AllBusiness.com
    • Starting a Business
    • Career
    • Sales & Marketing
    • AI
    • Finance & Fundraising
    • M & A
    • Tech
    • Business Resources
    • Business Directory
    1. Home»
    2. Getting Started»
    3. 3 Types of SBA Home-Based Business Loans»
    A home-based business owner looking for an SBA loan

    3 Types of SBA Home-Based Business Loans

    AllBusiness Editors
    Home-Based BusinessFinancing & CreditOperations

    Obtaining financing for a new venture is never easy, and finding funding for a home-based sole proprietorship business is even harder. But the Small Business Administration (SBA) has made it much easier for home-based businesses to find the financing they need.

    If your bank has turned down your business loan application, don't despair. You may be able to find funding for your home-based business through the SBA's numerous funding options.

    SBA Loan Options for Home-Based Businesses

    The SBA offers three distinct types of financing for small businesses. Study them carefully to make sure that you are applying for the loan that is best suited to your business.

    1. Microloans

    Microloans are the most popular loan for home-based businesses. You can apply for up to $50,000 for your business needs.

    You can use this money in a variety of different ways, such as purchasing needed inventory to run your business, buying necessary supplies or furniture, getting the computer equipment that you need, or for working capital. However, you will not be able to use this loan to pay off any existing debts or to purchase land or real estate for your home-based business.

    With the microloan program, you don't borrow money directly from the SBA; rather, the SBA guarantees your loan with a lender who provides the loan to you.

    2. 7(a) Loans

    The SBA's 7(a) loan is perfect for businesses that require more options for their loans and are having trouble getting funding through traditional lenders. This program offers more flexibility and, unlike microloans, a 7(a) loan can be used to pay off your debts and acquire property for your business. You can also use your 7(a) loan for working capital or to purchase supplies, equipment, and furniture.

    3. Certified Development Company 504 loans

    Certified Development Company (CDC) 504 loans are primarily for larger businesses that require a great deal of money to purchase real estate or expensive equipment. These loans can go as high as $5 million, and are generally out of the reach of most home-based business. However, if you need to purchase high-priced equipment for your business, you may be able to use this type of loan.

    CDC 504 loans are more complicated than microloans and 7(a) loans. The business owner typically provides 10% of the equity for the purchase, another lender covers 50%, and the 504 loan will cover the remaining 40%.

    Get the Money You Need Through an SBA Loan

    While it can be difficult to get a loan for a home-based business, the SBA may be able to help. With these three programs, the owner of even the smallest small business can get the money he or she needs to become successful.

    RELATED: The Founder’s Guide to Startup Fundraising

    Hot Stories

    Using ChatGPT to answer business questions

    5 Ways to Get Better Answers From ChatGPT About Business

    Two business leaders negotiating at a meeting

    9 Leaders Share Their Top Business Negotiation Strategies

    BizBuySell
    logo
    AllBusiness.com is a premier business website dedicated to providing entrepreneurs, business owners, and business professionals with articles, insights, actionable advice,
    and cutting-edge guides and resources. Covering a wide range of topics, from starting a business, fundraising, sales and marketing, and leadership, to emerging AI
    technologies and industry trends, AllBusiness.com empowers professionals with the knowledge they need to succeed.
    About UsContact UsExpert AuthorsGuest PostEmail NewsletterAdvertiseCookiesIntellectual PropertyTerms of UsePrivacy Policy
    Copyright © AliBusiness.com All Rights Reserved.
    logo
    • Experts
      • Latest Expert Articles
      • Expert Bios
      • Become an Expert
      • Become a Contributor
    • Starting a Business
      • Home-Based Business
      • Online Business
      • Franchising
      • Buying a Business
      • Selling a Business
      • Starting a Business
    • AI
    • Sales & Marketing
      • Advertising, Marketing & PR
      • Customer Service
      • E-Commerce
      • Pricing and Merchandising
      • Sales
      • Content Marketing
      • Search Engine Marketing
      • Search Engine Optimization
      • Social Media
    • Finance & Fundraising
      • Angel and Venture Funding
      • Accounting and Budgeting
      • Business Planning
      • Financing & Credit
      • Insurance & Risk Management
      • Legal
      • Taxes
      • Personal Finance
    • Technology
      • Apps
      • Cloud Computing
      • Hardware
      • Internet
      • Mobile
      • Security
      • Software
      • SOHO & Home Businesses
      • Office Technology
    • Career
      • Company Culture
      • Compensation & Benefits
      • Employee Evaluations
      • Health & Safety
      • Hiring & Firing
      • Women in Business
      • Outsourcing
      • Your Career
      • Operations
      • Mergers and Acquisitions
    • Operations
    • Mergers & Acquisitions
    • Business Resources
      • AI Dictionary
      • Forms and Agreements
      • Guides
      • Company Profiles
        • Business Directory
        • Create a Profile
        • Sample Profile
      • Business Terms Dictionary
      • Personal Finance Dictionary
      • Slideshows
      • Entrepreneur Profiles
      • Product Reviews
      • Video
    • About Us
      • Create Company Profile
      • Advertise
      • Email Newsletter
      • Contact Us
      • About Us
      • Terms of Use
      • Contribute Content
      • Intellectual Property
      • Privacy
      • Cookies