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The SBA offers a variety of loans programs to satisfy different
entrepreneurial needs. Familiarity with the various programs offered by the SBA
enables entrepreneurs to better understand their financing options and,
therefore, prepare the documentation they will need to qualify for a loan. Below
is a brief description of the different loan programs offered by the SBA. If you
require more information on a specific program, click on the link:
| Loan Program |
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Description |
| 7(a) Guaranty |
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This is the SBA's primary lending program.
Private lenders provide loans to small businesses unable to
receive financing through traditional means. The loan may
be used for most business purposes including start-up, expansion,
equipment purchases, working capital, inventory, or real estate
acquisition. SBA guarantees a portion of loan amount, usually
80 percent on loans of $100,000 or less and 75 percent on
loans greater than $100,000. For more information, check out
www.sba.gov/financing/fr7aloan.html#general |
| Energy Conservation |
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This program provides financial assistance to small businesses that
design, engineer, manufacture, distribute, market, install, or service
energy saving equipment. Loan proceeds can be used for land acquisition,
plant construction, buildings, machinery, equipment, and supplies needed
to develop energy conservation devices or techniques. More information
on this program can be obtained at the SBA web site www.sba.gov |
| DELTA |
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DELTA provides financial and technical assistance to help small,
defense-dependent firms transition into the commercial market. Small
businesses are eligible for this program if they were harmed by the
closure of a Department of Defense (DoD) installation or the termination
of a DoD program on which the small business was a contractor. The loan
may be used to maintain defense workers' jobs, to create new jobs in
impacted communities, or to modernize or expand the firm in order to
retain competitiveness. The maximum loan amount is $1.25 million. More
information on this loan program is located at www.sba.gov/financing/frdelta.html |
| CAIP |
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The purpose of CAIP loans is to assist businesses negatively affected
by the North American Free Trade Agreement (NAFTA). Loan funds are to be
used to either create new, sustainable jobs or preserve existing jobs
for at-risk businesses. Applicants must prove that within 24 months, at
least one job per $70,000 of federally guaranteed funds will be saved or
created. CAIP is available in selected geographic areas. Eligibility is
determined by an analysis of NAFTA-related job losses in relation to
local unemployment rates. More information can be located at www.sba.gov/financing/frcaip.html |
| International Trade |
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This program provides short- and long-term financing to small
businesses involved in exporting or to businesses adversely affected by
import competition. The SBA will guaranty up to $1.25 million for a
combination of fixed-asset financing and working capital. Check out the
SBA Web Site www.sba.gov/financing/frinternational.html
for more information on this program's features. |
| Export Working Cap |
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This program provides short-term working capital loans to small
businesses for export-related transactions. Export sales are then used
to repay the loan. Under the Export Working Capital Program, the SBA
guarantees up to 90 percent of a secured loan or $750,000, whichever is
less. More information on this program can be obtained at www.sba.gov/financing/frexport.html |
| CAPLines |
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Under this program, the SBA guarantees up to $750,000 of a loan used
to finance short-term and cyclical working capital needs of small
businesses. If approved for a CAPLines Loan, the amount financed is
generally an advance against the business' existing or anticipated
inventory and/or accounts receivable. More information on this program
can be obtained at www.sba.gov/financing/frcaplines.html |
| CDC-504 Loans |
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The Certified Development Company (CDC) program is an economic
development loan program that assists in developing and expanding small
businesses. Funds are actually provided by a CDC and are used to finance
a portion of a small business' fixed assets at a fixed interest rate.
The portion of the project financed by a CDC cannot exceed $750,000 or
40 percent of the total project cost. A private financial institution
should finance at least 50 percent with the borrower contributing at
least 10 percent. The applicant must prove that they will create or
retain at least one job for every $35,000 borrowed. The maturity for any
504 loan is either 10 or 20 years, and is determined by the useful life
of the acquired asset. More information is available at www.sba.gov/financing/frcdc504.html |
| Microloans |
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Short-term loans up to $25,000 are available in selected locations
around the country through this program. Loan proceeds may be used for
small-scale financing such as inventory, supplies, and working capital.
Funds may not be used to pay existing debt. These loans are made through
SBA-approved nonprofit groups known as intermediaries. The maximum size
of a microloan can be $25,000. Call your local SBA office to locate the
nearest intermediary. |
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