Small Business Loans From the Government
There are several options for small business loans from the government. There are microloans and SBA 7(a) loans, as well as SBA contracts. The best loan option for your business depends on your needs. The SBA also consults with the Department of Treasury to determine how much you can borrow.
SBA 7(a) loan
SBA 7(a) loans are available to small businesses looking for funding to meet a variety of expenses. They can be used for revolving funds, equipment financing, construction financing, or renovations of existing buildings. The SBA sets a cap on the interest rates that can be charged under this program.
The SBA 7(a) loan application process typically takes 60 to 90 days to process. It may take additional time to process if the loan requires additional authorization requirements or collateral appraisals. When approved, the lender will begin the closing process. The borrower will then repay the loan through regular monthly payments. The processing time for a SBA 7(a) loan varies depending on the type of business, but it is generally around sixty to ninety days.
SBA loans are issued by certified lending partners, which are generally banks or credit unions. These lenders are required to guarantee a percentage of the loan amount to make sure the lender will get back the money. The SBA loan guarantee is usually 50% to ninety percent, depending on the size of the loan and the borrower’s qualifications.
The SBA Microloan Program is a federal program that provides low-interest loans to small businesses. The SBA has reported that 80 percent of its loans went to minority and women-owned businesses. Many of these loans are made by nonprofit lenders. About 73 percent are also designated as “Community Development Financial Institutions” by the Department of Treasury. Those lenders must report their activity to …