3 Ways SBA Programs Can Transform Your Business

Almost every small business struggles out of the gate. Building a reputation, discovering your marketing and covering overhead often feel like impossible tasks at first. For many entrepreneurs, the difference between success and struggle is as simple as qualifying for one of the SBA programs. The right SBA loan can do wonders for your company, and here are three ways these programs might help you.

1. Guarantee

As a government program, the SBA has a guarantee that other lenders can’t match. The basic 7(a) SBA loan can be used by businesses of all sorts in any number of industries, and the rates are better than what you can find through almost any other lender. Whether you’ve been in operation for a decade and need help growing your company or this is year one for your startup, a 7(a) loan is an excellent option, provided you meet the basic criteria. Bigger lenders typically don’t take chances on smaller loan amounts for unproven companies, but the federal guarantee makes this lending available to all types of businesses.

2. Development Assistance

Getting funding that’s tailored for a specific need is important, and that’s why SBA programs include 504 loans. From agricultural enterprises needing modernized equipment to digital stores looking to expand into a physical space, the 504 program can provide long-term funding with rates that actually make it cost effective to grow and update your business. This funding cannot be used for speculative investments or anything else that falls outside the umbrella of development. That said, there are plenty of business needs that do qualify companies for a 504 loan.

3. Micro Loans

If you’ve already been turned away by a bank because your loan request is below the minimum, the SBA has a solution. The SBA 7(m) program funds loans up to $35,000, which is far less than what most traditional lenders will consider. The capital from a 7(m) can be used for a variety of purposes, including cash flow, inventory, renovations and supplies. This financing is not available for debt consolidation or real estate, but the 7(m) program is the one option for non-profits, as not-for-profit childcare companies are eligible for this type of funding.

It’s hard to start a business, and sometimes it’s just as hard to secure financing. The SBA programs provide the perfect solution for many entrepreneurs running small companies, so make sure to explore these options before accepting a loan with questionable terms.


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