The Small Business Administration (SBA) does not actually extend loans itself to small businesses; instead it offers a guarantee to the lending institutions on behalf of an applicant, so the loan is much likelier to be approved by the lender. These guarantees do not usually cover the entire amount of any loan, but only up to a specific percentage, and in the event that a borrower defaults on the loan, the SBA would then pay that percentage of the loan back to the lender.
Most popular SBA loans
There are a number of loan programs offered by the SBA, to suit the different business needs of potential borrowers. They also have different maximum amounts, and are used for a number of business purposes.
The cornerstone loan of the SBA loans program is the SBA 7(a) loan, which is probably the most flexible loan in the whole system, because it can be put to so many business uses. Many businesses use the working capital form a 7(a) loan to secure new furniture or equipment, building or property, and in some cases, even for refinancing prior debts. This type of loan is extremely popular because most for-profit businesses are eligible for it, they are committed to doing business within U.S. borders, and they have at least some funding of their own to invest in their businesses.
CDC 504 loans are special SBA loans which include money lent by a Certified Development Company, which is a non-profit organization dedicated to community service and growth. The other portions of the loan come from a private lender and a 10% contribution from the borrower. These kinds of loans are aimed at helping businesses secure facilities at which they can conduct a ‘brick and mortar’ storefront business.
SBA 7(m) micro loans are low-value SBA loans not to exceed $35,000, and are intended to help small businesses secure furniture, inventory, and other supplies necessary for the conduct of business.
SBA loans with GrowthCC
Bring your SBA loan guarantee to GrowthCC, and let us supply your business with the capital it needs for almost any purpose that will lead to growth and future success. Contact us today to find out how we can finance your SBA loans and keep you competitive in the marketplace.