SBA Loans: An Option For Small Business Owners

Copyright (c) 2010 Irish Taylor

Why are business owners, as well as entrepreneurs, in constant search for small and start up business loans? Well, the answer is quite simple. They need these credit accounts to fund the immediate needs of their respective stores, shops, offices, and commercial establishments.

However, many business owners prefer seeking financial assistance from banks and lending firms and organizations. They do not take advantage of the loans and credit lines offered by the US Small Business Administration agency, otherwise known as the SBA. This may be because not all entrepreneurs are knowledgeable and well-aware of the credit deals that they can take from the SBA. So, they feel somewhat apprehensive to apply for these credit accounts.

Still, if you want to know more about the start-up and small business loans offered by the SBA, we encourage you to read this article. It is because we will be providing a brief discussion on five of the most common credit accounts provided by the SBA.

Credit Accounts Available to Small Business Owners and Entrepreneurs

1. 7(a) Loan Guaranty Program - This primary loan program offered by the US Small Business Administration agency offers small business loans of up to $2,000,000 to entrepreneurs and small-scale business owners.

2. Certified Development Company (CDC), a 504 Loan Program - Business owners will surely consider this type of credit program since it offers great features especially made for small and start up businesses. This credit account provides long-term and fixed rate financing to small shops, stores and other commercial establishments. Through a CDC program, an entrepreneur can have sufficient funds to purchase real estate properties, much-needed machinery and equipment as well as other supplies needed for business expansion purposes.

A 504 project often includes a small business loan secured from a private lender with a senior lien, a loan secured from CDC with a junior lien that covers as much as 40% of the total cost and of course, a contribution of at least 10% equity from the business owner.

3. Micro loan Programs - A micro loan program actually offers start-up business loans of about $35,000 to struggling entrepreneurs to help them finance their qualified start-up, or newly-established business concerns. These programs are arranged through community-based credit unions or firms which in turn distribute financing deals to qualified borrowers.

4. America's Recovery Capital Loan Program (ARC) - The ARC program of the US Small Business Administration usually provides as much as $35,000 in short-term relief for small and medium scale businesses which encountered financial difficulties especially during the most recent economic recession. ARC loans are intended to help businesses regain their profitability to ensure their longevity in the market. Still, this credit program will only be offered as long as funding is available or until September 30, 2010, whichever of these two comes first.

5. Disaster Recovery Loans - If your business is located in a declared disaster area, you can surely qualify for a disaster recovery loan from the US SBA. Through this loan your business will have sufficient funds to support the important steps and projects your business must undertake to regain its profitability.

You may want to consider applying for any of these available credit accounts from the US Small Business Administration. It can definitely help you get enough funds for your business operations and needs.