SBA Small Business Loan Programs & Your Small Business Loans
To understand how the SBA can help you, a short history lesson may establish whether the Small Business Administration (SBA) is the correct organization that can help your Small Business Succeed. Then we can move on and go into details about the current offerings of the Small Business Administration has today and how they may be able to help you get small business loans!
Who Created the SBA:
In 1953 Congress, under the Presidency of Dwight Eisenhower, created what is now known as the Small Business Administration, but its history dates all the way back to 1932.
Why was The SBA Created?
The SBA would ensure small business a “fair proportion” of government Contract and sales of surplus Property. They also were starting to make loans to victims of natural disasters and helping small businesses to get government contracts by working with them and offering technical and managerial experience.
Was the SBA an Idea that one day was grown out of thin air?
The SBA grew out of it predecessor called the Reconstruction Finance Corporation created by President Herbert Hoover in 1932, which charter was to assist both large and small businesses that were hurt by the great depression. When World d War II hit, the government had the larger companies beef up their production capability, leaving the small businesses without the necessary means to compete. Thus the Small War Plants Corporation was enacted in 1942 to try and level the playing field for small businesses that were losing market share to the big industrial companies.
Finally, the SBA expanded to what it is today:
By 1954 the Small Business Administration was making direct business loans and guaranteeing small business loans from banks to of set the risk and help to spur growth to small business. To this day he SBA still does those thing and more. As the year went by, the SBA was given a budget each year and used it to better itself. NO you can get mentoring from the SBA, and they help veterans and minorities as well as women owned businesses get financing. That’s not to say that they have stopped guaranteeing small business bank loans, but it is to say that they have added these services in addition to guaranteeing small business loans.
What types of Small Business Loans does the SBA offer? We’ll at this point it seems that the SBA doesn’t directly loan the money anymore, but rather guarantees bank loans that you can apply for directly from the lender and they exist for a variety of reasons and purposes.
As you know Accommodative Financial Solutions is a Reasearch and Loan Consulting Company. We do not directly or inderectly loan money ourselves, but we know where you can find it and given your unique credit profile and circumstances, Our Expert Small Business Loan Consultants can help you get approved for Unsecured Small Business Loans - not to be confused with the SBA loans. For those we can refer you to the closest preferred SBA lender nearest you. To See if your pre-qualify APPLY NOW !
To The best of our knowledge and our research, the programs and loans consist of the following:
*This may not be a complete list. For a complete list and much more information visit SBA.gov.
1) SBA Loans for Veterans – Patriot Loan Express Initiative & Military Reservist Economic Injury Disaster Loan Program.
2) Small Manufacturer Loans - the 504 program. The maximum debenture for "Small Manufacturers" is $4.0 million. A Small Manufacturer is defined as a small business concern that has: Its primary business classified in sector 31, 32, or 33 of the North American Industrial Classification System (NAICS); and All of its production facilities located in the United States.
In order to qualify for a $4 million 504 loan, the Small Manufacturer must 1) meet the definition of a Small Manufacturer as described on the SBA site, and 2) either (i) create or retain at least 1 job per $100,000 guaranteed by the SBA [Section 501(d)(1) of the Small Business Investment Act (SBI Act)], or (ii) improve the economy of the locality or achieve one or more public policy goals [sections 501(d)(2) or (3) of the SBI Act].
3) The SBA 7(a) loans are the most basic and most used type loan of SBA's business loan programs. Its name comes from section 7(a) of the Small Business Act, which authorizes the Agency to provide small business loans to American small businesses:
7(a) loans are only available on a guaranty basis. This means they are provided by lenders who choose to structure their own loans by SBA's requirements and who apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans. The lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is a guaranty against payment default. It does not cover imprudent decisions by the lender or misrepresentation by the borrower.
An Important fact to understand is that under the guaranty concept, commercial lenders make and administer the loans. What this means to you is that:
The business applies to a lender for their financing. The lender decides if they will make the loan internally or if the application has some weaknesses which, in their opinion, will require an SBA guaranty if the loan is to be made. The guaranty which SBA provides is only available to the lender. It assures the lender that in the event the borrower does not repay their obligation and a payment default occurs, the Government will reimburse the lender for its loss, up to the percentage of SBA's guaranty. Under this program, the borrower remains obligated for the full amount due.
Thus even though the SBA is backing the bank against default, you or your business is ultimately responsible to repay your debt.
4) Then there is the CDC/504 Loan Program. CDC stands for Certified Development Company which usually helps to foster economic growth for its community where it is located. For a list of CDC’s in your area, visit the SBA website.
5) A very popular program is the Microloan, a 7(m) Loan Program. Its primary function is to provide short-term loans of up to $35,000 to small businesses and not-for-profit child-care centers for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. Proceeds cannot be used to pay existing debts or to purchase real estate. The SBA makes or guarantees a loan to an intermediary, who in turn, makes the microloan to the applicant. These organizations also provide management and technical assistance. The loans are not guaranteed by the SBA. The microloan program is available in selected locations in most states. Again to see if this program is available in your state visit SBA.gov and find out!
6) Because of the trade deficit it behooves our country to increase our exports and therefore the SBA has an export program as well. The SBA Export Express program provides exporters and lenders a streamlined method to obtain SBA backed financing for loans and lines of credit up to $250,000. Lenders use their own credit decision process and loan documentation; exporters get access to their funds faster. The SBA provides an expedited eligibility review and provides a response in less than 24 hours.
7) Because NAFTA has damaged some industries here in the US, the SBA has come up with it’s own program to help. It’s appropriately named the U.S. Community Adjustment And Investment Program or to use a government acronym (CAIP) for short. CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by NAFTA. Funds administered by Treasury (see below) allow for the payment of fees on eligible loans. These fees include the 7(a) program guarantee fee (and subsidy) and the 504 program guarantee, CDC and lender fees. Depending on the loan size, the fees can be sizeable.
The CAIP works with the SBA in both their 7(a) Loan Guarantee Program and 504 Program to reduce borrower costs and increase the availability of these proven business assistance programs. CAIP can be used with both the 7(a) and 504 Loan Programs
8) Employee Trusts - The objective of this program is to provide financial assistance to Employee Stock Ownership Plans. The employee trust must be part of a plan sponsored by the employer company and qualified under regulations set by either the Internal Revenue Service Code (as an Employee Stock Ownership Plan or ESOP) or the Department of Labor (the Employee Retirement Income Security Act or ERISA). Applicants covered by the ERISA regulations must also secure an exemption from the Department of Labor regulations prohibiting certain loan transactions.
SBA Loans
The U.S. Small Business Administration (SBA) assists small business owners to start and expand their businesses by helping them get loans through private banks and financial institutions. SBA is the largest single financial backer for the nation's small businesses with a portfolio of business loans, loan guarantees and disaster loans worth more than $45 billion, in addition to a venture capital portfolio of $13 billion.
SBA offers a number of low-interest loan programs for new and expanding small businesses. SBA is not a lender, and does not grant loans directly to businesses. Rather, SBA is a guarantor of loans made by privately owned banks and other financial institutions that agree to follow SBA's guidelines.
To apply for an SBA loan, you need to visit your local participating bank or lending institution. When you apply for an SBA loan you are actually applying for a commercial loan, structured according to SBA requirements, which receives an SBA guaranty. This guaranty is portion of the loan the SBA will pay back to the lender should you default on your loan payments.
Visit The Small Business Administration Website SBA.gov for much more comprhensive information as this is only intended to be a one page brief synopsis and there is so much more information to be garnished on their site.
This is just one more reason that Accommodative Financial Solutions is Ranked as America's #1 Unsecured SMALL BUSINESS LOANS Research and START-UP BUSINESSS LOANS Consulting Company!