SBA loans can be used for many reasons, such as starting your business, managing expenses (think inventory and payroll), expanding your operations, or increasing your safety net.
The 7(a) loan program continues to be the SBA's primary way of providing financial assistance to small businesses, but there are other types of SBA loans, each with its own terms and conditions.
SBA Loan Types
- 7(a) loan program (SBA’s flagship loan program) can fund up to 5 million dollars from banks, credit unions, and specialized lenders. The purpose is to fund working capital, expansion, and equipment purchases.
- 504 loan program funds up to 5.5 million dollars usually from a combination of traditional lenders like banks and Certified Development Companies or CDC's.
- Microloans fund businesses up to 50 thousand and are provided by community-based nonprofits to fund working capital, inventory, supplies, equipment,and machinery.
