What type of business can really benefit from the flexibility and structure of SBA loans?
Typically, start-ups are ideal candidates for SBA loans, as are existing businesses that need longer-term loans to purchase a piece of equipment or real estate. The longer you amortize the mortgage, the lower your payments. With SBA loans’ longer amortization periods, business owners won’t sacrifice cash flow as they acquire capital to grow. There are specific parameters that dictate what type of businesses qualify for SBA loans. The Small Business Act states what constitutes a small business, and the definition varies depending on the industry. The SBA outlines size standards online at www.sba.gov. A bank will also help a business determine eligibility for SBA loans. What types of SBA loans are available? There are three main programs: the 7(a) program with a maximum loan of $2 million; the SBA Express program, an off-shoot of the 7(a) for lines of credit and smaller loans less than $350,000; and the 504 program, which is geared toward businesses that want to expand through capital im
