What is a sba loan?

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8th Nov 2009 by Amelia Timbers

An SBA loan stands for Small Business Association Loan. The Small Business Association is a federal agency tasked with helped to develop successful small businesses. The SBA offers an extensive loan program that offers a variety of loans. Guaranteed Loans guarantee to lenders that the loans will be repaid; if the borrower defaults, the SBA aborbs the losses. SBA guaranteed loans are generally only available to entrepreneurs whose access to financing from other sources is cut off. The SBA offers 7(a) loans, CDC/504 loans, microloans and disaster loans. Each of these types of loans have target borrowers and requirements. Within the 7(a) program, there are four flavors: Express Loans, Export Loans, Rural Lender Advantage loans and Special Purpose Loans. 7(a) loans exist to fund small businesses generally; CDC loans are loans for small business (less than $7.5 net worth and $2.5 net income) for fixed asset projects. Microloans are small ($35k and less) short term loans used for working capital purposes only. Disaster loans are commercial and personal loans offered to disaster survivors to replace business or real estate property lost in disaster. They SBA also offers bond and equity financing.

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