Finance: Beating the Credit Crunch
Lab owner Gary Iocco tapped into one of the SBA's low-interest loans to build his new laboratory.
The SBA and You
The SBA is working hard to reach out to small businesses to provide them with the tools they need to grow. Below are some of the loan programs available to small businesses.
7(a) Loan Program
7(a) loans are the most basic and most commonly used type of loans. They are also the most flexible because financing can be guaranteed for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation, and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.
This program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate or equipment) for expansion or modernization. It is designed for small businesses requiring “brick and mortar” financing, and is delivered by CDCs (Certified Development Companies)—private, nonprofit corporations set up to contribute to the economic development of their communities.
7(m) Microloan Program
This program provides small (up to $35,000) short-term loans for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery, and/or equipment. It is designed for small businesses and not-for-profit childcare centers needing small-scale financing and technical assistance for start-up or expansion, and is delivered through specially designated intermediary lenders (non-profit organizations with experience in lending and technical assistance).
Businesses, homeowners, renters, and private, non-profit organizations that have been damaged or destroyed in a declared disaster can apply for immediate assistance in rebuilding or repairing and replacing damaged property, equipment, or inventory. Small businesses that suffer economic losses after the disaster may apply for a working capital loan up to $2 million, even if the property was not physically damaged.
For more information about any of these loan programs, visit www.sba.gov/services.