When you’re starting a business or trying to expand an existing business, often there is a need for additional funding. The Small Business Administration has a number of programs available for small businesses to borrow money. Are you an entrepreneur in the making? If so, here’s some good information to know.

7(a) Loan Guaranty Program

For loans up to $2,000,000 – the 7(a) program includes several different types of loans and are SBA’s primary program. The loans are very flexible since they can be used for starting a business or expanding an existing business and are funded by commercial lenders. Possible uses for a 7(a) Loan might include working capital, new furniture or fixtures, renovation or improvements to business building, machinery or equipment, land and building purchase or lease, and sometimes refinancing of business debt.

Some of the loans under this program include Express Programs, Rural Lender Advantage Program, Export Loan Programs and Special Purpose Loan Programs.

Loan maturity for 7(a) loan programs is up to 10 years if used as working capital for the business or up to 25 years if used for fixed assets.


For qualified new businesses needing start up capital, or an existing business needing funds to grow, the SBA Microloan Program provides loans up to $35,000 through nonprofit lenders in the community the business is located in. Microloans are short-term, and are usually used for not-for-profit child care centers or to finance small business concerns such as inventory, training or necessary equipment expenses. The average amount of SBA microloans is around $13,000. Microloans cannot be used to pay off other business debts or to buy business real estate.

America’s Recovery Capital Loan (ARC)

Another program through the SBA offering up to $35,000 for small business owners was started as a result of the struggling economy. Because small businesses contribute to the economy, the government decided to create America’s Recovery Capital Loan program. The loans are meant to help a struggling business get back in the “green” and turn a profit. ARC loans are only available until September 30, 2010 (or until the program funding runs out).

Disaster Recovery Loan Program

If your business is located in an area declared as a “disaster area”, you could be eligible for a Disaster Recovery Loan. These programs are sometimes offered by the SBA even to people who don’t own businesses if a homeowner, renter or personal property owner experienced losses due to natural disasters.

Homeowner and Renter Disaster Loans – there are personal property loans up to $40,000 to help repair or replace damaged personal property such as clothing, cars, furniture or electronics. Homeowners may also apply for loans up to $200,000 to replace or repair the home itself.

Business Disaster Loans – up to $2 million can be used to repair or replace any real property owned by the business. There are also Economic Injury Disaster Loan programs for businesses up to $2 million to help if the business suffers economic injury, even if no physical damage has been caused.

The information presented in this material is for general information only and is not intended to provide specific advice or recommendations for any individual.

This article has been prepared from date believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as a general guide.

Creative Commons License photo credit: bisgovuk


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