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The SBA is both the guarantor and lender to small businesses. This doesn't mean a loan is easier to obtain through the SBA than anywhere else.
The SBA provides financing to either build your existing business, or to start a new business. The funds provided by the SBA cannot be used to pay off creditors, buy out investors, or to invest in real estate.
The SBA has many restrictions regarding their loans, which is understandable since they are also backing the loans. Qualifications for an SBA loan are subject to change, but the general guidelines are as follows:
*Business must be "for-profit".
*Business cannot be dominant in its field.
*Business must be independently owned and operated.
*Business must meet size limits set by the SBA.
As with any other lending institution, you need an adequate business plan before approaching the SBA.
The SBA provides more than financing for small business, they are also an invaluable source of help and information. For more information, see our section on The Small Business Administration, or visit their web site.
You can obtain a list of authorized SBA lenders in your area by calling 1-800-827-5722.
