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Tuesday, Oct 29th

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SBA Loans for Small business

SBA Loan

The Small Business Administration (SBA), United States was established on 30 July, 1953 when the Small Business Act was passed by Congress. The main aim of the SBA is to provide funds to small businesses to ensure their survival as well as their growth. The SBA helps businesses by not only providing the funds themselves but it also guarantees the loans provided by other banks and lending institutions to small businesses.

There are different programs which SBA provides. One of them is 7(a) Loan program which is designed to aid start-up and existing small business. This consists of types such as –

Express programs- SBA’s express programs offer quick streamlined loan procedures for some group of borrowers and gives an accelerated turnaround time. The response time in this case is just 36 hours after filing an application.

Export loan programs- SBA has ensured that it helps the small business exporters. This loan ensures the global opportunities and makes sure that the business grows in international market.

Rural lender advantage- this initiative provides loan needs of small communities and simplifies the processing as well as provides an accelerated funding process. This program is mainly focused towards economic development of rural areas and to decrease the unemployment rate there.

Special purpose loans- this scheme has been designed to help the businesses that have been negatively affected by NAFTA. It also provides financial assistance to help implement pollution control mechanisms.

Another type of SBA loan is the SBA 504 loans, which help businesses to buy the real estate that they are located in. this loan allows one to snap a deal with as low as 10% down! Other advantages of SBA 504 loans are- they are for longer term, low closing costs, quick closing process and no balloon payments.

Microlan program- This program provides around $35,000 loans for the purchase of inventory, furniture, machinery, equipments etc. The maximum term allowed for microlan is 6 years and the rates are around 8 and 13 percent.

Disaster Assistance Loan Program- This loan is provided to homeowners, renters and businesses of all sizes and private non-profit organizations to repair or replace their real estate, machinery, inventory and business assets that have been damaged in a natural disaster.

Last year the Federal government granted around $375 million to the above programs