SBA loan types.

The Small Business Administration (SBA) offers various loan programs designed to help small businesses access affordable financing. The main types of SBA loans include:

1. SBA 7(a) Loan Program

• Purpose: The most popular SBA loan, offering general-purpose funding. Used for working capital, refinancing debt, purchasing equipment, or acquiring real estate.

• Loan Amounts: Up to $5 million.

• Terms:

  • Working capital: up to 10 years.

  • Real estate: up to 25 years.

• Interest Rates: Typically variable, based on the prime rate plus a margin.

2. SBA 504 Loan Program

• Purpose: Primarily for purchasing fixed assets like real estate, buildings, or heavy equipment.

• Loan Structure: Usually involves two loans — one from a bank (50%) and one from a Certified Development Company (CDC) (40%) — with the borrower providing 10% as a down payment.

• Loan Amounts: Up to $5.5 million for CDC loans.

• Terms: Up to 25 years for real estate and 10 years for equipment.

• Interest Rates: Fixed or variable, typically lower than 7(a) loans.

3. SBA Microloan Program

• Purpose: For startups or small businesses needing smaller loans, often used for working capital, inventory, supplies, or equipment.

• Loan Amounts: Up to $50,000 (average loan is about $13,000).

• Terms: Up to 6 years.

• Interest Rates: Typically between 6% and 13%.

4. SBA Express Loans

• Purpose: A faster, streamlined version of the SBA 7(a) loan program, used for working capital, equipment purchases, or real estate.

• Loan Amounts: Up to $500,000.

• Approval Time: Faster processing, typically within 36 hours.

• Interest Rates: Slightly higher than traditional 7(a) loans, often variable.

5. SBA Export Loans

• Types:

  • Export Express Loan: Up to $500,000, for businesses involved in exporting goods or services.

  • Export Working Capital Program (EWCP): Up to $5 million, providing working capital for export activities.

  • International Trade Loan: Up to $5 million, for businesses expanding into international markets or adversely affected by import competition.

• Purpose: To provide financing for businesses involved in international trade, such as expanding export operations, purchasing inventory, or upgrading facilities.

6. SBA Disaster Loans

• Purpose: For businesses affected by natural disasters (hurricanes, floods, etc.), providing funding for repair and recovery.

• Loan Amounts: Up to $2 million for physical and economic damage.

• Interest Rates: Low fixed rates, often under 4%.

• Terms: Up to 30 years, depending on the borrower's ability to repay.

7. SBA CAPLines Program

• Purpose: Designed to meet businesses’ short-term and cyclical working capital needs.

• Types of CAPLines:

  • Working Capital Line of Credit: For general working capital needs.

  • Contract Loan Program: For businesses performing contracts or subcontracts.

  • Seasonal Line of Credit: To support seasonal increases in accounts receivable and inventory.

  • Builders Line of Credit: For construction or renovation projects.

• Loan Amounts: Up to $5 million.

• Terms: Up to 10 years, with a revolving or non-revolving structure.

8. SBA Community Advantage Loans

• Purpose: Specifically for small businesses in underserved communities. The program encourages local, mission-focused lenders like non-profits to make SBA 7(a) loans.

• Loan Amounts: Up to $350,000.

• Terms: Same as SBA 7(a) loans.

• Interest Rates: Market-based, but potentially higher than traditional 7(a) loans due to the focus on underserved markets.

Each of these SBA loan types is tailored to different needs, making it easier for small businesses to find financing solutions that fit their specific goals.