4 Business Loans You May Qualify For
The SBA offers a variety of loan programs. Familiarize yourself with the following programs to see if you qualify.
CDC/504 Loan Program:
The CDC/504 loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A Certified Development Company (CDC) is a private, nonprofit corporation which is set up to contribute to economic development within its community. CDCs work with SBA and private sector lenders to provide financing to small businesses, which accomplishes the goal of community economic development.
Proceeds from 504 loans must be used for fixed asset projects, such as:
• The purchase of land, including existing buildings
• The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
• The construction of new facilities or modernizing, renovating or converting existing facilities
• The purchase of long-term machinery and equipment
The Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit child-care centers. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries make loans to eligible borrowers. The maximum loan amount is $50,000, but the average microloan is about $13,000.
Microloans may be used for the following purposes:
• Working capital
• The purchase of inventory or supplies
• The purchase of furniture or fixtures
• The purchase of machinery or equipment.
7(a) Loan Program:
The 7(a) Loan Program includes financial help for businesses with special requirements.
• The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities
• The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
• Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
• Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
SBA provides low interest disaster loans to homeowners, renters, businesses of all sizes and private, nonprofit organizations to repair or replace real estate, personal property, machinery & equipment, inventory and business assets that have been damaged or destroyed in a declared disaster. he SBA can provide up to $2 million in disaster assistance; this includes both economic injury and physical damage assistance. Depending on your loan type, the proceeds may be used for different purposes.
To apply or learn more about available SBA Loans, visit http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans.