The U.S. Small Business Association offers numerous loan programs to assist small businesses. To be considered for a loan guaranteed by the SBA, you must meet these basic requirements:
- You must have been turned down for a loan by a bank or other lender to qualify for most SBA business loan programs.
- You will be required to submit a guaranty, both personal and business, to qualify for the loan.
- Your business must operate for profit; be engaged in or propose to do business in the United States or its possessions; have reasonable owner equity to invest; and use alternative financial resources first, including personal assets.
- All businesses must meet eligibility criteria to be considered for financing under the SBA’s 7(a) Loan Program in the following categories: size; type of business; operating locations; use of available of funds from other sources; use of proceeds; and repayment.
- The repayment term of an SBA loan is between five and 25 years, depending on the assets being financed and the cash needs of the business.
- Working capital loans (accounts receivable and inventory) should be repaid in five to 10 years. The SBA also has short-term loan guarantee programs with shorter repayment terms.