There’s a world of options out there for business owners to take advantage of to obtain financing for their business. One option that comes up fairly often, particularly among entrepreneurs and startups without much credit history, is SBA loans. Within the overall category of “business loans,” these loans are specifically overseen and administered by the Small Business Administration (SBA).

First and foremost, the SBA does not actually lend money. Rather, they work with banks and lending institutions by guaranteeing part of your loan repayment should you default. The SBA can assist you in preparing your loan package for submitting to the financial institution. After approval from the bank, your loan goes back to the SBA for review. Depending on the lender’s relationship with the SBA (regular, certified, or preferred), your loan will be reviewed for approval in anywhere from 2 weeks to less than 3 days.

SBA loans include several different types. Here is a brief overview of them:

  • 7(a) Loan Program. This is the most often used SBA loan. It offers flexible use options, and repayment times can be as long as 10 or 25 years, depending on the purpose of the loan.
  • Express Program. This program is under the 7(a) program, but is specifically designed to quickly process smaller loan amounts.
  • CDC/504 Loan Program. Also administered through nonprofit intermediaries, these loans are for much bigger amounts, typically used for real estate and equipment. They are long-term and fixed-rate.
  • Micro Loan Program. Created for very small loan amounts, less than $35,000, these are administered through nonprofit intermediaries.
  • CAP Lines. Essentially, this program provides short term or seasonal credit to businesses in the form of loans or lines of credit.

The SBA offers more variations within each of these programs, particularly the 7(a) program. SBA loans can provide wonderful financing alternatives for businesses having trouble obtaining a loan the traditional way. More information about these loans, including how to start the process of getting one, can be found on the SBA’s website.