SBA Week Guide

An SBA loan is a loan backed by the Small Business Administration. While they operate like traditional loans and are accessed through private lenders, SBA loans often have lower credit and revenue requirements and have interest caps, making them an affordable way to borrow if you qualify. 

Real estate loans can finance a lease or a piece of property your business uses. This can be used for anything from office space to rental units, depending on the exact loan terms offered. Lenders tend to look at the property’s potential income when assessing your loan eligibility, making credit less of a factor than with other loans. 

Business credit cards offer a revolving credit line for business expenses such as travel, inventory, meals and other incidental expenses. While business credit cards tend to have lower limits than other financing types, they can offer perks such as cash and travel bonuses and discounts. Interest rates do tend to be higher than other financing types, however. 

Business grants offer financing that doesn’t need to be paid back. Like scholarships, grants give businesses a boost to launch or expand without worrying about debt or interest. They do tend to be competitive to get, however, and may come with restrictions like being limited to certain demographics, areas or industry types. 

SBA loans are loans that are guaranteed by the SBA, allowing business owners who may not meet the requirements for traditional loans to access affordable funding. 

The loans are issued by banks and lenders approved by the SBA and are backed by the administration with federal funding so that, if the loan defaults, the lender is able to recover the money. They also come with capped interest rates, making them more affordable than many private loans. 

On the downside, SBA loans can take longer to be approved for due to the extra requirements, making it a slower form of funding. They also have a high rejection rate compared to other types of loans. 

While specific credit and revenue requirements vary depending on the loan size and type, in general, to qualify for an SBA loan, your business must:

• Be operational.
• Operate for profit.
• Be located in the U.S.
• Be 100% owned by U.S. citizens, U.S. Nationals or Lawful Permanent Residents.
• Be small under SBA size requirements, according to industry.
• Be in an eligible industry.
• Not be eligible for private loans or lending products.
• Meet credit and repayment requirements.

There are several types of SBA loans available, depending on your needs. Working with an SBA lender can help you narrow down which loan is best for you.