Do you need money for your small business? We have the scoop on how the SBA helps business owners access loans and other options to fund your business.
Fund Your Business Through the SBA
While the Small Business Administration rarely provides loans except in the case of a disaster, they work with outside lenders to provide the monetary means for small businesses to grow. Of course, this isn’t all the SBA does. They offer business counseling, online learning, and guidance for landing government contracts. They’re responsible for initiatives like National Small Business Week, The Council on Underserved Communities, and Small Business Saturday.
However, the number one thing small businesses need to thrive is funding. The SBA guarantees loans through lenders, ensuring you get competitive terms with low down payments and, in some cases, no collateral.
Three Types of SBA Loans to Fund Your Business
Need real estate for your business? This is probably the loan for you. It has a maximum borrowing amount of $5 million for working capital, expanding or acquiring a business, purchasing business equipment, renovating, or (occasionally) refinancing.
Again, the maximum amount for this loan is $5 million. Your focus for this type of loan should be job creation or business growth, such as improving existing facilities, purchasing new facilities, buying long-term machinery, and improving energy efficiency fit the bill. However, it cannot be used for capital, refinancing, or speculation.
As you may have guessed, Microloans are much smaller loans than those mentioned above. These are available for up to $50,000. While it can’t be used to pay existing debts or purchase real estate, their uses are relatively flexible. Use them for capital, inventory, fixtures, equipment, and more. Microloans are provided through SBA funding intermediaries, which often have their own loan requirements.
Most loans available through the SBA have the following requirements:
- You have a small, U.S.-based business.
- The business is for-profit.
- You have invested equity and used personal assets to fund your business.
- The business needs funding.
- You are not delinquent on any other U.S. debt obligations.
The SBA also offers grants. Some grants are available to non-profit, community, and educational organizations. These are typically to help aid in creating future entrepreneurs rather than businesses. However, they do offer some business grants, like COVID-19 relief, the STEP program, America’s Seed Fund, and the 7(j) program.
Other Helpful Resources to Manage and Fund Your Business
IncFile helps ensure your company stays by the book. If you need to form a corporation, LLC, or non-profit, or if you need to make an amendment, obtain EINs, or acquire a business license, IncFile can help. They also provide several tips and business tools for free.
Nav helps match your business with loans, so you have a higher chance of approval and less of a chance of wasting valuable time. They offer the same services for business credit cards and accounts.
This business finance software is designed to save you time and money. Ramp specializes in business credit cards and provides unlimited cards with spend controls, accounting integration, receipt matching, travel automation, and real-time reporting.
SellersFunding specializes in short-term loans and revenue advances for sellers with marketplaces like Amazon, Walmart, eBay, Shopify, etc. Get approved in less than 48 hours and often as quickly as one minute.
UpLyft Capital is a rapid funding option that specializes in business loans, personal loans and lines of credit, sometimes same or next day. This is a great option with much looser requirements than other lenders.
As a U.S. government agency, the Small Business Administration has a certain amount of clout in helping small businesses succeed. However, they aren’t the only organization eager to help small businesses obtain funding, organize finances, and manage the tedious tasks that come with business ownership.