Getting Approved

Many entrepreneurs need financial resources to start or expand a small business themselves and must combine what they have with other sources of financing. These sources can include family and friends, venture-capital financing, and business loans.

We'll discuss SBA’s primary business loan and equity financing programs. These are:

  • 7(a) Loan Program
  • Certified Development Company
  • 504 Loan Program
  • MicroLoan Program
  • Small Business Investment Company Program

The distinguishing features for these programs are the total dollar amount that can be borrowed, the type of lenders who can provide these loans, the uses for the loan proceeds, and the terms placed on the borrower.

The SBA does not offer grants to individual business owners to start or grow a business. The only grants the SBA is authorized to provide are for entities to provide businesses management technical assistance to other businesses.

When you seek a business loan familiarize yourself with the SBA’s business loan programs to see if they may be a viable option. The three principal players in each of these programs are — the small business, the lender and the SBA. SBA guarantees a portion of the loan. The business should have its business plan prepared before it applies for a loan. This plan should explain what resources will be needed to accomplish the desired business purpose including the cost of everything, the applicants’ contribution, use of loan proceeds, collateral, and most important, an explanation of how the business will be able to repay the loan in a timely manner.

The lender will analyze the application to see if it meets the lender’s criteria as well as SBA requirements. SBA will look to the lender to do much, if not all, of the analysis before it provides its guaranty on the lender’s loan or provides the microlenders with funds to re-lend to the business. The SBA’s business loan programs provide a key source of financing for viable small businesses that have real potential, but cannot qualify for loans from traditional sources.

What the SBA looks for:

  • Ability to repay the loan on time from the projected operating cash flow.
  • Owners and operators who are of good character.
  • Feasible business plan.
  • Management expertise and commitment necessary for success.
  • Sufficient funds, including the SBA guaranteed loan, to operate the business on a sound financial basis (for new businesses, this includes the resources to meet start-up expenses and the initial
    operating phase).
  • Adequate equity invested in the business.
  • Sufficient collateral to secure the loan or all available collateral if the loan cannot be fully secured.

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This website is provided as a public service under SBA contract # SBAHQ-11-C-0005 to provide the Small Business Resource Guides electronically. It is not an official U.S. government web site and may contain links to non-U.S. government information. SBA is not responsible for the content, accuracy, relevance, timeliness or completeness of linked information. Please use caution when considering a product or service or opinion offered by a linked web site. SBA’s participation is not an endorsement of the views, opinions, or services of the contractor or any advertiser or other participant appearing herein. All SBA programs and services are extended to the public on a nondiscriminatory basis. While every reasonable effort has been made to ensure that the information contained herein was accurate as of the date of posting, the information is subject to change without notice. Neither the contractor, the federal government, or agents thereof shall be held liable for any damages arising from the use of or reliance on the information contained in this website.