you have the added protection of loaning guidelines set by the SBA.
What Is a Paycheck Protection SBA Loan?
The Paycheck Protection Program (PPP) is an SBA loan designed to help small businesses cover their employees’ paychecks. A PPP SBA loan encourages small businesses to hire and keep employees on their payroll without the fear of paying them if their business is struggling. The Paycheck Protection Program is designed to help small businesses and protect employees.
What Is an SBA7 Loan?
SBA7 loans are one of the most popular SBA lending programs available. SBA7 loans can grant your business up to $5 million, which can help purchase and renovate a storefront for your business.
The SBA7 loan has its own set of requirements, and not all companies are eligible for these loans. The main factors that contribute to which companies are eligible for the SBA7 loan are your business’ credit history, how your business generates income and the location of your business. To thoroughly look at which companies are not eligible for the SBA7 loan, you can read this list.
Not sure if you qualify? Talk to your SBA lender to go over the options available to your business so you can find the loan that best suits your needs.
SBA Requirements - How to Qualify
To qualify for an SBA loan, you need to have a for-profit business operating in the United States, have invested equity (i.e. time and money) into your business, and exhausted all other financing options. If you cannot get a loan from other lenders, your business may be eligible for an SBA loan.
Not sure if you qualify? Reach out to an SBA lender to discuss your options.
SBA Loans: In Conclusion
Before the SBA created these loaning guidelines, finding a lender willing to take a chance on loaning to a small business was difficult. Start-up costs for businesses are a significant investment, and lenders aren’t likely to approve loans if they’re not sure you will be able to repay. With SBA loans, the risk of loaning to a small business has been alleviated, so lenders are more comfortable giving loans to smaller businesses.