Video:What Are SBA Loans?

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Transcript:What Are SBA Loans?

All SBA loan programs lend to small businesses unable to secure financing on reasonable terms through normal lending channels. The loan programs are operated through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA, which by itself has no funds for direct lending or grants. Most private lenders like banks are familiar with SBA loan programs so applicants should contact their local lender for information and assistance.

Program for SBA Loans

The primary loan programs through funding from the U.S. Small Business Association (SBA) are as follows:

One of the SBA's primary loan programs, 7(a) Guaranty Program offers loans of up to $2,000,000. The maximum dollar amount the SBA can guaranty is generally $1 million. Certified Development Company (CDC), a 504 Loan Program ((GFX)) The Certified Development Company (CDC), a 504 Loan Program provides long-term, fixed-rate financing to small businesses to acquire real estate, machinery, equipment for expansion or modernization.

Microloan SBA

The Microloan program offers loans of up to $35,000 to qualified start-up, newly established, or growing small business concerns. Loans are arranged through nonprofit community based lenders or intermediaries, and is handled on the local level.

If you are in a declared disaster area and are the victim of a disaster, you may be eligible for financial assistance - even if you don't own a business. As a homeowner, renter and/or personal-property owner, you may apply for a Disaster Recovery Loan to help you recover from a disaster.

SBA's America's Recovery Capital Loan Program

SBA's America's Recovery Capital Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship to help ride out the current uncertain economic times and return to profitability. Each small business is limited to one ARC loan.

Unfortunately, the SBA has not been granted funds to offer special loan programs to assist either veterans or disabled persons. However, individuals of both groups are eligible for all SBA loan guaranty programs. In addition, veterans are eligible for special consideration under SBA's guaranty loan programs.

For complete information on SBA loans, visit the SBA website.

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