Small Business Loans | Unsecured Credit

Dedicated Business Loan Specialists

In general, all SBA programs are targeted at small companies (that is, businesses with less than $7 million in tangible net worth and less than $2.5 million in net income). Typically most banks won't lend to startup businesses that don't have two to three years' worth of financial statements and some owner's equity in the business. Some banks will allow you to use money from relatives as part of your equity, but you're required to formalize these family loans with a repayment plan that's subordinate to the bank debt. In other words, the bank gets paid back before your relatives do. Sorry dad!

504 Loan Program

The 504 loan program is intended to supply funds for asset purchases, such as land or equipment. Typically, the asset purchase is funded by a loan from a bank or other lender in your area, along with a second loan from a certified development company (CDC) that's funded with an SBA guarantee for up to 40 percent of the value of the asset--which is generally a loan of up to $1 million--and a contribution of 10 percent from the equity of the borrower. This financing structure helps the primary lender (i.e., the bank) reduce its exposure by relying on the CDC and the SBA to shoulder much of the risk.

Eligibility: Like the 7(a) program, the 504 program is restricted to small businesses with less than $7 million in tangible net worth and less than $2.5 million in net income. However, since funds from 504 loans can't be used for working capital or inventory, consolidating or repaying debt, or refinancing, this program tends to exclude most service businesses that need to purchase land or equipment. Personal guarantees are also required for 504 loans.

7(m) Microloan Program

The Microloan program is presently under budgetary review, and the political winds aren't currently blowing in its favor. The program is intended to provide "small" loans of up to $35,000 that can be used for a broad range of purposes to start and grow a business. Unlike the 7(a) program, the funds to be loaned don't come from banks; rather, they come directly from the SBA (now you know why it's unpopular with the folks in charge of the budget) and are administered to business owners via nonprofit community-based intermediaries.

Eligibility: The Microloan program is startup friendly. All new businesses are eligible to apply. Although the maximum loan amount is $35,000, the average loan is approximately $10,000. The only catch is that Microloan borrowers typically have to enroll in technical assistance classes administered by the micro-lender intermediaries. For some entrepreneurs, this is a very helpful resource that provides cost-effective business training. Others, however, perceive it as a waste of time, although it's a necessary pre-condition to getting a Microloan.

There are two other special purpose SBA loan programs targeted at serving particular types of businesses:

The Export Working Capital Program provides short-term working capital to small export businesses.

The DELTA Program provides both financial and technical assistance to help businesses dependent on defense installations transition to civilian markets.

The long and short of it is, if you need small-business loan capital, there's probably an SBA program out there for you.

But realize you are dealing with a government agency. Restrictions, rules and delays are not uncommon. BCG is able to bypass the confusions by bringing clarity and certainty to the SBA loan process.

Why spend months or even years trying to navigate the treacherous government red-tape waters, when the SBA professionals like BCG can cut through the fog and take the ship to dock and unload the money.

Need an SBA loan? Then start working with BCG today!

Click here to find out more or call 800-836-6959 right away!