SBA Loans Explained

SBA 7(a) Loan Video Final ScriptOctober 2012SBA’s primary program, the 7(a) Loan Program, helps finance start-up and existing smallbusinesses when they can’t get financing from other sources or from a lender who won’tmake a loan without an SBA guarantee. It’s SBA’s most basic and popular loan program,offering flexibility, longer terms and potentially lower down payments compared to other financingoptions. These loans are not funded by the SBA directly, but banks receive a guarantee that the SBAwill repay a portion of the loan if the business defaults on payments. This lets small businesses get loan amounts to fund startup costs, equipment, inventoryand working capital. Loans made through the program may be used to start a new business or to acquire, expand,export or continue operating a current business. Specifically, they can be used to purchase new land or equipment, including constructioncosts or repairing existing capital, purchase an existing business, refinance existing debt,purchase equipment, machinery, furniture, fixtures, supplies or materials, fund short-and long-term working capital needs. The 7(a) Loan Program also helps small businesses in traditionally underserved markets. To help drive growth and job creation, the SBA is committed to expanding small businessaccess to capital in underserved communities. These initiatives offer a more efficient applicationprocess for minority-, women-, or veteran-owned business, or a company in a lower-income orrural area. To be considered eligible for the SBA 7(a) Loan Program, businesses must operate forprofit, have reasonable owner equity to invest, do, or propose to do business, in the UnitedStates or its possessions, and use other financial resources, including personal assets, beforeapplying for a loan. Contact your local SBA District Office for a list of participating lenders in your area. Visit sba. gov/loanprograms to learn more about how the SBA helps small businesses get financing.

SBA Loans Explained