The SBA loan (small business administration loan) is a united state congress chartered of 1953 that help business obtain the finance needed to setup or grow their small business.
Qualifying for a SBA loan depends on
1. Standard of eligibility.
2. Amount of loan required.
3. Repayment terms and conditions.
4. Restriction of loan capital usage and
5. Approval process of borrower.
The main loan guaranty program of the SBA is the 7(a). The 7(a) can be used by small business to fund their start-up. It can also be used to restructure debt, to finance assets and as working capital.
Who is eligible for small business administration loan?
Eligibility for the 7a loans.
The following are the general eligibility guidelines for business that want to apply for the small business administration 7a loan.
Wholesale company with fewer than 100 employees.
Agricultural companies with sales of less than $750,000.
Retail or service company with not more than $29 million annual sales.
Manufacturing company with fewer than 500 employees but as many as 1,500 in other cases.
Construction Company with no more than $28.5 million annual sales.
Once your small business falls under any of the above eligibility criteria, you may be deemed a small business but you also have to show that you have exhausted alternative form of funding including personal assets. Your business must be a pro-profit business and must operate in the United States.
Terms and conditions for repaying the 7a small business administration loan.
The following are the repayment period of the 7a SBA loan.
Real estate purchase; loan used for the purchase of real estate has a repayment period of over twenty-five years.
Equipment purchases; SBA loan used to finance equipment purchase can be repaid over a period of fifteen years or the life span of the equipment purchased, whichever is shorter.
Working capital; if a small business uses the loan as working capital the repayment period is seven years.
Ineligibility for the 7a loans.
Before you think of applying for the SBA 7a loan, make sure your small business does not for under those business termed ineligible. These ineligible businesses include;
Small business in pornographic field.
Gambling or any other illegal activities.
Investors and lenders.
Pyramid sales company.
Schools or academics.
Non-profit corporations and charities
Have A Great Story or a Question About This Topic?
Do you have a story or a question about this? share it.
Small Business Financing
Do you need a small commercial loan for your business, if yes then you are at the right part. Why not visit us at see for your self our small commercial loans avalable to business.